California, August 26, 2025
News Summary
The California Air Resources Board (CARB) is set to propose new climate disclosure regulations on October 14, 2023, aimed at improving corporate accountability for climate change. Following Governor Gavin Newsom’s endorsement of laws requiring companies above certain revenue thresholds to report their emissions and climate-related risks, these regulations are part of California’s broader efforts towards environmental transparency. Despite earlier plans to finalize the regulations by July 2023, the timeline has been extended to December 2023 for board consideration, allowing for stakeholder input.
California – The California Air Resources Board (CARB) will propose new climate disclosure regulations on October 14, 2023, following the passage of two significant laws aimed at promoting corporate accountability regarding climate change. The regulations, aimed at increasing transparency surrounding corporate emissions and climate-related financial risks, are part of an ongoing effort to hold large companies responsible for their environmental impacts.
In 2023, California Governor Gavin Newsom endorsed the Climate Corporate Data Accountability Act (SB 253) and the Climate-Related Financial Risk Act (SB 261), both of which lay the groundwork for the upcoming climate disclosure requirements. SB 253 mandates that companies generating over $1 billion in revenue report their Scope 1 (direct emissions) and Scope 2 (indirect emissions from purchased energy) emissions, with future plans for reporting Scope 3 (indirect emissions in the value chain) emissions as well. Meanwhile, SB 261 requires firms earning at least $500 million to prepare biennial climate-related risk reports.
Although CARB initially aimed to finalize these regulations by July 1, 2023, the timeline has now pushed back, with board consideration scheduled for December 11-12, 2023. This delay follows a 45-day comment period that invites input from relevant stakeholders. CARB estimates that approximately 4,160 firms will need to comply with SB 261’s climate-related risk reporting, while 2,596 companies will fall under SB 253’s emission reporting requirements.
To implement these laws, CARB expects a one-time cost of $20.7 million, which will be temporarily financed through the Inflation Reduction Act’s Greenhouse Gas Reduction Fund, alongside an ongoing operational cost of $13.9 million. Furthermore, CARB anticipates that companies subject to SB 253 will incur annual fees of about $3,106, while those under SB 261 are expected to pay around $1,403. Companies with revenues exceeding $1 billion will be liable for both fees.
Certain entities, such as non-profits, government organizations, and businesses operating exclusively in teleworking or specific wholesale electricity sectors, are exempt from these regulations. Initially, a compliance enforcement notice specifies that CARB will not impose penalties for incomplete data during the first year, provided companies exert a good faith effort to gather relevant emissions data.
Since the first public workshop held by CARB in May, KPMG sustainability leaders have emphasized that the original 2026 reporting deadlines remain intact, despite various legal challenges against these regulations. Recently, a federal judge denied a request for a preliminary injunction to stop the enforcement of the laws, marking a significant legal approval for the measures aimed at climate accountability.
Currently, CARB is collecting stakeholder feedback through public workshops until September 11, 2023, and has released a FAQ document to clarify compliance measures and expectations. With potential political shifts looming in 2025 altering the landscape surrounding ESG (Environmental, Social, and Governance) investments, the upcoming regulations may play a pivotal role in shaping corporate environmental strategies moving forward.
Frequently Asked Questions
What are the new climate disclosure regulations in California?
The new regulations require companies with over $1 billion in revenue to report direct and indirect emissions, and those with at least $500 million to submit biennial climate-related risk reports.
When will the proposed regulations be considered?
The CARB plans to present the proposed regulations to the board on December 11-12, 2023, following a 45-day comment period.
Which companies will be affected by these regulations?
Approximately 4,160 firms are estimated to be impacted by climate-related risk reporting, while 2,596 will need to comply with emissions reporting requirements.
What costs are associated with implementing these regulations?
The total one-time implementation cost is expected to be $20.7 million with ongoing costs of approximately $13.9 million, and annual fees ranging from $1,403 to $3,106 for companies affected.
Are there any exemptions to these regulations?
Yes, non-profits, government entities, telework-only businesses, and certain wholesale electricity businesses are excluded from the laws’ scope.
Will there be penalties for incomplete data in the first year?
CARB has stated that it will not impose penalties for incomplete data in the first year as long as companies demonstrate a good faith effort in gathering emissions data.
Summary of Key Features
| Feature | Details |
|---|---|
| Proposed Rulemaking Date | October 14, 2023 |
| Key Laws Passed | SB 253 (Emissions), SB 261 (Risk Reports) |
| Date for Board Consideration | December 11-12, 2023 |
| Estimated Firms Affected by SB 253 | 2,596 |
| Estimated Firms Affected by SB 261 | 4,160 |
| One-Time Implementation Cost | $20.7 million |
| Ongoing Annual Cost | $13.9 million |
| Annual Fees for SB 253 | $3,106 |
| Annual Fees for SB 261 | $1,403 |
| Exemptions | Non-profits, Government Entities, Teleworking Companies |
Deeper Dive: News & Info About This Topic
- ESG Dive: CARB to Propose California Climate Risk Disclosure Rules
- Wolters Kluwer: California Climate Disclosure Laws
- ESG Today: California Releases FAQ for Mandatory Climate Reporting
- Mayer Brown: Navigating California’s Climate Disclosure Laws
- Google Search: California Climate Disclosure Laws
Author: Anaheim Staff Writer
Anaheim Staff Writer The Anaheim Staff Writer represents the experienced team at HEREAnaheim.com, your go-to source for actionable local news and information in Anaheim, Orange County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as major conventions at the Anaheim Convention Center, including NAMM and VidCon, exciting games at Angel Stadium and Honda Center, and developments at Disneyland Resort Our coverage extends to key organizations like the Anaheim Chamber of Commerce and Visit Anaheim, plus leading businesses in hospitality, entertainment, and innovation that power the local economy As part of the broader HERE network, including HERECostaMesa.com, HEREHuntingtonBeach.com, HERESantaAna.com, and HERELosAngeles.com, we provide comprehensive, credible insights into Southern California's dynamic landscape.
