February was a busy month for sustainability policy across the US, UK, and Europe.
In the United States, the draft California regulations received formal board approval, while the New York State Senate passed a copycat bill—also called the Climate Corporate Data Accountability Act—which will next go to the Assembly for consideration.
Meanwhile, in the UK, the government published the final UK Sustainability Reporting Standards (UK SRS), marking a significant milestone for ISSB-aligned disclosures. In parallel, the Financial Conduct Authority (FCA) launched a consultation proposing to make UK SRS mandatory for listed companies starting in January 2027.
Across the Channel, the European Council gave its formal stamp of approval to the Omnibus I package on February 24, completing the legislative process to finalize the scope of the CSRD and CS3D.
Below, we break down what companies need to know.
Join us on Tuesday, March 17, for our monthly sustainability policy briefing. Each month, we’ll cover the most important developments worldwide; this month features global legal experts on CBAM and CSRD, plus live Q&A with policy experts.
United States: CARB Board unanimously passes draft 253/261 regulations
After three years of evolving guidance, the California Air Resources Board (CARB) unanimously approved the implementing regulations for SB 253 (emissions reporting) and SB 261 (climate risk reporting).
Why it matters:
The vote formally locks in three things for 2026: the reporting deadline for SB 253 (August 10, 2026), the fee structure (estimated at $2-7k per entity), and definitions of key terms (in line with what was outlined in their November workshop).
The details:
The 5-hour hearing saw a range of public comments and questions, which the board bucketed into three broad areas: (1) an ask to extend reporting timelines in 2026 (CARB acknowledged but held firm); (2) questions over the current litigation (CARB confirmed SB 261 remains paused); and (3) objections to the exemption insurance companies receive for SB 253.
The latter point was particularly contentious, with Senators Wiener and Stern joining the chorus of people objecting to CARB granting this exemption to the insurance sector and questioning CARB’s legal ability to do so. CARB staff pushed back, arguing that they do have this power, and that including insurance companies would be duplicative given current obligations to the California Department of Insurance. Ultimately, the board asked staff to look again at whether current obligations were sufficient, though the board indicated that they would ultimately defer to the staff’s decision.
What to do now:
Get ready to report. As one of the board members concluded, this isn’t quite the finish line for emissions reporting, but it’s certainly the firing pistol. With timelines for 2026 locked in, there are now less than 6 months to complete and file first the emissions reports.
Start gathering data, check which fiscal year you need to disclose*, and reach out to Watershed for help compiling reports.
* As a reminder, if your fiscal year ends before Feb 1, you should report FY25-26 data in August; and if your fiscal year ends after Feb 1, you should report FY24-25.
United States: New York Senate passes Climate Corporate Data Accountability Act (SB 9072A)
Following California’s lead, New York is poised to become the second US state to mandate corporate emissions disclosure. On February 10, 2026, the New York State Senate passed Senate Bill 9072A—the Climate Corporate Data Accountability Act—by a 40–22 vote.
Why it matters:
If enacted, the bill would extend mandatory scope 1, 2, and 3 emissions reporting requirements to large companies doing business in New York—mirroring California's SB 253 and growing a patchwork of US state-level climate disclosure laws. Given New York's economic significance, this could affect a broad range of US and multinational companies.
Proposal details:
- Who would be covered: entities that do business in New York or derive receipts from activities in the state with annual revenues exceeding $1 billion in the prior fiscal year, including revenues from subsidiaries
- Scope 1 and 2 reporting: required starting in 2028 for the prior fiscal year
- Scope 3 reporting: required starting in 2029 for the prior fiscal year; exact deadlines for both years to be determined
What’s next:
- The bill still requires passage by the Assembly and signature by Governor Hochul before it becomes law.
- The legislative session runs through June 2026, so a decision is expected in the coming months.
- Companies with significant New York operations should monitor this bill closely, particularly those already preparing for California's SB 253—the disclosure requirements are substantially similar. Reach out to Watershed for guidance on how to prepare.
UK: UK SRS finalized, FCA proposes mandatory application for listed companies
Read our full guide to UK SRS here.
February brought a major step forward for UK sustainability disclosure, as the UK Government published the final UK Sustainability Reporting Standards—UK SRS S1 and UK SRS S2—following a months-long consultation. The standards, which are based on the ISSB's IFRS S1 and IFRS S2, are now available for voluntary use by any UK entity. The UK government and other supervisory bodies intend for the SRS to eventually replace all existing TCFD-aligned disclosure requirements.
Simultaneously, the FCA launched a consultation on January 30, proposing to replace its existing TCFD-aligned listing rules with new requirements tied to UK SRS.
Why it matters:
The finalization of UK SRS, combined with the FCA's proposed mandatory application, signals that the UK is firmly aligning itself with the global ISSB baseline—bringing greater comparability for investors and clarity for companies. Listed companies in particular now have significant visibility into what sustainability reporting will look like from 2027 onwards.
The details:
- Interaction with existing requirements. The UK SRS are intended to eventually replace all existing TCFD disclosure requirements. Additionally, the UK Department of Energy Security and Net Zero is reviewing the UK SRS to see how they might interact with the long-standing Streamlined Energy and Carbon Reporting (SECR) requirement.
- FCA proposed mandatory requirements: Under the FCA’s proposal, UK SRS S2 (excluding scope 3 GHG emissions) would be mandatory for in-scope listed companies. Scope 3 GHG emissions and disclosures on sustainability topics beyond climate would be captured under a "comply or explain" approach.
- Phased implementation: The FCA proposes rules coming into force starting on January 1, 2027.
- Unlisted companies: The government is expected to launch a separate consultation on extending mandatory UK SRS reporting to ‘economically significant’ private companies shortly.
What to do now:
- If you are a listed company in one of the FCA's in-scope listing categories, now is the time to assess your readiness to report against UK SRS S2 and respond to the FCA's consultation before March 20. Watershed can help you assess your gaps and prepare.
- If you are a private company, look out for the government’s future consultation.
EU: European Council gives final approval to Omnibus I
Read our full guide to the Omnibus agreement here
On February 24, 2026, the European Council gave its final approval to the Omnibus I simplification package—completing the EU legislative process and formally enshrining changes to both the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CS3D).
Why it matters:
Formalizing the agreement on time shows the EU is serious about moving on from political discussions about Omnibus to implementation.
The details:
- A month of procedural formalities remains before the agreement enters into force. Entry into force starts the one-year clock for member state transposition.
What to do now:
- There are officially no more changes expected to the CSRD thresholds, so assess whether you are still in-scope and revisit your CSRD reporting roadmap accordingly.
- If you are a Wave 1 company still in-scope, you may choose between using the original or the Simplified ESRS for your 2027 reporting on FY26 data. As a reminder, the Simplified ESRS are still in draft status - they are expected to be finalized by mid-2026.
- If you are a Wave 1 company that is now out-of-scope, monitor any exemptions your HQ’s member state provides
