Question 1

How do I know if my company must comply with SB 253 or SB 261?

Accepted Answer

Check if you have any corporate entities which are “doing business” in California. If their revenue is above $500M, you’re in scope for SB 261; if it’s above $1B you’re in scope for both. Subsidiaries can report at the parent level, but fees apply to each entity.

Question 2

What does SB 253 require companies to report?

Accepted Answer

2026: Annual Scope 1 and 2 greenhouse gas emissions (with limited assurance).

2027: Annual Scope 3 (value chain) emissions.

2030: Scope 1 and 2 must be verified with “reasonable assurance” by an accredited third party.

Question 3

When is the first SB 253 emissions report due?

Accepted Answer

June 30, 2026 (though exact date still TBC by CARB). If your company has $1B+ in revenue, you’ll need to report your Scope 1 and 2 greenhouse gas emissions for the 2025 calendar year.

Question 4

When is the first SB 261 climate risk report due?

Accepted Answer

January 1, 2026. If your company has $500M+ in annual revenue and does business in California, you’ll need to publish a climate risk report every two years starting then.

Question 5

What does SB 261 require companies to report?

Accepted Answer

Companies must publish a climate risk report every two years, starting January 1, 2026. Reports must align with one of these frameworks:

TCFD (Task Force on Climate-Related Financial Disclosures)

IFRS S2 (ISSB)

Another regulated government or exchange-mandated framework

Reports must cover all four pillars: governance, strategy, risk management, and metrics/targets. Emissions metrics and scenario analysis are optional in the first cycle.

Question 6

Do companies need to do a full TCFD report for SB 261?

Accepted Answer

Reports must align with TCFD, IFRS S2, or another regulated framework. You should cover all four pillars of TCFD/IFRS, though emissions metrics and quantitative scenario analysis are optional in the first cycle. The minimum requirements have been set out by CARB here.

Question 7

When do the assurance requirements get tougher?

Accepted Answer

2030. Emissions data for Scopes 1 and 2 must be verified at a higher “reasonable assurance” level by a third party. CARB will also determine in 2027 whether assurance is needed for Scope 3.

Question 8

When do Scope 3 emissions need to be reported?

Accepted Answer

2027. You’ll need to add Scope 3 (value chain) emissions reporting, using 2026 data.

Question 9

Will CARB provide a reporting template?

Accepted Answer

SB 253: Yes. Draft template expected September 2025.

SB 261: No. Companies must format their own public report.

Question 10

What does “good-faith compliance” mean?

Accepted Answer

CARB has indicated it will not penalize reasonable omissions in the first filing cycle if companies disclose using the best available data they already collect by December 2024. Clear explanations of data gaps and improvement plans are expected.

Question 11

What are the penalties for non-compliance?

Accepted Answer

SB 253 (emissions reporting): Up to $500,000 per year.

SB 261 (climate risk reporting): Up to $50,000 per year.

CARB may consider mitigating factors like good-faith efforts and past compliance.

Question 12

Do fiscal year companies have different deadlines?

Accepted Answer

Yes. Companies may use either fiscal year or calendar year data if they disclose which they’re using and rely on the most recent available data (e.g., FY 2025 ending March 31, 2026).

Question 13

Is litigation delaying the rules?

Accepted Answer

No. Although business groups have challenged the laws in court, the district court denied an injunction in August 2025. The case is on appeal, but compliance deadlines remain in effect.

Question 14

What are the terms of the Guaranteed Assurance program?

Accepted Answer

Watershed’s Guaranteed Assurance program is designed to give companies reporting to SB 253 peace of mind as they navigate assurance.

The Guaranteed Assurance program is available to companies that (1) use Watershed to prepare carbon disclosures for California’s SB 253, (2) use our standard methodologies to measure their emissions, and (3) purchase our Verification Support package.

When you join the program, a Watershed expert will work hand-in-hand with you and your auditor through the assurance process – answering auditor questions, tracing back to raw data, explaining methodologies. We commit that we will work with you until you pass assurance.

To underscore that commitment: if you enroll in the program and don’t pass assurance within 9 months after verification begins, Watershed will waive the fee for the next year of your Watershed subscription – up to $250,000, covering the software modules and services you’d previously purchased. We want to give you complete confidence as you navigate California’s assurance requirements.

This applies to (1) assurance required by SB 253 – initially, limited assurance of Scope 1-2 emissions; Scope 3 and reasonable assurance as requirements phase in, (2) greenhouse gas inventories that use Watershed’s standard methodologies and emissions factors. The guarantee does not apply if you fail assurance because you uploaded inaccurate or incomplete data, or if you decline to respond to requests for more information or correction through the assurance process.

When you join the program, detailed terms will be included in your order form.

Reach out if you’d like to join the program or chat with an expert about navigating assurance.

Streamline SB 253 and SB 261 reporting

California's climate disclosure rules

Streamline disclosure with Watershed

AI-accelerated climate-risk reporting

Audit-ready emissions measurement

Guaranteed Assurance program

Built-in expertise and support

Future-proof for what’s next

Explore our California climate disclosure solution

SB 253 + SB 261 FAQs

Answers to common questions on California's climate disclosure law (CCDAA)

California compliance essentials

Announcing AI-accelerated reporting and Guaranteed Assurance program for California disclosure

The latest on SB 253 and 261 with Senator Scott Wiener

Answers to common questions on California's climate disclosure law (CCDAA)

California climate disclosure laws: Everything companies need to know

California’s climate disclosure rules: a guide for companies

Talk to an expert

California's climate disclosure rules

Streamline disclosure with Watershed

AI-accelerated climate-risk reporting

Audit-ready emissions measurement

Guaranteed Assurance program

Built-in expertise and support

Future-proof for what’s next

Explore our California climate disclosure solution

SB 253 + SB 261 FAQs

How do I know if my company must comply with SB 253 or SB 261?

What does SB 253 require companies to report?

When is the first SB 253 emissions report due?

When is the first SB 261 climate risk report due?

What does SB 261 require companies to report?

Do companies need to do a full TCFD report for SB 261?

When do the assurance requirements get tougher?

When do Scope 3 emissions need to be reported?

Will CARB provide a reporting template?

What does “good-faith compliance” mean?

What are the penalties for non-compliance?

Do fiscal year companies have different deadlines?

Is litigation delaying the rules?

What are the terms of the Guaranteed Assurance program?

Answers to common questions on California's climate disclosure law (CCDAA)self.__wrap_n!=1&&self.__wrap_b("_R_deculubspaivb_",1)

California compliance essentials

Announcing AI-accelerated reporting and Guaranteed Assurance program for California disclosure

The latest on SB 253 and 261 with Senator Scott Wiener

Answers to common questions on California's climate disclosure law (CCDAA)

California climate disclosure laws: Everything companies need to know

California’s climate disclosure rules: a guide for companies

Talk to an expert

Answers to common questions on California's climate disclosure law (CCDAA)