CARB Issues Proposed Climate Disclosure Regulations

• On July 27, 2026, CARB released a Notice of Proposed 15-Day Modifications to its initial implementing regulations for California’s comprehensive climate disclosure laws, the Climate Corporate Data Accountability Act (SB 253) and the Climate-Related Financial Risk Act (SB 261). The proposed changes follow CARB’s June withdrawal of its initial 45-day rulemaking package from the Office of Administrative Law (OAL) and would defer the first SB 253 reporting deadline from August 10 to November 10, 2026, while clarifying first-year reporting, applicability, consolidated reporting and fee payments and recordkeeping.
• On September 1, 2026, CARB issued California Corporate Greenhouse Gas Reporting Guidance for SB 253 2026 Reporting Submittals explaining how entities may submit their 2026 SB 253 reports and how CARB intends to exercise enforcement discretion during the first reporting cycle.    

Background on California Climate Disclosure Laws
As we have discussed in previous alerts on this topic, the proposed initial regulations were relatively narrow in scope and limited to defining certain key terms, establishing the program fee structures, explaining fee enforcement and setting the initial SB 253 reporting timeline. These proposed initial regulations were submitted to OAL for review on May 20, 2026, but CARB ultimately withdrew those proposed regulations on June 23, 2026, citing the need for more time to make additional clarifying changes. On July 27, CARB released for a 15-day public review and comment period proposed modifications to the regulations. This comment period closed on August 11, 2026, but CARB has not yet completed final approval of the modified proposed regulations.

CARB’s 15-Day Modifications
CARB’s proposed 15-day modifications contain a number of additional changes to applicability provisions, definitions and key terms and text concerning the manner of fee payment. But the most substantive change CARB made was to delay the deadline for reporting Scope 1 and Scope 2 emissions under SB 253 from August 10 to November 10, 2026, a timing change made to “give reporting entities additional time [for compliance] following the formal adoption of the Regulation.” The proposed revised language would also clarify that Scope 3 reporting would not be required for the 2026 reporting year and would permit a parent company to submit a consolidated report for a subsidiary that independently qualifies as a reporting entity. CARB also proposes to add its first-year enforcement approach to the regulatory text, consistent with its December 5, 2024 Enforcement Notice, in which CARB clarified that reporting entities are not required to submit an SB 253 report in 2026 (and only 2026) if “the reporting entity did not possess Scope 1 or Scope 2 emissions information and was not collecting information on or before December 5, 2024.” Such entities will only be required by November 10 to submit to CARB a statement on company letterhead making this representation.

The proposed 15-day modifications would also clarify how entities should assess applicability. The proposed text would specify that the “doing business in California” and revenue tests would be evaluated at the individual business-entity level. For revenue, intercompany transactions between entities in the same combined reporting group would be excluded, consistent with California tax regulations. CARB clarifies that these revisions do not expand applicability.

For the electricity sector, the proposed text would narrow the exemption for entities whose only California activity consists of wholesale electricity transactions by specifying that the transactions must “occur in interstate commerce.” Further, CARB proposes to clarify the definitions of “parent company” and “subsidiary” by referring to the direct corporate-association provisions in its cap-and-trade regulations. The proposed revisions would permit a parent company to consolidate reports and fee payments for qualifying subsidiaries. However, the revenue aspect would continue to be evaluated at the individual business-entity level rather than aggregated at the parent company level.

CARB also proposes to move the date for issuing annual fee determination notices from September 10 to December 10, consistent with the proposed November 10 reporting deadline and CARB’s plan to assess fees thirty calendar days after the deadline. Each reporting entity or covered entity would have sixty calendar days from the fee determination notice to remit payment. Parent companies may make consolidated payments on behalf of qualifying subsidiaries. The proposed revisions would also specify that entities must retain California tax records demonstrating that they meet the applicable revenue and “doing business in California” thresholds for five years.

Finally, under the proposed regulations, a company’s fiscal year would continue to dictate which year of emissions data would be reported. If an entity’s fiscal year ends on or before February 1, the “applicable preceding fiscal year” would be the fiscal year ending in the current calendar year. If the fiscal year ends after February 1, the “applicable preceding fiscal year” would be the fiscal year ending in the prior calendar year. However, an entity may elect to report Scope 1 and Scope 2 emissions from its most recent preceding fiscal year if that data is available. The proposed regulations also would allow reporting entities to submit Scope 1 and Scope 2 emissions for their prior fiscal year based on information they already had or were collecting as of December 5, 2024.

CARB’s 2026 SB 253 Reporting Guidance
CARB’s September 1 SB 253 guidance provides three acceptable formats for 2026 Scope 1 and Scope 2 reporting:

- An existing annual report that includes Scope 1 and Scope 2 greenhouse gas (GHG) emissions;

- Existing Scope 1 and Scope 2 data reported to another program or voluntary initiative; or

- CARB’s draft Scope 1 and Scope 2 GHG reporting template.

The reporting guidance also clarifies that the regulations will not require a specific emissions factor dataset for 2026 reporting but may use the eGRID 2024 dataset published by the Cornerstone Sustainability Data Initiative or “may [] elect to use alternative credible emission factor sources and are encouraged to identify the emission factors used and their sources.” CARB has also developed a voluntary 2026 report intake platform that entities may use to provide contact and billing information, submit Scope 1 and Scope 2 reports, or notify CARB that they do not plan to report emissions in 2026. Alternatively, entities may email their submissions to climatedisclosure@arb.ca.gov. While limited assurance is required for 2026 reporting, the guidance notes that CARB will accept 2026 submissions whether or not limited assurance has been obtained.  

Implications
CARB’s decision to extend the SB 253 reporting deadline to November 10, 2026, will come as a welcome concession to many companies doing business in California, particularly for those that may be making their first-ever climate disclosures. Potentially covered companies should assess applicability under the clarified entity-level revenue and California-nexus tests, confirm which fiscal year applies and determine whether they will submit an existing report, existing data from another program or CARB’s voluntary template. Entities that were not collecting and were not planning to collect Scope 1 and Scope 2 data as of December 5, 2024, should prepare CARB’s recommended statement of non-reporting on company letterhead, which will likely satisfy their SB 253 reporting requirements for 2026. Other companies subject to SB 253 should work with their internal and external legal advisors to prepare their Scope 1 and Scope 2 reporting for uploading to CARB’s intake platform by November 10, 2026, while monitoring final OAL action and the subsequent rulemaking for 2027, particularly as rule development continues for Scope 3 emissions reporting. Pillsbury will continue to actively monitor developments on any further CARB rulemaking and will be available to advise clients on any questions that may arise.