By Johanna Kingsfield, Analyst – Consulting & Advocacy, Pickering Energy Partners
The views expressed by the author are their own and do not represent the views of Energy Workforce & Technology Council.
As 2025 is nearing an end, there has been significant discussion about California’s 2026 climate disclosure laws. With widespread federal deregulation throughout 2025, there have been debates on the repeal, pause, or cancellation of these laws. However, it looks like California is pushing forward with Senate Bill 219, which will have a significant impact on companies operating in California.
In October of 2024, Governor Newsome signed a series of senate bills into law called the California Climate Corporate Accountability Act. This Act aims to improve corporate transparency and enhance the information accessible to consumers and investors on climate-related business considerations, such as risks and greenhouse gas (GHG) emissions. Consisting of two parts, 253 and 261, Senate Bill 219 (SB 219) will be in effect as of January 1, 2026, with the California Air and Resource Board (CARB) to enforce. With slightly different requirements, both parts of SB 219 require large companies to disclose climate-related data and risk disclosures.
SB219 253 will require U.S. based entities doing business in California with over $1 billion in annual revenue to publicly disclose their Scope 1 & 2 GHG emissions by June 30th, 2026, with limited assurance required. Scope 3 GHG emission disclosures will additionally be required with limited assurance by the same time period beginning in 2027. In the Enforcement Notice of December 2024, CARB clarified that no enforcement action for incomplete reporting under SB219 253 will be taken for the first reporting cycle, as long as entities demonstrate “a good faith effort” to comply.
California Climate Corporate Accountability Act (SB219 261) will require U.S. based entities doing business in California with over $500 million in annual revenue to prepare biennial reports describing their climate-related financial risks and the measures they are taking to mitigate them, in line with global reporting frameworks. Companies must post their climate risk reports on their websites by January 1, 2026, and every 2 years thereafter. With the initial opening date being December 1, 2025, the official CARB “docket” for submissions and notifications states that the window will remain open until July 1, 2026.
Even though this legislation is approaching quickly, the full legal process is not yet complete, and the official docket has not been finalized. The proposed timeline indicates that we are currently in a 45-day comment period pursuant to California’s Administrative Procedures Act which is set to close on November 30th. After this period, CARB’s board hearing to consider adoption of the proposed rulemaking will occur on December 11-12, 2025. Staying up to date with the status and progression of these laws, it would not be surprising if the enforcement dates were pushed to a slightly later date in 2026.
Numerous lawsuits have come forward in attempts to push California’s climate laws off track. Recently, ExxonMobil filed a lawsuit in the U.S. federal court claiming that the state’s intent is to embarrass companies and coerce speech in support California’s ideologic goals, violating free speech rights under the First Amendment of the U.S. Constitution. So far, in previous challenges on the laws, the courts have sided with California, including the denied motion to block enforcement on free speech groups in a case brought by the U.S. Chamber of Commerce. While that case is still moving toward trial in October 2026, the Chamber of Commerce recently took a last stitch effort and filed an emergency application to the Supreme Court arguing in alignment with ExxonMobil’s lawsuit. These two lawsuits are likely to further legal complexity and influence the broader judicial landscape regarding climate disclosure mandates.
What Does This Mean for Companies? How Are Companies Preparing for Upcoming Disclosures?
- As mentioned, for the first reporting period CARB is requesting a “good faith effort” to report and comply. Clearly put, the state wants most recent and best available company data. They want to know what data companies currently have and what data they are planning to collect.
- Minimum requirements allow entities to use one of several frameworks to meet disclosure standards including a Final Report of Recommendations of TCFD (2017 the latest for SB261), IFRS Disclosure Standards, and/or a report developed in accordance with a regulated exchange, national government, or other governmental entity.
- Each report submitted to CARB should contain a statement on which reporting framework is applied, which recommendations and disclosures have been compiled (and which have not), and a short summary of the reasons why recommendations/disclosures have not been included as well as discussion of any plans for future disclosures.
- The reporting template associated with CARB’s SB219 (253) disclosure process is NOT mandatory for the first reporting cycle.
- Previous documents are permitted in the first reporting cycle as long as they consist of the minimum reporting standards.
- Fees will be applied to those within the legislature’s threshold that do not comply with the new laws. The actual fee definition, amount, and structure is yet to be finalized, but fees will occur annually, regardless of biennial reporting for SB261.
- CARB will present rulemaking for climate disclosure fees to the CARB Board in Q1 2026.
It is understood that much of this legislation is currently undergoing comment periods and being formal legislative proposals. Thus, significant logistics and details are still undetermined.
*Please note that as of 11/18/2025 the U.S. appeals court has paused Senate Bill 219 261. On the other hand, SB 219 253 remains unchanged and in full effect, as the request to halt this portion of the bill was denied.*
Energy Workforce partner Pickering Energy Partners provides insights on ESG due diligence, disclosures and reporting. Melanie Vujovich, Vice President, Pickering Energy Partners.
