Are You Listed? California Companies Likely Subject to Climate Disclosure Laws

The California Air Resources Board (CARB) recently issued a preliminary list of over 4,000 public and private entities that are likely required to adhere to California’s guidelines concerning the disclosure of climate-related financial risks by January 1, 2026, and Scope 1 and 2 greenhouse gas emissions by June 30, 2026. This initiative marks CARB’s unconventional approach to establishing regulations and guidance for businesses falling under this regulatory framework. CARB is targeting companies with an annual revenue exceeding $500 million that must comply with these regulations.

Companies are facing time constraints to meet the impending deadlines for the two climate disclosure laws in California, while businesses are also eager to receive clear directives from CARB on their compliance obligations. Passed in 2023, the Climate-Related Financial Risk Act (SB261) stipulates that all U.S. public and private companies (excluding insurance companies) operating in California with annual revenue exceeding $500 million must disclose their climate-related financial risks by January 1, 2026, and every two years thereafter. Likewise, the Climate Corporate Data Accountability Act (SB253) mandates companies with revenues exceeding $1 billion to report their greenhouse gas emissions, including Scope 1 and 2 emissions, by June 30, 2026.

With these laws, substantial responsibilities come into play, especially for private entities new to compulsory climate disclosures. They must focus on maintaining robust internal tracking systems, ensure third-party verification, and engage in strategic planning for compliance. The withdrawal of climate disclosure regulations by the Securities and Exchange Commission has made these laws even more critical for the regulated community, raising questions and concerns about which companies fall under the purview of these laws. There have been multiple public workshops hosted by CARB addressing the issue of what constitutes “doing business” in California.

On September 24, 2025, California introduced a roster of potentially over 4,000 companies that could be impacted by SB 253 and SB 261 reporting stipulations. CARB is inviting voluntary input from these companies to clarify why they believe they are subject to the laws and to determine whether they should be exempt or not. Despite being on the preliminary list or providing feedback, all companies are obligated to adhere to the statutory requirements. The current outreach to stakeholders underscores the wide-ranging uncertainties and perplexities surrounding the companies subject to these laws, indicating the continued lack of clarity in the regulatory application.

This list and the survey questions present an essential opportunity for companies to scrutinize their inclusion and submit their viewpoints during CARB’s ongoing rulemaking process. Companies should proactively engage with CARB to influence the rulemaking process and achieve efficient compliance outcomes. Additionally, on October 14, 2025, CARB plans to release a proposed regulation and receive public feedback until November 30, 2025. It is crucial for companies to advocate for compliance by maintaining GHG accounting and disclosure practices already in place for other regulatory purposes.

Ballard Spahr is closely monitoring CARB’s rulemaking developments and is prepared to guide companies in determining their compliance obligations, engage with CARB on regulatory matters, and align climate risk disclosures with the Task Force on Climate-related Financial Disclosures (TCFD) framework. Navigating third-party assurance requirements and establishing compliance frameworks are also part of the assistance Ballard Spahr can provide to companies facing these complexities.