California SB 253 vs. SB 261

SB 253 and SB 261 were passed together in 2023 as part of the same climate transparency push, and companies frequently confuse the two, or assume complying with one satisfies the other. They don't. They ask different questions, apply to different sized companies, and, as of mid 2026, are subject to very different legal status.

This article provides general information current as of July 2026, not legal advice. Consult qualified counsel for guidance on specific compliance obligations.

The Core Difference

SB 253, the Climate Corporate Data Accountability Act, asks how much greenhouse gas a company emits. It requires companies with more than $1 billion in annual revenue doing business in California to disclose Scope 1 and Scope 2 emissions annually, with Scope 3 disclosure following in a later phase, and to obtain independent third party assurance of that data.

SB 261, the Climate Related Financial Risk Act, asks what climate risk a company faces and what it's doing about it. It requires companies with more than $500 million in annual revenue to publish a biennial report on climate related financial risk, modeled on the TCFD framework, covering both physical and transition risk.

Key Statistic

SB 253's lower revenue threshold is double SB 261's, meaning some companies with revenues between $500 million and $1 billion fall under SB 261's climate risk reporting requirement without being subject to SB 253's emissions disclosure requirement at all.

Side by Side

	SB 253	SB 261
Full name	Climate Corporate Data Accountability Act	Climate Related Financial Risk Act
Revenue threshold	Over $1 billion	Over $500 million
What it requires	Scope 1, 2, and eventually 3 emissions disclosure	Biennial climate related financial risk report
Assurance required	Yes, third party	Not explicitly required
Framework basis	GHG Protocol	TCFD
First deadline	Scope 1 and 2 deadline proposed for November 10, 2026	Originally January 1, 2026
Current status	Proceeding through updated CARB rulemaking	Enforcement paused by Ninth Circuit injunction

Why the Legal Status Diverged

Both laws faced the same First Amendment based legal challenge from business groups, but the Ninth Circuit's November 2025 injunction applied specifically to SB 261, not SB 253. CARB has continued moving SB 253 forward, approving initial implementing regulations in February 2026 and later proposing a November 10, 2026 first deadline for Scope 1 and 2 disclosure, while explicitly declining to enforce SB 261's original January 1, 2026 deadline pending the outcome of the appeal.

What This Means for Compliance Planning

A company over the $1 billion threshold needs to treat SB 253 as an active, near term deadline regardless of what happens with SB 261. A company between $500 million and $1 billion should treat SB 261 preparation as prudent rather than urgent, the requirement to report climate risk hasn't disappeared, only its enforcement timeline is currently uncertain. In practice, most of the underlying work, building emissions data systems, identifying physical and transition risk exposure, overlaps heavily between the two laws, so companies preparing for one are usually most of the way prepared for the other regardless of which deadline lands first.

Sources

California Air Resources Board, SB 253 and SB 261 Implementing Regulations; U.S. Court of Appeals for the Ninth Circuit, injunction order.