California’s Climate Disclosure Laws: Politically Bold, Technically Familiar – and That’s a Good Thing

In the last week, California’s landmark climate disclosure laws – SB 253 and SB 261 – were formally confirmed after facing legal and procedural challenges. The two bills, originally passed in late 2023, mandate climate-related disclosures for large companies operating in the state. Since their confirmation, headlines have flown, white papers are already being drafted, and some commentators are declaring a new era for climate regulation in the US.

But let’s take a breath.

Because while these laws are politically significant, they’re not technically groundbreaking. They don’t introduce new climate science, new concepts, or even particularly novel requirements. What they do is bring the kind of transparency already expected in Europe into a major US market – and that matters. But it’s not time to reinvent the wheel.

Let’s unpack what’s actually in the legislation, why it’s politically important, and how businesses – and consultants – should respond.

What do SB 253 and SB 261 actually require?

Senate Bill 253 (SB 253) – the Climate Corporate Data Accountability Act – requires companies with over $1 billion in annual revenue that do business in California to disclose their full greenhouse gas emissions, including:

• Scope 1 (direct emissions),

• Scope 2 (indirect emissions from purchased electricity), and

• Scope 3 (indirect emissions from value chains), from 2027 onwards.

The data must be independently assured, and filed annually with a digital reporting platform run by the California Air Resources Board (CARB).

Senate Bill 261 (SB 261) – the Climate-Related Financial Risk Disclosure Act – is slightly broader in scope. It applies to companies with annual revenue over $500 million and requires biennial disclosure of climate-related financial risks, using a framework consistent with the Task Force on Climate-related Financial Disclosures (TCFD). That includes governance, risk management, and scenario analysis.

If you're familiar with CSRD, SECR, or UK TCFD-aligned disclosures, none of this will feel particularly new.

So why does this matter?

Because this isn’t France. It’s not the EU. This is the United States, and more specifically, California – the world’s fifth largest economy in its own right.

The US has long lagged behind other major economies on mandatory climate disclosure. Even the Securities and Exchange Commission (SEC) has struggled to finalise watered-down rules that now exclude Scope 3 and apply only to public companies. Against that backdrop, California’s action is a big deal.

This legislation forces thousands of companies – many of them large, private, and previously unburdened by disclosure requirements – to get serious about their climate risk and emissions data. And it does so in a way that bypasses the federal bottleneck entirely.

A political tipping point?

The real story here isn’t the content of the laws – it’s the signal they send.

California is a regulatory trailblazer. It has a history of passing standards that go on to shape national and even global policy – think of its vehicle emissions rules, which helped push forward cleaner car standards across the US. The same could happen here.

This is also a clear political positioning. California is drawing a line in the sand and saying: we're not waiting for federal leadership. In a country where climate change remains polarised, this kind of state-level leadership is likely to become more common – and more contested.

Legal challenges are almost inevitable. But the fact that these laws were signed, confirmed, and are moving forward matters more than any short-term delays. They’ve set a precedent.

Why consultants are already overcomplicating it

Let’s be clear: this isn’t some vast new compliance burden that requires starting from scratch.

The content of these disclosures closely mirrors frameworks that already exist. Many global companies already collect this data for their European operations, for ESG ratings, or for voluntary reporting initiatives. If you've built a TCFD-aligned process or calculated Scope 3 emissions under the GHG Protocol, you're already most of the way there.

And yet – a wave of white papers, webinars, and advisory briefings is already on the way, all positioned as if California has invented climate disclosure.

Here’s the reality: it hasn’t.

This is the same puzzle, just with a different border. The task now is not to overthink it, but to get on with it – map where your existing processes align, plug the gaps, and start building your assurance and reporting pathways.

If you’re a consultant, especially a boutique firm or in-house ESG team, resist the urge to make this sound more complex than it is. What clients need is clarity, continuity, and context. Not a reinvention of the climate disclosure wheel.

What does this mean for your business?

Even if you’re not directly covered by the new laws, the ripple effects will reach you:

• If you're a supplier to a large company operating in California, expect more detailed data requests.

• If you're headquartered elsewhere in the US or abroad, this may be your first brush with mandatory disclosure – but it won't be your last.

• If you’ve been watching from the sidelines, now is the time to get your systems in order – not just for compliance, but for competitiveness.

The focus here is on standardisation, data quality, and transparency. Companies that have relied on broad statements or selective Scope 1 and 2 disclosures will need to up their game – particularly when Scope 3 becomes mandatory from 2027.

What happens now?

The final rules are expected to be published by the California Air Resources Board (CARB) in 2026, giving companies some time to prepare. But that doesn’t mean sitting still.

Here’s what to do next:

• Audit your current state – do you already report under TCFD, CSRD, or SEC guidance? If so, where does that overlap?

• Map your gaps – where are you missing assurance, governance, or supply chain data?

• Engage upstream and downstream – talk to suppliers and partners about what they’ll need to provide or receive.

• Keep it proportionate – don’t throw time or money at complexity for its own sake. Focus on materiality and consistency.

Final thoughts

SB 253 and SB 261 are not revolutionary. But they are important.

They mark the beginning of the end for the US’s fragmented and voluntary approach to climate disclosure. They show that even in the absence of federal regulation, states can lead. And they confirm that the direction of travel – globally – is towards transparency, accountability, and real emissions data.

So yes, there will be noise. But don’t get distracted by it.

The rules aren’t new. The expectations aren’t new. The urgency certainly isn’t new.

What is new is the jurisdiction – and the precedent it sets.

Now it’s time to get to work.

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