California’s Climate Disclosure Regime & New CARB List

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Understanding Carbon Footprint & Emissions Scopes

A carbon footprint is the total amount of greenhouse gas (GHG) emissions produced directly and indirectly by an organization during its operations. To better manage and report emissions, these are categorized into three “scopes”:

  • Scope 1: Direct emissions from owned or controlled sources (e.g. on-site fuel combustion, company vehicles).

  • Scope 2: Indirect emissions from consumed energy (e.g. purchased electricity, heating, cooling).

  • Scope 3: All other indirect emissions across the value chain — supply chain, product use, business travel, waste, etc.

Effective climate regulation increasingly demands that companies measure and report across all three scopes, not just their direct emissions.

California’s Climate Disclosure Regime & New CARB List

California has enacted two landmark climate laws — SB 253 and SB 261 — that shift corporate climate accountability from voluntary action to legal obligation.

  • SB 253 (Climate Corporate Data Accountability Act) requires entities doing business in California with > $1 billion in annual revenue to publicize their Scope 1, 2, and 3 emissions.

  • SB 261 (Climate‑Related Financial Risk Act) mandates companies with revenues exceeding $500 million to disclose climate-related financial risks and mitigation efforts, in alignment with frameworks like TCFD.

  • Penalties for non-compliance are significant: up to $500,000 per year under SB 253 and $50,000 per year under SB 261.

  • The first reporting deadlines begin in 2026 for Scopes 1 & 2, with Scope 3 reporting required in 2027.

  • On September 24, 2025, the California Air Resources Board (CARB) published a preliminary list of companies believed to fall under the scope of SB 253 and SB 261.
    – Having your name on this list doesn’t automatically subject you to compliance obligations — and omission doesn’t ensure exemption. CARB invites feedback via a voluntary survey to refine the list.
    – Notably, CARB emphasized that all entities meeting the statutory criteria remain responsible for compliance regardless of list inclusion.
    – CARB is expected to issue proposed implementing regulations by October 14, 2025, triggering a 45‐day public comment period.

This publication is a major milestone in the regulatory rollout — it gives firms early insight into potential exposure and allows them to begin preparatory steps.

The preliminary list is available at https://thesustainability.network/wp-content/uploads/2025/10/SB-253_261_preliminary_list_092425.xlsx 

 

Why This Matters for Businesses

  • The CARB list gives you advance visibility into whether you may be included in California’s compliance regime, but self‑assessment is essential.

  • Even if you aren’t yet listed, your suppliers, clients or parent companies may be — and regulators can demand emissions data across value chains.

  • Regulatory lead time is short: your data systems, governance, and assurance protocols must be in place well before the 2026 reporting kick-off.

  • Entities that act early can turn compliance into a competitive advantage rather than a burden.

 

 

How TSN Supports Your Compliance Journey

At TSN, we provide a full-stack solution to help organizations navigate these new laws:

  • Automated capture and consolidation of Scope 1, 2, and 3 emissions data

  • Audit‑ready reporting aligned with GHG Protocol, TCFD, and state disclosure rules

  • Visualization dashboards, gap analysis, and scenario modeling

  • Support in stakeholder communication, verification, and regulatory filing

Whether your company is already on CARB’s list or you want to proactively prepare in case you’re added — TSN empowers you to move confidently forward.