Imagine you’re running a business, and suddenly the state tells you to start sharing your company’s carbon footprint and climate risks with the public. That’s exactly what’s happening for thousands of companies in California, and the clock is ticking.
California’s new climate disclosure laws, SB 253 and SB 261, are set to take effect in 2026. These laws are making waves far beyond the Golden State, affecting businesses nationwide that do business in California. The rules are simple on paper: if your company makes over $1 billion a year, you’ll need to report your direct and indirect carbon emissions annually. If you make over $500 million, you’ll have to disclose how climate change could hurt your business every two years.
But here’s the catch: the details are still being ironed out. The California Air Resources Board (CARB) is still finalizing the exact rules, and companies are left guessing about what counts as “doing business in California” and how to calculate their emissions. To make things even trickier, a third-party consultant will need to certify your emissions report, adding another layer of complexity.
Take, for example, a national retailer with warehouses and stores across the country. Under SB 253, they’ll need to report emissions from everything from burning fossil fuels in their trucks to employee business travel. For SB 261, they’ll have to assess how climate risks—like extreme weather or supply chain disruptions—could impact their bottom line. The reports will follow the Task Force on Climate-Related Financial Disclosures (TCFD) framework, which means companies will need to share details about their governance, risk management, and financial planning around climate change.
But not everyone is happy with these new rules. The U.S. Chamber of Commerce and other business groups are asking the Supreme Court to pause the laws while legal challenges play out. They argue that the laws could force companies to make “compelled speech” and create an unfair burden, especially for businesses outside California. The Supreme Court hasn’t made a decision yet, but the uncertainty is leaving companies in a tough spot. Experts advise businesses to keep preparing for the deadlines, even if there’s a chance they could be delayed.
Meanwhile, the Securities and Exchange Commission (SEC) has its own climate disclosure rule, but it’s also on hold due to litigation. This means companies are caught between state and federal regulations, with no clear path forward. The situation is like trying to navigate a maze with moving walls—just when you think you’ve figured it out, the rules change.
For businesses, the takeaway is clear: start preparing now. Even if the laws are paused or modified, the trend toward greater climate transparency is here to stay. Companies that get ahead of the curve will be better positioned to handle whatever comes next. And for everyone else, it’s a reminder that climate compliance isn’t just about meeting regulations—it’s about building resilience and trust in an uncertain world.
References:
- https://www.gtlaw.com/en/insights/2025/11/new-california-climate-disclosure-law-deadlines-are-rapidly-approaching-compliance-considerations-for-companies
- https://idahobusinessreview.com/2025/11/17/supreme-court-california-climate-disclosure-laws/
- https://www.keramida.com/news/client-alert-the-us-supreme-court-is-asked-to-stop-compliance-with-california-climate-laws
- https://climate.law.columbia.edu/news/climate-litigation-updates-november-17-2025
- https://www.nortonrosefulbright.com/en-us/knowledge/publications/e4b725d7/esg
- https://cen.acs.org/policy/Nov-14-Policy-Watch-US-government-reopens/103/web/2025/11
