Divulgations climatiques en Californie – SB 261 – Date limite de déclaration fixée au 1er janvier 2026 et « liste préliminaire » des entités concernées établie par le CARB
While the January 1, 2026, statutory deadline for reporting under California’s Climate-Related Financial Risk Act (SB 261) is quickly approaching, there is still time for regulated entities to comply with the law. Although each reporting entity must prepare a Climate Related Financial Risk Report (“Report”), the state agency responsible for SB 261 compliance, the California Air Resources Board (“CARB”), has indicated that the key to initial compliance is a good faith effort to comply.
CARB “Preliminary List” of Covered/Reporting Entities
On September 24, 2025, CARB posted a preliminary list of companies that it believes may be subject to the requirements under SB 261 and California’s Climate Corporate Data Accountability Act (SB 253)[1]. CARB used data from the California Secretary of State as of March 2022 to prepare this initial list, and also explicitly stated that the list is not exhaustive. Additionally, the list does not reflect the only statutory exemption, which exempts insurance companies, as defined in SB 261.
Further, this list should not be considered exhaustive as the statutory language of applicability for both SB 261 and SB 253 is much broader than what triggers filing with the Secretary of State for a particular legal entity. For example, the Secretary of State data would not capture entities that trigger reporting thresholds based on an aggregation of revenues for subsidiaries operating in California or the revenues of a parent holding company located outside of California, with sufficient sales/transactions via a subsidiary in California; however, such revenues are relevant to the scope of applicability according to the language of each statute.
Although far from complete, the list is a helpful tool for those listed to determine whether they are among those CARB has identified, at least initially, as requiring compliance by January 1, 2026. CARB’s preliminary list can be found here. CARB also prepared high-level Frequently Asked Questions (“FAQs”) and a Draft Checklist for complying with SB 261.
Contexte
As discussed in our article summarizing the initial adoption of various California climate-disclosure rules, SB 261 applies to U.S. companies with total annual revenues in excess of US$500mn doing business in California (“Covered Entity”). Specifically, “Covered entity” means a corporation, partnership, limited liability company, or other business entity formed under the laws of California, “the laws of any other state of the United States or the District of Columbia, or under an act of the Congress of the United States with total annual revenues in excess of five hundred million United States dollars ($500,000,000) and that does business in California.”[2] What constitutes “doing business in California” is not further defined in either SB 261 or SB 253. We anticipate additional clarity regarding this definition to be promulgated via regulation; however, CARB has preliminarily indicated that it is considering using the California Franchise Tax Board definition of “doing business” which is broadly defined as “actively engaging in any transaction for the purpose of financial or pecuniary gain or profit” including satisfying any of the following conditions:
- Being organized or commercially domiciled in California;
- Having sales of the entity in California that exceed $735,019 (2024);
- Owning real property and tangible personal property of the entity in California in that exceeds of the lesser of $73,502 (2024) or 25 percent of the entity’s real property and tangible personal property; or
- Paying employees in California by the entity an amount that exceeds $73,502 (2024) or 25 percent of the total compensation paid by the entity.[3]
Applicability shall be determined based on the business entity’s revenue, sales, owned property and payroll for the prior fiscal year. We note that this definition is very expansive, and is intended to require compliance of as many entities as possible.
Covered Entities must prepare a Climate Related Financial Risk Report in accordance with:
- The recommended framework and disclosures contained in the Final Report of Recommendations of the Task Force on Climate-related Financial Disclosure;
- The International Financial Reporting Standards Sustainability Disclosure Standards, as issued by the International Sustainability Standards Board (IFRS S2); or
- Otherwise developed in accordance with any regulated exchange, national government, or other governmental entity, including a law or regulation issued by the United States government.
The Report must be posted on the company’s website and the regulated entity must provide the link to such Report via a public docket that will be established by the CARB in December 2025.While CARB was expected to promulgate rules regarding which entities are “Covered Entities” and more details on how to comply with the reporting requirements, CARB has now indicated those rules are not expected before December 2025. Although this presents a compliance challenge for many entities, SB 261 does appear to provide some leniency. Specifically, a Covered Entity shall “provide the recommended disclosures to the best of its ability, provide a detailed explanation for any reporting gaps, and describe steps the covered entity will take to prepare complete disclosures.” CARB further reinforces this sentiment in its recent FAQs stating that disclosures made for the upcoming January 1, 2026 deadline may be based on the “best available information” and that data sources may have changed throughout 2024 and 2025 if additional data collection methods have been put in place during that time.
There is Still Time to Comply With SB 261
While the deadline is fast approaching, there is still plenty of time for “Covered Entities” to prepare reports in compliance with SB 261. Foley & Lardner is well positioned to assist you with navigating the climate-related risk requirements discussed above and preparing any required reports and disclosures. Please reach out to any of the authors of this Alert for specific recommendations, assistance in preparing your Report, or for additional information about any of the issues discussed above.
[1] Note that compliance with SB 253 is not required until later in 2026. Per SB 253, the Climate Corporate Data Accountability Act, reporting entities must report Scope 1 and Scope 2 Greenhouse Gas emissions in 2026, on a date to be set by CARB through the regulatory process, covering the prior fiscal year. Scope 3 emissions reporting begins in 2027, covering the prior fiscal year. However, as CARB has not officially begun the rulemaking process, CARB issued an Enforcement Notice in December 2024 stating that they will exercise enforcement discretion during the first round of reporting. Additionally, CARB indicated during its August 2025 workshop that it was targeting June 2026 for the first SB 253 reporting deadline.
[2] Cal. Health & Safety Code § 38533.
[3] Cal. Rev. & Tax. Code § 23101(a)-(b).
