Minimum CARB SB 261 Disclosure Requirements

Minimum CARB SB 261 Disclosure Requirements

SB 261 applies to both public and private U.S. companies with annual revenues over $500 million that conduct business in California. This includes companies based outside the state if they meet the revenue threshold and operate within California.

SB 26’s framework is modeled on the Task Force on Climate-Related Financial Disclosures (TCFD), which aims to provide decision-useful information for inclusion in financial filings. Final SB261 regulations are not expected until 2026.

The deadline for reporting under California’s new Climate-Related Financial Risk Act (SB 261) is January 1, 2026.

Minimum CARB requirement for disclosure

Governance

Describe your organization’s governance structure, if any, for identifying, assessing, and managing climate-related financial risks. Details should include:

• Discussion of any management oversight of climate-related risks and opportunities and should provide a description pertaining to Board oversight of those climate-related risks and opportunities (if the reporting entity has a Board)

Strategy

Describe the actual and potential impacts of climate-related risks and opportunities on the company’s operations, strategy, and financial planning (where material). This includes describing:

• The climate-related risks and opportunities the organization has identified over the short, medium, and long term.

• The impact of climate-related risks and opportunities on the organization’s operations, strategy, and financial planning

• The resilience of the organization’s strategy, if any, taking into consideration the future impacts of climate change under various climate scenarios. (As noted above, the discussion regarding climate scenarios may be qualitative in nature. Where a qualitative scenario-based assessment is feasible and relevant for a particular company, CARB encourages its inclusion.) For a discussion of material relevance as used in this context, see TCFD 2017. If using a different framework, refer to that framework’s guidance.

Risk Management

Describe how the reporting entity identifies, assesses, and manages climate-related risks, including a description of:

· The process the reporting entity uses for identifying, managing and assessing climate-related risks, and how those considerations and processes are integrated into the organization’s overall risk management.

Metrics and Targets

Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities adopted to reduce and adapt to climate-related risk, where such information is material

Scope 1, 2, and 3 emissions reporting may be disclosed if appropriate. However, this requirement is not currently included as a minimum CARB requirement for this initial reporting period.

Source: Climate Related Financial Risk Disclosures: Draft Checklist Posted September 2, 2025