requires a public report on climate-related financial risks to help companies avoid penalties and build a lasting climate strategy.
Requirements
A biennial (every two years) Climate-Related Financial Risk Report, consistent with the Task Force on Climate-Related Financial Disclosures (TCFD) framework.
Report Contents
Who it impacts
Public and private companies
Over $500 million in annual revenue
Doing business in California
CARB’s initial concept aligns with the state tax code, generally applying to companies organized in California or those exceeding specific thresholds for in-state sales (>735k ), property, or payroll (>735k), property, or payroll(>73k). This definition is not yet final and is under public review before being finalized. See the full definition
Enforcement paused
A court injunction has temporarily paused mandatory enforcement and CARB has opened a voluntary docket for companies to submit reports.
$50,000 annual penalty
for non-compliance or for reports found to be insufficient by the state
Proposed fee
$1,403 (annual flat fee) to cover program implementation costs
Timeline
Enforcement paused
A court injunction has temporarily paused mandatory enforcement and CARB has opened a voluntary docket for companies to submit reports.
2025
Voluntary docket open from December 1, 2025 – July 1, 2026.
2026
First report must be published by January 1 (currently unenforceable due to court injunction).
2028
Reports must be updated every two years thereafter.
SB 261 Understanding the TCFD framework for SB 261
SB 261 requires reporting to be consistent with the TCFD framework, which is built on four key pillars. While all are important, the "Metrics & Targets" pillar is the quantitative backbone of your entire report.
Governance
Strategy
Risk Management
Metrics & Targets
SB 261 Reporting How Arbor provides the foundation for your SB 261 report
Arbor provides the verified emissions data essential for a credible SB 261 report. Our platform empowers you and your partners to build a strong disclosure on a solid data foundation.
Master the "Metrics & Targets" Pillar
Arbor’s platform automatically provides the auditable Scope 1, 2, and 3 emissions data to strengthen this critical section of your report. While CARB has relaxed the strict emissions requirement for the initial SB 261 filing, providing this data ensures full TCFD alignment and future-proofs your reporting against SB 253 requirements.
Empower Your Strategy & Risk Management
Without accurate emissions data, assessing transition risks like carbon taxes or changing consumer preferences is impossible. Arbor’s data gives you the quantitative insights needed to inform your qualitative narrative for the Strategy and Risk Management pillars.
Streamline Collaboration with Partners
Provide your consultants or internal risk teams with a single source of truth for your emissions data. Arbor’s audit-ready platform ensures everyone is working with consistent, reliable numbers, making the entire reporting process more efficient. Arbor also collaborates with industry-leading consultants to facilitate gap assessments, prepare disclosures, implement governance strategies, and facilitate audits in a straightforward and reliable manner.
What Arbor's customers have to say
Arbor's platform and invaluable expertise helped us bridge the complex, data-scarce challenge of generating CO₂e footprints by delivering clear carbon insights that resonate with our consumers and partners.
Thomas Matthews
Sustainability at kitround
Thomas Matthews
Sustainability at kitround
Aide énormément nos équipes de produits et de conception.
André Goodman
Responsable de la RSE/du développement durable
André Goodman
Responsable de la RSE/du développement durable
Pour gérer et réduire efficacement leurs émissions, les entreprises ont besoin de données précises, granulaires et utiles à la prise de décisions. Les outils et les modèles tels que ceux développés par Arbor sont essentiels pour fournir ces informations aux entreprises.
David Carlin
Responsable des risques, Initiative financière du Programme des Nations Unies pour l'environnement (UNEP FI)
David Carlin
Responsable des risques, Initiative financière du Programme des Nations Unies pour l'environnement (UNEP FI)
SB 261 vs SB 253 A unified strategy for California climate disclosures
When you partner with Arbor for both regulations, our SB 253 platform automatically generates the verified data needed for the "Metrics & Targets" section of your SB 261 report, ensuring a cohesive strategy with perfectly aligned data.
Regulation
SB 261
Climate-Related Financial Risk Act
SB 253
Climate Corporate Data Accountability Act
Status
Enforcement paused
Active
Applies to
Organizations with $500m+ revenue operating in California*
Organizations with $1b+ revenue operating in California*
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