California sets deadline for corporate climate disclosure rule

There’s a new date to circle on your CFO calendar: August 10. That’s the official deadline for the largest companies doing business in California to file their first greenhouse gas emissions reports under the state’s new climate disclosure laws.

The California Air Resources Board (CARB) locked in the date after voting in the approved regulations on February 26. Under SB 253, any company pulling in more than $1 billion in annual revenue and doing business in California must disclose its Scope 1 and 2 emissions. Scope 1 emissions are released by the direct actions of a company. Scope 2 includes the emissions from any energy a company buys. Scope 3 emissions disclosures, from a company’s supply chain, won’t kick in until 2027.

The August 10 deadline was expected, according to Miranda Mair, the manager for carbon advising at Engie Impact. CARB pushed it back from an originally proposed June deadline. But it will creep up on companies quickly, Mair said, especially when CFOs need to factor in four to six weeks for verification.

The regulations clarified the term “doing business in California” to align with the California Revenue and Taxation Code. According to the code, it means “actively engaging in any transaction for the purpose of financial or pecuniary gain or profit.”

Today, the first question CFOs need to answer, according to PwC sustainability partner Brigham McNaughton, is “Are you in scope?”

But that might be harder to determine than it seems, as “the revenue thresholds sound simple, but subsidiary and consolidation questions can get complicated quickly. Once that’s confirmed, CFOs need to know where their emissions data lives, who owns it, and whether the numbers would hold up to scrutiny,” McNaughton wrote to CFO Brew.

As the most populous state in the US, with the fourth-largest GDP in the world, ahead of Japan and India, California’s climate rules will impact many businesses. CARB issued a list of more than 4,000 companies that will be required to report, including Abercrombie, DraftKings, and Nvidia. Many aren’t headquartered in California.

“It’s going to catch a lot more people by surprise,” Mair told CFO Brew, “if they think ‘Oh, we don't really have much of a California presence.’”

California’s sister climate law, SB 261, compels companies with $500 million in revenue to disclose climate-related financial risks. However, that law has been at a standstill since a US appeals court issued an injunction last November.

In a separate case, Exxon Mobil sued the state in October 2025, arguing both rules violate the company’s free speech rights, forcing it to “serve as a mouthpiece for ideas with which it disagrees.”

For now, disclosing those risks are voluntary, but according to the CARB, it has already received 120 climate-related financial risk reports.

“Voluntary reporters are in a better position than most, but good position doesn’t mean done,” McNaughton wrote. “CARB’s checklist is specific—board oversight structures, management accountability, forward-looking risk narratives—and, in my experience, most voluntary reports have gaps in at least one of those areas.”