The California Air Resources Board has approved a climate transparency regulation that will require large companies doing business in the state, including major fleet operators, to publicly disclose greenhouse gas emissions and climate-related financial risks under two state laws.
The regulation implements the Climate Corporate Data Accountability Act (SB 253) and the Climate-Related Financial Risk Act (SB 261), both enacted in 2023 and amended in 2024. Together, the laws establish reporting requirements for large U.S.-based entities operating in California based on annual revenue thresholds.
For fleet operators with more than $1 billion in annual revenue that do business in California, SB 253 requires annual reporting of Scope 1 and Scope 2 GHG emissions beginning in 2026. Scope 3 emissions reporting will begin in 2027. CARB set August 10, 2026, as the first-year reporting deadline for Scope 1 and Scope 2 emissions.
For fleet operators with more than $500 million in annual revenue that do business in California, SB 261 requires a biennial climate-related financial risk report describing climate-related risks and measures adopted to reduce and adapt to those risks.
The newly adopted regulation establishes the fee structure to fund program administration, clarifies key definitions, and confirms that revenue thresholds will be based on gross receipts as reported to the California Franchise Tax Board.
CARB indicated it will support compliance through stakeholder engagement and will exercise enforcement discretion for good-faith first-year submissions under SB 253.
More than 120 voluntary climate-related financial risk reports have already been submitted through CARB’s public docket by private and public entities across sectors including manufacturing, energy, transportation, finance, and technology.
Certain entities are exempt from reporting requirements, including tax-exempt nonprofits and charities, government entities or majority government-owned entities, and businesses regulated by the Department of Insurance or insurance regulators in other states. A court order currently affects enforcement of SB 261, making reporting under that statute voluntary at this time.
While the regulation does not establish new vehicle standards or operational mandates, it creates formal emissions and climate risk disclosure requirements for qualifying companies doing business in California, including large fleet operators.
