Why California’s New Climate Reporting Laws Matter: SB 253, SB 261, and SB 252

California is once again leading the country—this time by turning climate goals into enforceable laws. With Senate Bills 253, 261, and 252, the state has taken a major step in holding businesses accountable for their climate risks and emissions. These new laws aren’t just about regulation—they mark a broader shift in how we measure, report, and respond to climate responsibility.

What Prompted These New Laws?

These requirements come after years of political debate, stakeholder input, and economic study. Lawmakers have worked on this framework for nearly a decade. Behind it is growing pressure from environmental groups, investors, and regulators who agree on one thing: voluntary climate reporting isn’t enough anymore. As climate change drives more financial risk, especially for large companies, the public deserves a clear picture of each company's role in—and response to—the crisis.

What the Laws Require

SB 253: The Climate Corporate Data Accountability Act


This law requires large companies doing business in California to report their greenhouse gas emissions. That includes not only direct emissions, but also indirect emissions from their entire value chain—the often-overlooked and hardest to measure. Reporting starts in 2026 and 2027 and must be verified by independent third parties. California is making it clear: climate data is as serious as financial data.

SB 261: Climate Risk Disclosure

This law goes further. It requires large businesses to disclose how climate change affects their assets, operations, and long-term strategy—and what steps they’re taking in response. Disclosures must follow well-established international standards, like the Task Force on Climate-Related Financial Disclosures (TCFD), signaling California’s alignment with global best practices.

SB 252: Fossil Fuel Divestment by Public Pensions

This bill targets public investment rather than private companies. It directs CalPERS and CalSTRS—California’s major pension funds—to divest from fossil fuel holdings by 2030. While it doesn’t impose new rules on businesses, it shows where public investment is heading: away from carbon-heavy industries and toward climate-aligned strategies.

What This Means for Businesses

These laws will reshape the business landscape in California and beyond. For companies already focused on sustainability, they help level the playing field by forcing competitors to report the same information. Smaller businesses, though not directly covered, may also feel the ripple effect as larger companies start asking for emissions data from their suppliers. That could open up tools and resources once limited to large corporations.

But for big businesses that fall under these laws, the workload is real. Tracking indirect emissions—also known as Scope 3—is complex and sometimes imprecise. Many companies will need to upgrade systems, hire consultants, and rethink how they manage climate-related information. Critics argue that the rules could create more paperwork than progress. Still, California’s position is firm: climate risk is financial risk, and large businesses must show how they’re managing both.

What Comes Next

At the federal level, progress has been slower. The SEC has proposed climate disclosure rules, but they remain in limbo due to political gridlock. If that continues, California’s rules could become the default national standard, especially for companies that operate across multiple states.

For covered companies, the deadlines may seem distant—first reports aren’t due until 2026—but many have already started preparing. They’re upgrading systems, evaluating risks, and lining up third-party verifiers. Yet gaps remain—especially in Scope 3 data and integrating climate risk into financial planning.

Businesses that wait risk falling behind—not just in compliance, but in credibility. These laws signal a new expectation: companies must understand and disclose their climate risks, not just for regulators, but for investors and customers. This isn’t about checking boxes—it’s about staying competitive in a rapidly changing world.