"As goes California, so goes the nation" is a popular saying and the domain of environmental policymaking is no exception.
In October 2023, California Governor Gavin Newsom cemented California's status as a climate leader when he ushered in three landmark pieces of legislation: Senate Bill (SB) 253 (the Climate Corporate Data Accountability Act), SB 261 (Greenhouse Gases: Climate-Related Financial Risk), and Assembly Bill (AB) 1305 (Voluntary Carbon Market Disclosures).
While the market waits for a final decision from the Ninth Circuit Court of Appeals, a number of other states have already introduced similar proposed legislation requiring the disclosure of corporate greenhouse gas emissions and climate risks.
California's Climate Accountability Package—including SB 253 and SB 261—has already seen significant revisions and timeline updates. Staying informed on these finalized reporting dates and proactive with current enforcement is a must-do if you want to navigate the road ahead instead of playing catch up.
The U.S. state-level regulatory landscape for corporate climate disclosure is evolving rapidly. With multiple states advancing their own mandates, formal climate reporting is no longer just a European requirement. California’s landmark legislation is already setting the standard for the nation.
|
State |
Regulation |
Disclosure Type |
Threshold |
Reporting Date |
Current Status |
|
California |
SB 253 |
GHG (Scopes 1, 2, 3) |
>$1 Billion |
Aug 10, 2026 |
Enforced: Rules adopted Feb '26. |
|
California |
SB 261 |
Climate Risk (IFRS/TCFD) |
>$500 Million |
TBD |
Enjoined: Enforcement stayed. |
|
New York |
S9072A |
GHG (Scopes 1, 2, 3) |
>$1 Billion |
2028* |
Active: Passed Senate Feb '26. |
|
Illinois |
HB 3673 |
GHG (Scopes 1, 2, 3) |
>$1 Billion |
2027* |
Proposed: Rules pending. |
*Note: This table is not exhaustive of U.S. regulations and is for informational purposes only, not legal advice. It reflects May 2026 requirements; timelines may change due to litigation and pending bills. Consult legal counsel to confirm applicability.
To help your organisation prepare for these shifting standards, we have outlined the core steps required to align with California's key legislative mandates.
With new regulations like California's SB 253, GHG reporting is shifting from a voluntary "nice-to-have" to a business standard. While compliance is the immediate driver, more organisations now recognise the benefits of an accurate carbon footprint. This gives them the confidence to communicate their climate impact transparently to stakeholders, shareholders, and employees. Furthermore, an accurate emissions baseline enables companies to set practical, grounded, and manageable climate initiatives.
A successful GHG accounting process begins with a robust data governance framework. This establishes clear internal structures for data collection and management, identifies responsible stakeholders for each data stream, and forms a dedicated oversight team. As regulations move towards mandatory third-party assurance, robust data governance will streamline future audits, saving significant time and effort.
Many companies still view climate risk as a future concern to be addressed once regulations tighten, technology matures, or markets adjust. This logic is counter-intuitive; by the time a risk is fully understood, the opportunity to manage it effectively may have passed. Failing to prioritise risk mitigation can undermine long-term business resilience and growth. In practice, businesses face two main types of inherently unpredictable climate risk.
Climate hazards—from flooding and wildfires to extreme heat and water stress—can damage assets, disrupt operations, cause supply chain delays, and increase insurance costs. Identifying these vulnerabilities helps companies strengthen resilience and reduce financial impacts. For many, this exposure is already a financial reality: nine out of ten large companies have at least one asset exposed to climate hazards.
The shift to a low-carbon economy reshapes costs, markets, and expectations. Policy changes, carbon pricing, and new technologies affect operating costs, asset values, and investment decisions. Corporate climate exposure is projected to triple by 2050, putting over $1.14 trillion of market value at risk.
Climate risk can no longer be treated as a separate sustainability exercise. It must be embedded across the business, from capital allocation and asset lifecycles to investment decisions. This integration is called transition planning. In practice, this means strengthening resilience by stress-testing strategies against physical and transition-risk scenarios, then translating those insights into mitigation and adaptation actions across an entire value chain.
The commercial case for early action is clear:
We strongly encourage businesses to take these evolving requirements seriously and begin preparing proactively. Waiting for litigation outcomes or final deadlines could leave your company struggling to catch up. Acting now is not about predicting the future perfectly; it is about making informed, risk-managed decisions while strategic options remain available.
Navigating this complex web of state-level requirements can be overwhelming, but you do not have to do it alone. South Pole’s team of climate and policy experts is ready to support you.
From GHG emissions accounting to climate-related financial disclosures aligned with IFRS S2 and TCFD standards, we will help you bridge the gaps and ensure you are prepared for the August 2026 compliance cycle and beyond.
To help you prepare, Greenberg Traurig , LLP and South Pole are hosting a practical 60-minute webinar designed specifically for professionals in legal, compliance, finance and sustainability roles on May 21, 202609am PT / 12pm ET.
Our speakers will break down:
Get the clarity you need to take action with confidence by registering below.
Contact our climate advisory team today to assess your disclosure readiness.
