New California Climate Bills 253 & 261: What They Mean, How to Prepare, and the Role of Digital Solutions
Overview
California’s new climate laws, SB 253 and SB 261, introduce mandatory emissions and climate risk disclosures for thousands of large companies. This article breaks down what the laws require, practical steps for compliance, and how digital tools can streamline carbon accounting and sustainability reporting. It also outlines key features to look for when selecting a solution that’s built to scale with evolving ESG regulations.
Join us for our upcoming webinar on this topic or sing-up to get the recording here: https://www.sustaira.com/events/webinar-california-climate-bills
Reach out for a demo directly here: https://www.sustaira.com/request-a-demo
California is raising the bar on corporate climate accountability. Are you ready?
If you're in sustainability or IT, you've probably heard about California Senate Bills 253 and 261. They’re not just headline news—they’re a turning point for corporate climate disclosure in the U.S.
These new laws introduce mandatory carbon emissions and climate risk reporting for thousands of companies. Whether you’re already deep into ESG or just starting to formalize your strategy, these bills mean one thing: it’s time to get serious about your carbon data, reporting tools, and compliance roadmap.
Let’s break down what these bills actually require, how your organization can prepare, and what to look for in digital solutions to help you stay ahead of the curve.
What Are SB 253 & SB 261?
California’s two new climate laws—signed into effect in 2023—are aimed at making corporate climate data transparent, comparable, and actionable.
Senate Bill 253: Climate Corporate Data Accountability Act
Who it applies to: Companies doing business in California with over $1 billion in annual revenue.
What it requires: Annual public disclosure of greenhouse gas (GHG) emissions, including Scope 1, Scope 2, and—critically—Scope 3 emissions (value chain).
When it starts:
Scope 1 & 2 reporting begins in 2026 (for 2025 data)
Scope 3 reporting begins in 2027
Senate Bill 261: Climate-Related Financial Risk Disclosure
Who it applies to: Companies with over $500 million in annual revenue doing business in CA.
What it requires: A biennial report detailing climate-related financial risks and the measures taken to mitigate them.
Framework: Must align with the TCFD (Task Force on Climate-Related Financial Disclosures).
Why These Bills Matter (Even If You're Not in California)
California is the world’s fifth-largest economy. If you’re a large company operating there—even indirectly—this legislation likely applies to you.
More importantly, this signals a national and global shift. These bills are aligned with global standards like CDP, CSRD, SEC climate rule proposals, and GHG Protocol. If you’re building a compliance roadmap, this is the baseline.
Practical Steps to Comply
Compliance isn’t just about checking a box. It's about building reliable systems and processes to support accurate, audit-ready sustainability reporting.
Here’s a practical starting point:
1. Map Your Emissions Sources
Understand where your emissions come from:
Scope 1: Direct emissions from owned or controlled sources
Scope 2: Indirect emissions from purchased electricity, steam, heat, cooling
Scope 3: All other indirect emissions—supply chain, travel, waste, use of sold products
2. Identify Data Owners & Gaps
Work cross-functionally with operations, finance, procurement, IT, and HR to find where the data lives—and where it’s missing.
3. Select a Reporting Framework
Most companies align with GHG Protocol, CDP, and TCFD—the same ones referenced in SB 253 and SB 261.
4. Get Ready for Assurance
SB 253 requires third-party assurance starting in 2026 (limited) and 2030 (reasonable). Your data must be verifiable.
5. Implement the Right Tools
Manual tracking in spreadsheets won’t cut it. You’ll need a digital platform that scales with you.
Choosing the Right Digital Sustainability Platform
Once the “what” and “why” are clear, the next question is: how do we actually do this at scale? That’s where digital platforms come in—especially those designed for carbon accounting, sustainability data management, and reporting automation.
Here’s what to look for:
✅ End-to-End Carbon Accounting
From Scope 1 to Scope 3, your platform should support automated data collection, emission factor application, and dashboards that are audit-ready.
✅ Customizable Frameworks
Look for platforms that support CDP, GHG Protocol, TCFD, CSRD, and others—ideally out-of-the-box, with room to configure for your specific needs.
✅ Data Integration Capabilities
Can it connect to your ERP, utility data, procurement platforms, HR systems, etc.? Integration is key for automating data ingestion.
✅ Collaboration & Workflow Features
Sustainability is cross-functional. Your software should enable task assignments, approvals, and version control.
✅ Audit-Ready Reporting
SB 253 requires third-party assurance. Your tool must support transparency, documentation, and evidence linking.
✅ Modular & Scalable
Your needs will evolve. Choose a platform that grows with you—from early-stage maturity to full ESG integration.
How Sustaira Can Help
At Sustaira, we help companies like yours simplify the complex. Our modular sustainability platform enables:
Carbon accounting aligned with GHG Protocol
Scope 3 supplier engagement and data collection
TCFD and CSRD-aligned reporting
Integration with your existing IT ecosystem
Full traceability and audit support
We're not just another ESG tool—we're a customizable, scalable solution built with IT and sustainability leaders in mind.
Let’s Keep the Conversation Going
📅 Join our upcoming webinar:
Want to dive deeper into SB 253 and SB 261 with live Q&A and expert insights? Sign up here
📞 Book a demo with Sustaira:
See how our digital platform can help your organization meet its new regulatory requirements—and go beyond compliance.
