Hurry Up and Wait: CARB Pushes Initial Rulemaking on SB 253 and SB 261 Until Q1 2026

In the meantime, CARB encourages continued feedback on the various resources it has made available since its August 2025 public workshop, until the public docket closes on October 27, 2025. Such resources include CARB’s Draft Scope 1 and 2 GHG Reporting Template (“Template”) (made available on October 10, 2025), and the accompanying memo containing guidance on using the Template under the Corporate Greenhouse Gas Reporting Program.

Prior CARB Actions Related to Climate Disclosure Laws

CARB is responsible for developing and adopting regulations to implement both SB 253 and SB 261. On July 9, 2025, CARB made available its “FAQs Regarding California Climate Disclosure Requirements” explaining its regulatory development process and providing information related to the submittal of initial reports under SB 261. Shortly thereafter, CARB posted both a “Climate Related Financial Risk Report Checklist” and a “Preliminary List of Reporting/Covered Entities” to its website. Most recently, and as noted above, CARB made available its Template and accompanying memo.

CARB’s Notice does not provide a specific date for when CARB expects to issue its proposed rulemaking, leaving this to a more open timeframe during Q1 2026, or anywhere between January and the end of March.

Draft Scope 1 and 2 GHG Reporting Template and Memo

SB 253 requires that, annually starting in 2026, a covered entity¹ must publicly disclose its Scope 1 and Scope 2 GHG emissions for the prior fiscal year. Beginning in 2027 and annually thereafter, a covered entity will be required to publicly disclose its Scope 3 GHG emissions for the prior fiscal year.

CARB’s Template is intended to streamline reporting, although using the Template is entirely voluntary for the 2026 reporting cycle. The Template is organized into eight sections (organizational information, third-party verification, inventory boundary, Scope 1 and Scope 2 disclosure, methodology, de minimis/minor sources, California Mandatory Reporting Regulation fields (if applicable), and emission reductions (if applicable)) as well as optional sections for future reporting years. Such optional sections include base year emissions which, per CARB, will help “support intraorganizational comparison, providing more transparency to investors and stakeholders.”

As noted above, CARB is seeking stakeholder feedback on the Template and is particularly focused on three elements: (1) disclosure by source versus disclosure by gas type, (2) evaluation of limiting the approach to identifying organizational boundaries (equity share, financial control, or operational control), and (3) inclusion of emissions reductions actions and targets beyond direct contracts for renewable electricity and renewable gas.

In the memo, CARB advises that it will provide guidance on later reporting cycles as part of the regulatory process.

What Now?

CARB’s Notice does not provide any information as to whether the compliance deadline for SB 261 reporting (currently January 1, 2026) has been moved in light of pushing back the initial rulemaking to the first quarter of 2026. Until any additional information is published by CARB with respect to such deadlines, companies should proceed on the basis that the January 1, 2026, deadline remains in place and continue to prepare their SB 261-compliant reports. Note, however, that in December 2024, CARB issued an Enforcement Notice advising that it would exercise some enforcement discretion with respect to Scope 1 and 2 GHG emissions data in a covered entity’s initial SB 261-compliant report; namely, that such an entity could use existing data that the entity already possessed or was in the process of collecting at the time of the Enforcement Notice. CARB has not published anything to the contrary, so covered entities may proceed on the basis that, alongside the various resources CARB has made available, there will likely be some discretion with respect to initial reports.

If you anticipate being required to report under these laws, including SB 261, have questions on compliance or deadlines, or would like to share feedback with CARB regarding the ongoing regulatory developments, please contact your V&E team to discuss next steps.

We will continue monitoring developments regarding climate-related disclosure laws. Please reach out to your Vinson & Elkins team to discuss these matters and their implications for your business.

¹ Covered entities are defined as those “doing business” in California and with a total annual revenue of more than $1 billion. The “doing business” definition is a key vague term that remains unclarified. Potential reporters hope that CARB rulemaking on both the California Climate Laws will clarify this term.