By the SEMA Washington, D.C., office
California's Air Resources Board (CARB) announced last week that it will delay enforcement of its climate reporting requirements for 2026, providing relief to businesses navigating the state's SEMA-opposed Climate Accountability Package.
The Climate Accountability Package, passed in 2023, includes SB 253 and SB 261, which set reporting requirements for large companies doing business in California. SB 253 applies to companies with over $1 billion in annual revenue and mandates public reporting of Scope 1 and 2 greenhouse gas (GHG) emissions starting in 2026, with Scope 3 reporting beginning in 2027. These reports aim to create transparency regarding direct and indirect emissions from companies' operations.
SB 261 requires companies with annual revenue exceeding $500 million to file biennial reports assessing their climate-related financial risks. These disclosures must align with standards set by the Task Force on Climate-Related Financial Disclosures and are intended to provide stakeholders insight into how businesses address and manage climate risks.
California Gov. Gavin Newsom initially expressed doubts about meeting these deadlines and signed SB 219 in 2024, extending CARB's timeline to finalize reporting standards to July 1, 2025. Despite this, the 2026 reporting requirement remained intact.
CARB's recent notice allows companies to report FY 2025 emissions using existing processes as of December 5, 2024, without facing penalties for incomplete data, provided they demonstrate good faith compliance.
SEMA joined the business community in opposing these mandates in 2023, citing their burden on businesses and rushed timelines. This enforcement delay offers companies more time to document practices and prepare for clearer guidance next year.
SEMA will continue to engage this issue and advocate for practical solutions to support its members.
For more information, contact Christian Robinson at christianr@sema.org.