California has officially named over 4,000 companies that will soon be required to comply with the state’s landmark climate disclosure laws, setting a new precedent for corporate environmental accountability in the U.S. The preliminary list, released by the California Air Resources Board (CARB), includes around 4,160 companies, many of which are headquartered outside the state but conduct business within California.

This disclosure mandate is driven by two pieces of legislation: SB 253 and SB 261. SB 253 targets companies with over $1 billion in annual revenue, requiring them to report their Scope 1 and Scope 2 greenhouse gas emissions beginning in 2026, followed by Scope 3 emissions in 2027. SB 261 applies to companies earning more than $500 million, mandating public disclosures of climate-related financial risks and mitigation strategies, with the first reports due by January 1, 2026.

Although the published list is not final, it offers a clear indication of the scale and scope of California’s regulatory ambition. The state is setting a tight timeline for compliance, giving companies limited time to build data infrastructure, analyze climate risks, and integrate reporting into their business operations.

This move positions California at the forefront of ESG enforcement, especially as federal climate disclosure regulations remain uncertain. By requiring transparency from both in-state and out-of-state companies, the state is effectively setting a national benchmark for climate accountability. Businesses that operate in California, regardless of their headquarters, must now prepare to meet rigorous reporting standards or risk non-compliance.

For corporate leaders, this is more than a regulatory hurdle; it’s a wake-up call. The new rules demand robust emissions tracking, climate risk assessments, and clear governance strategies. Companies must act quickly to align internal processes with these requirements or face reputational and legal consequences.

California’s bold step signals a broader shift: ESG disclosure is no longer a niche concern; it’s becoming a central pillar of doing business in a low-carbon economy.

Source:

https://esgnews.com/california-names-4000-companies-facing-mandatory-climate-disclosures/