California’s climate disclosure laws explained

How to prepare for California’s Climate Disclosure laws 

Educate your team and identify stakeholders 

Compliance with SB 253 and SB 261 requires cooperation from a cross-functional team. Relevant data sources will be spread across your company in various departments. You’ll need to assign compliance leads in operations, finance, sustainability, and legal to cover all your bases.  

From there, you’ll need a learning program to educate these compliance leaders on all aspects of each legislation. Since compliance with SB 253 and SB 261 is a group-wide effort, these compliance leaders must work closely to define roles, responsibilities, and workflow.  

Create a data management plan for carbon emissions data

Companies will have different data-gathering requirements to comply with SB 253 and SB 261. No company or industry’s emissions are alike. The first task will be identifying emissions sources and establishing tracking mechanisms. Then, companies must develop a workflow to streamline data collection across the organization, including timelines, submission requirements, and data preparation standards.  

Data tracking should include but isn’t limited to GHG emissions. These include: 

• Scope 1: fuel consumption, fugitive emissions, and on-site combustion
• Scope 2: electricity consumption, heating, cooling, and purchased steam 
• Scope 3: upstream transportation, raw material production, waste disposal, employee commuting, and product distribution 

Build out your tech stack 

If you haven’t implemented an ESG solution into your enterprise technology stack, now is the time. ESG laws, like SB 253 and SB 261, are the first of many that will impact public disclosure around the world. Mandatory ESG reporting is just a matter of time. And as ESG data requirements continue to intensify, we expect regulators and governments to demand increasingly granular ESG disclosure and analysis. 

It’s not enough to keep tabs on a few ESG KPIs. As ESG disclosure embeds itself into law, companies must prioritize understanding 1. how ESG initiatives correlate to performance outcomes, materially, operationally, and across supply chains 2. how operations impact ESG factors externally, like the effects to the environment and community. We recommend prioritizing a holistic understanding of ESG by taking a corporate performance management (CPM) approach to compliance.  

CPM prioritizes a comprehensive understanding of enterprise data, bringing finance and operations data together in a single platform. By putting ESG under the CPM umbrella, you’ll see how ESG performance intersects with financial outcomes and operational and supply chain plans. This way, teams can understand how carbon emissions impact a company’s materiality and track progress using the same governance and controls as they do for sensitive financial disclosure data.  

Start preparing carbon emissions data today 

2026 will be here before we know it. The time to start preparing your data, processes, and people for California’s climate disclosure laws is now. Taking a corporate performance management approach to SB 253 and SB 261 will ensure your carbon emissions data is ready for imminent carbon accounting requirements— and all future ESG reporting requirements.  

CCH Tagetik ESG and Sustainability Performance Management solution has a new module that covers California Climate Corporate Data Accountability. This module helps you accurately calculate and report according to the regulation and prepare for mandated assurance with confidence. It includes: 

• A pre-built KPI library 
• Related calculation logic aligned with regulatory requirements 
• An automatic audit trail 
• GenAI-assisted narrative to expedite and enhance reporting  

Learn more about CCH Tagetik for ESG and Sustainability Performance Management.