SB 253 and SB 261: Preparing for Climate Disclosures
New regulations shift climate-related disclosures from optional to required.
You’ve likely been hearing about California’s SB 253 and SB 261, which mark a significant change in climate-related disclosure requirements. With the passage of SB 253 and SB 261—two landmark laws that move climate-related disclosures from voluntary to mandatory– California is setting a new standard for corporate climate accountability, with the first SB 261 reports due January 1, 2026.
For companies in the produce industry, these regulations represent more than just new reporting requirements; they mark a shift toward greater transparency and long-term sustainability planning. Understanding what’s required, who’s affected, and how to prepare is essential to staying compliant and positioning your business as a responsible leader in the evolving sustainability landscape.
In this post, we break down what these new regulations require, who they impact, and how to start preparing.
What are SB 261 and SB 253?
SB 261 - Climate-Related Financial Risk Act
Requires companies to report on climate-related financial risks to their company and how those risks are being managed. Companies can use several reporting frameworks, including the TCFD (Task Force on Climate-related Financial Disclosure) framework. You can learn more about the specific reporting requirement and the other framework options here, from the California Air Resources Board (CARB).
SB 253 - Climate Corporate Data Accountability Act
Requires companies to report their Scope 1 and 2, and eventually Scope 3, greenhouse gas emissions inventories. In 2026, inventories will need to have limited third-party assurance for Scope 1 and 2. CARB recently published a draft of the reporting template for public comment, here.
Who Needs to Report?
SB 261: Companies with over $500 million in total annual revenues that do business in California will need to report on climate-related financial risks.
SB 253: Companies with over $1 billion in total annual revenues and that do business in California will need to report their greenhouse gas emissions.
Not sure if you’re “doing business” in California? You might be, even if you are not headquartered there. Review CARB’s FAQ and other resources for guidance on what counts.
California has also published a Preliminary List of Reporting/Covered Entities as of September 2025. Even if you are not on that list, you may still need to comply. Be sure to review the requirements.
When is Reporting Due?
Reports for SB 261 are due on January 1, 2026. The deadline for SB 253 is still to be finalized, but CARB has proposed June 30, 2026.
What Happens if You Don’t Report?
Companies that should have reported, but do not, may face financial penalties:
SB 261: penalties of up to $50,000 per year
SB 253: penalties of up to $500,000 per year.
Compliance requires investment, but the cost of inaction could be even higher, both financially and reputationally.
What To Do Now
Starting now will help you avoid a last-minute scramble before reporting is due.
Determine if you are subject to these reporting requirements. Consider your company’s revenue and whether you are doing business in California. Still unsure if your company is subject to reporting? Consult your legal team for clarification.
If you do need to report, and you haven’t started yet, now is the time! For SB 261, check out this checklist from CARB that digs into the reporting requirements and frameworks. For SB 253, you’ll also need your completed Scope 1 and 2 inventory and associated third-party assurance by the deadline.
SB 253 and SB 261 underscore a growing reality: climate-related disclosures are no longer optional, and the expectations for corporate accountability are only increasing. While compliance may seem complex, it also offers an opportunity to strengthen your company’s sustainability strategy and demonstrate leadership within the produce industry.
By acting now—clarifying your reporting obligations, gathering the right data, and seeking expert guidance—you can transform these new requirements into a strategic advantage.
Need Support?
At Measure to Improve, we’re here to help you find the answers you need, as well as access the tools, resources, and guidance to get back on track for the reporting deadlines.
As with any reporting requirement, it doesn’t have to be a sunk investment. We have a proven track record of helping companies turn compliance and reporting into opportunities so you can navigate the process with confidence, accuracy, and clarity.
Reach out to us at hello@measuretoimprovellc.com! If you’re a current MTI client, please contact us directly.