California’s Climate Mandate: What Businesses Must Do Now to Stay Ahead
- Earthara
- Jul 15
- 3 min read
California has jumped ahead on climate accountability. With SB 253 and SB 261 rolling out, sustainability is no longer a “nice to have”, it’s essential for every company doing business in the state. At Earthara we believe this is a game-changer, and we are here to help businesses understand and act. For more information and timelines, see our article "California's Climate Accountability Laws: SB 253 and SB 261 Explained".
Two major pieces of legislation are leading the change: SB 253 and SB 261. These climate laws require companies doing business in California to publicly disclose their greenhouse gas emissions and climate-related financial risks. These rules apply even if your company is not based in California, as long as you generate revenue within the state. Companies subject to the law must begin preparing to comply with assurance requirements and data gathering now to avoid costly delays.
Who Must Comply and Why It Matters to You
Even companies outside California must pay attention if they have revenue, offices, employees, or operations in the state. The California Air Resources Board (CARB) defines this broadly, so many companies will fall under the laws.
Even smaller firms will be called upon by larger clients for Scope 3 data. That means you’ll need systems in place and need them fast.
Compliance Is Just the Starting Line: What’s Really Driving Business Change
California’s climate laws are about more than checking boxes. They reflect a broader shift in what regulators, customers, and investors expect from businesses. Here’s what’s truly driving the change:
Rising Customer and Buyer Expectations
Large buyers now need accurate emissions data from their suppliers in order to meet their own disclosure requirements. If your company cannot provide verified data, you risk losing contracts and long-term partnerships.
Financial Risk from Climate Events
Wildfires, drought, or extreme heat are not just environmental events, they are business disruptions. SB 261 urges companies to assess how climate-related risks could affect operations, and to publicly share how they plan to manage them.
Demand for Stakeholder Transparency
Investors, customers, and employees increasingly expect climate-related data to be disclosed clearly and consistently. A lack of transparency can damage trust, weaken your brand, and result in lost opportunities.
Why Acting Now Pays Off
California’s new climate laws signal a shift from voluntary pledges to mandatory action. Companies that prepare now will be better positioned for what’s ahead. Acting early helps you:
Avoid compliance costs and penalties
Strengthen your standing in procurement and investment decisions
Enhance reputation and build trust with customers, investors, and employees
As Workiva notes, over 5,300 companies are impacted by SB 253 and more than 10,000 fall under SB 261. You’re likely either directly affected or part of a supply chain that is.
How Earthara Helps You Get Ahead
At Earthara, we work with organizations of all sizes to build climate strategies that are clear, credible, and future-ready. Whether you’re reporting for the first time or scaling an existing program, we can support you through every stage.
Our typical process includes:
A free consultation to learn more about your sustainability goals, reporting obligations, and where we can add the most value.
A guided kickoff session where we walk through the Task Force on Climate-Related Financial Disclosures (TCFD) framework, used for SB 261 compliance. This framework includes four key focus areas: governance, strategy, risk management, and metrics and targets.
Information gathering through a structured questionnaire or executive interview to better understand how your company manages climate-related risks and opportunities across each of the TCFD categories.
Drafting and review of your climate risk disclosure report, including detailed analysis and narrative. We’ll ensure the content meets the requirements of SB 261 while aligning with your company’s unique context.
Final publishing support, so your report is ready for public release on your company website, just as the regulation requires.
If you are unsure where to begin or just want to talk through your next step, reach out to us for a free consultation. No pressure, just guidance from a team who knows the landscape.
