California SB 261

California Senate Bill 261, the Climate-Related Financial Risk Act, requires large companies doing business in California to prepare and publish a report on their climate-related financial risk and the measures they have adopted to reduce and adapt to that risk.

The report is expected to follow a recognized framework. The law references disclosure aligned with the TCFD recommendations (or an equivalent successor framework such as the ISSB standards), so the four-pillar climate disclosure structure carries over.

SB 261 applies a lower revenue threshold than SB 253, so it captures a broader set of companies for risk reporting than the emissions-disclosure law captures for emissions. The two California laws are often discussed together because many companies are subject to both.

As with SB 253, the exact thresholds, timing, and any exemptions are defined in the statute and implementing rules and have been subject to change, so practitioners confirm the current requirements against the official source.