Navigating California’s Landmark Climate Legislation with GNFZ Certification
Beginning on January 1, 2026, upwards of 10,000 public and private corporations doing business in the State of California will have to begin publicly disclosing their Scope 1 and Scope 2 emissions and file biennial climate-related financial risk reports to be in compliance with California’s landmark Climate Corporate Data Accountability Act (SB 253) and the Climate Related Financial Risk Act (SB 261). SB 253 targets business entities with revenues exceeding $1 billion and SB 261 targets business entities with revenues exceeding $500 million. Companies will also have to start reporting on Scope 3 emissions in 2027.
It is important to note that doing business in California is defined as companies actively engaging in any transaction for the purpose of financial gain or profit within California, regardless of whether the company is physically located in the state. And since California is the fifth largest economy in the world, these laws will impact thousands of companies across the U.S. and non-U.S. companies as well.
To assure compliance with the 2026 reporting deadline, affected companies must start collecting accurate Scope 1 and Scope 2 data in 2025. Companies are required to submit data that have been verified by an independent third party and in conformance with the Greenhouse Gas (GHG) Protocol standards. The GHG Protocol was developed by the World Resources Institute and the World Business Council for Sustainable Business Development and is a widely respected global framework for measuring and managing emissions from private and public sector operations, value chains, products, cities and policies. It is currently used by 92% of Fortune 500 companies in their GHG accounting.
GHG emissions data will be published on a digital platform (to be developed by the state board’s contracted emissions reporting organization) featuring individual reporting entity disclosures as well as allowing stakeholders to view aggregated data in a variety of ways, including over multiple years.
The new laws are more encompassing than the proposed rules issued by the U.S. Securities and Exchange Commission (SEC) in March 2022 that would require domestic and foreign registrants to include extensive climate-related disclosures in their registration statements and periodic reports.
California joins other jurisdictions in introducing disclosures regarding GHG emissions – notably the EU. In the EU, the requirements go considerably further, covering a climate transition plan as well as other sustainability topics.
It is important to note that while companies are required to collect data on Scope 1 and 2 emissions in January of 2025, that the California Air Resources Board (CARB) has until July of 2025 to define what companies must disclose.
How GNFZ Can Help
GNFZ stands ready to help companies doing business in California meet the requirements of both the Climate Corporate Data Accountability Act and the Climate Financial Risk Act.
As the premier independent, third-party net-zero certification body for buildings, portfolios and businesses, GNFZ offers a comprehensive net zero certification based on the internationally recognized (and California mandated) GHG Protocol with a respected network comprising deep technical backgrounds in business decarbonization, building operations, carbon, LEED and other green building certification systems, and California market specific protocols.
GNFZ has provided net zero certification to some of the highest-performing buildings in the world in some of the most carbon-intensive industries — helping our clients benchmark and achieve their net zero goals ahead of timelines with affordable, tailored and incremental plans that achieve results. Our platform works for business entities as a whole and multiple building sectors including new construction, existing buildings, manufacturing, residential, hospitality, retail, transportation, healthcare and more.
GNFZ’s platform and certification is tailored for success. Our program:
Helps clients achieve net zero certification, enabling them to increase their marketability, improve operational efficiencies, identify value creation opportunities, realize cost savings, achieve market differentiation and meet regulatory compliance.
Calculates and assesses Scope 1, 2 and 3 emissions using widely accepted and trusted methodologies, and helps clients create a roadmap to reduce and eliminate these emissions across four primary categories: Energy, Emissions, Water and Waste.
Provides an incremental approach that enables any business endeavoring to reduce their emissions to get started quickly — and creates a trusted roadmap to get to zero. Our process allows businesses to focus on actual strategies that reduce emissions, optimize financial and time investments, and hit targets faster.
Works with clients to provide trusted guidance and support to greatly reduce reporting risks and demonstrate sustainability leadership within state-regulated compliance.
Interested in learning more? Contact our team to discuss how GNFZ can help your business navigate California’s climate legislation.