The California Air Resources Board (CARB) has released a new publication of frequently asked questions (FAQ) to update businesses on its regulatory development process and provide guidance for companies preparing to submit their first climate-related financial risk reports by the January 1, 2026 deadline. The regulations include the “Climate Corporate Data Accountability Act” and the “Climate-Related Financial Risk Act,” codified as Health and Safety Code Section 38532 and Section 38533, respectively.
These regulations apply to companies conducting business in California, introducing climate reporting obligations for most large U.S. businesses. The Climate Corporate Data Accountability Act requires companies with revenues exceeding $1 billion to report annually on emissions across Scopes 1, 2, and 3. Meanwhile, the Climate-Related Financial Risk Act mandates companies with revenues over $500 million to disclose climate-related financial risks and measures to address them.
CARB’s FAQ clarifies reporting dates, confirmed in a recent public workshop. While the exact date for Scope 1 and 2 reporting is pending, disclosures will commence in 2026, covering the previous fiscal year. Scope 3 emissions reporting will begin in 2027. The FAQ reiterates CARB’s December 2024 decision permitting the initial 2026 Scope 1 and 2 report to use existing data, allowing more time for new data collection processes.
The FAQ also outlines the timeline for obtaining independent third-party assurance for greenhouse gas emissions disclosures. Limited assurance-level verification for Scope 1 and 2 emissions starts in 2026, with reasonable-level assurance beginning in 2030.
For companies subject to Climate-related Financial Risk Reporting, the first reports are due by January 1, 2026, with biennial reporting thereafter. The FAQ advises on report content, focusing on material risk based on potential harm to financial outcomes from physical and transition risks. These risks may impact corporate operations, supply chains, employee health, investments, shareholder value, and economic health.
For more details, access the [CARB FAQ](https://ww2.arb.ca.gov/sites/default/files/2025-07/FAQs%20Regarding%20California%20Climate%20Disclosure%20Requirements.pdf) on the upcoming climate reporting regulations.
