California advances climate disclosure regulations
The regulation, originally proposed in December 2025, establishes the initial framework for greenhouse gas reporting requirements.
Insurance sector review
CARB adopted the regulation largely as proposed but directed staff to coordinate with the California Department of Insurance to determine whether insurance companies already disclose emissions data consistent with SB 253 through existing reporting requirements.
If those disclosures do not currently satisfy SB 253 requirements, insurers may be required to report emissions data directly under the regulation. Any proposed changes resulting from this review would be released for public comment.
SB 253 reporting timeline
Companies subject to SB 253 must report initial Scope 1 and Scope 2 greenhouse gas emissions by Aug. 10, 2026.
CARB also indicated that additional rulemaking is expected later this year to address:
- Reporting requirements beginning in 2027 and beyond
- Scope 3 emissions disclosures
- Third-party assurance requirements
SB 261 remains on pause
Implementation of SB 261 is currently paused due to litigation. In November 2025, the United States Court of Appeals for the Ninth Circuit issued an injunction preventing CARB from enforcing the law during the appeal process.
While the lawsuit also challenges SB 253, the injunction does not impact SB 253’s reporting obligations, which remain in effect.
CARB has also confirmed that the Jan. 1, 2026, compliance deadline previously associated with SB 261 is no longer applicable, though companies may voluntarily submit reports through a public docket while the regulatory framework continues to evolve.
California may have started a trend as we now see New York introducing a mandatory GHG Reporting Program.
New GHG reporting requirement in New York
The New York State Department of Environmental Conservation adopted the GHG Reporting Program, requiring certain emitters and suppliers operating in or selling covered products into New York to report emissions annually.
The reporting program applies to:
- Facilities emitting 10,000 metric tons or more of CO₂-equivalent emissions annually
- Certain fuel suppliers
- Electric power entities
- Waste haulers and waste sector operations, regardless of emissions quantity
Entities that exceed higher thresholds will be classified as large emission sources and must comply with additional monitoring plan requirements and third-party verification obligations.
GHG Reporting Program timeline
Initial emissions reports covering calendar year 2026 must be submitted by June 1, 2027.
Monitoring plans and verification requirements begin in 2026, and violations may result in civil penalties under New York’s Environmental Conservation Law, including per-day penalties up to $15,000 for continued noncompliance.
EU Omnibus package reshapes sustainability regulations
Across the Atlantic, policymakers in the European Union are moving to simplify key sustainability regulations through the recently approved Omnibus 1 Directive, which revises implementation of the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD).
While the original CSRD framework already applied to large companies, the Omnibus package introduces new thresholds that significantly reduce the number of companies subject to reporting requirements.
Changes to CSRD
The agreement retains the 1,000-employee threshold, but introduces an additional financial threshold excluding companies with less than €450 million in annual revenue.
As a result, it is estimated that approximately 90% of companies previously expected to fall under the regulation will now be excluded from CSRD sustainability reporting requirements.
Significant revisions to the CSDDD
The revisions to the CSDDD raises the applicability threshold to 5,000 employees and €1.5 billion in annual revenue, significantly reducing the number of companies covered.
Additional changes include:
- Removal of the requirement for companies to prepare climate transition plans
- Elimination of the regulation’s EU-wide liability regime
- Introduction of a maximum penalty cap of 3% of global revenues
- A one-year delay to implementation, with compliance now required by July 2029
Supply chain reporting adjustments
The Omnibus package also introduces changes aimed at reducing reporting burdens across value chains.
Companies subject to the regulations will face limits on the information they can request from smaller supply-chain partners. Businesses with fewer than 1,000 employees may decline to provide information beyond that is required under the Voluntary Sustainability Reporting Standard for SMEs (VSME).
Organizations conducting due diligence under the CSDDD are also encouraged to rely primarily on reasonably available information, rather than systematically requesting detailed reporting from smaller suppliers.
Omnibus 1 Directive implementation timeline
The Council of the European Union recently approved the Omnibus 1 Directive. The directive became effective on March 18, 20 days after publication in the EU’s Official Journal.
Member states will then have one year to transpose the directive into national law, with the EU-wide harmonized due diligence baseline carrying a later compliance deadline of July 2028.
How to prepare for a complex climate disclosure environment
As climate disclosure frameworks continue to expand and evolve across jurisdictions, organizations face an increasingly dynamic regulatory landscape. Companies operating in or selling products into New York should assess whether they fall within the scope of the state’s new GHG reporting program, while organizations subject to SB 253 in California should begin preparing for emissions reporting ahead of the August 2026 deadline.
Multinational companies should also monitor developments in the European Union as the Omnibus Directive reshapes sustainability reporting and due diligence obligations.
As these frameworks continue to evolve, companies that invest early in scalable emissions data management, governance processes and strategic reporting processes will be better positioned to navigate emerging disclosure expectations.
How Toppan Merrill can help
At Toppan Merrill, we continue to monitor global regulatory developments and help organizations navigate complex disclosure requirements with confidence. Our advisors are available to discuss your needs and ensure your external messaging is financially relevant, consistent , and meets your broader responsibilities to safeguard your business, stakeholders, and comply with applicable laws. Contact us at [email protected] or by calling 800.688.4400.
