by Amanda Mast (ClimeCo) & Jessica Penny (Mitiga) | July 1, 2025
As climate disclosure deadlines for California draw closer, companies across sectors are working to prepare with limited time and guidance. Many firms postponed preparations in hopes that additional guidance from the California Air Resources Board (CARB) would help to focus their efforts. Unfortunately, that clarity may not be coming soon. Though the July 1st statutory deadline has passed, CARB’s rulemaking process remains ongoing.
What Does the Delay Mean for Your Compliance Efforts?
Despite the regulatory delay, CARB has indicated the compliance deadlines remain firm. This means disclosures are due as early as January 1, 2026, for climate risk reports and later in 2026 for select emissions disclosures. During the May public workshop and in their July FAQ document, CARB has shared draft concepts, including a definition for “doing business in California.” As 2026 nears, firms will have to leverage available information and take steps to meet requirements despite ambiguity.
Update July 9, 2025: CARB released Frequently Asked Questions document.
Clear Direction from Referenced Standards
Fortunately, Senate Bills 253 and 261, as amended by Senate Bill 219, directly reference established guidance, including the Greenhouse Gas Protocol, the Task Force on Climate-related Financial Disclosures (TCFD), and TCFD successors like the IFRS S2. These standards provide clear direction for companies looking to align their compliance efforts with best practices.
Scenario analysis forms a core requirement of the TCFD framework that may be new to firms developing their first climate risk reports. Unlike near-term risk assessments, a scenario analysis asks companies to look further ahead, considering a range of future scenarios to build resilient business strategies. Our climate intelligence partner, Mitiga, has developed quick tips for firms that are working to catch up on this tricky requirement.
Cracking the Code on Climate Scenario Analysis
TCFD- and IFRS-aligned scenario analysis covers both transition and physical risks, but the physical side is often the most difficult to quantify. The science behind modeling hazards such as heat, wildfire, or flooding is complex and requires expertise in climate science and probabilistic modeling. It is technically demanding and easy to get wrong without the right expertise.
Here are a few tips to meet reporting requirements while generating useful business insights:
1. Assess risk across scenarios and time horizons
SB 261 expects companies to evaluate how their business would perform under different climate scenarios, not just the world as it exists today, but how it may evolve. This includes assessing risks such as flooding, heat stress, and wildfire over time and under varying scenarios. We recommend considering multiple scenarios and time horizons to best align with SB 261.
2. Link physical risk to financial position
Disclosures under IFRS S2 and SB 261 must go beyond identifying where risks exist.
Companies are expected to estimate how physical risks could affect financial position, performance, and cash flows. This is what transforms climate data into actionable business insights that boards and investors can act on.
3. Analyze risk where it matters
Investors and regulators are not looking for generic narratives. They expect clarity about where risk exists and how it evolves. This requires moving beyond regional averages to assess risk at the asset level across the full portfolio.
ClimeCo and Mitiga have partnered to streamline climate risk reporting and help companies prepare more efficiently for California SB 261 and other regulatory requirements.
At the core of this collaboration is EarthScan Disclose, Mitiga’s new product that delivers fast, location-specific physical risk assessments aligned with IFRS S2 scenario analysis.
By combining Mitiga’s climate intelligence with ClimeCo’s reporting expertise, we help clients generate disclosure-ready outputs, reducing manual work and making it easier to meet compliance expectations.
Ready to Take the Next Step?
While California’s climate disclosure landscape is evolving, the direction is clear. Companies can and should make preparations now to be best positioned for compliance. If you are looking for expert guidance to navigate compliance with SB 253, SB 261, or with a scenario analysis, contact us for a consultation.
About the Authors
Amanda Mast is the Director of Sustainability Advisory at ClimeCo, specializing in climate strategy and risk, corporate sustainability, and ESG Disclosure. Previously, she worked on Apple’s Environment, Policy, & Social Initiatives team and with The Coca-Cola Company, supporting global initiatives for environmental sustainability. Amanda offers expertise in climate strategy and risk management, corporate sustainability, and ESG disclosure.
Jessica Penny is the Sustainability Reporting Lead at Mitiga, where she draws on deep expertise in climate policy, reporting, and regulatory frameworks to develop climate risk disclosure tools. Prior to joining Mitiga, she led the Environment workstream for Deloitte UK’s largest ESG assurance engagement and played a central role in drafting sector guidance for the UK Transition Plan Taskforce.
