A significant shift is sweeping across state capitals, reshaping how businesses account for their climate impact. What started as an experiment in corporate transparency in California is becoming a multi-state movement that sustainability leaders can’t afford to ignore.
The Foundation: California’s Climate Accountability Package
California’s twin laws, SB 253 and SB 261, have set a new benchmark for corporate climate reporting. SB 253 requires companies with over $1 billion in global revenue to disclose Scope 1 and 2 emissions starting in 2026, with Scope 3 emissions following in 2027. SB 261 mandates companies with annual revenues exceeding $500 million to publish reports every 2 years on climate-related financial risks and submit mitigation strategies beginning in January 2026.
The California Air Resources Board has delayed finalizing the rules until early 2026, but the deadlines for compliance at the start of 2026 have not changed. Companies should start preparing now.
A New Wave of State Legislation
California’s framework has sparked nationwide legislative action, with states no longer waiting for federal guidance. They are drafting their own carbon disclosure rules, with many adopting California’s model and tailoring it to address local priorities.
- New York’s Senate Bill 3697 takes direct inspiration from California’s SB 261. It would require companies earning over $500 million in revenue to report their climate‑related financial risks every two years using the Task Force on Climate-related Financial Disclosures standards. The bill stalled in committee this year but is expected to be reintroduced in 2026, with the first reports covering 2027 data due in January 2028.[1]
- Colorado’s House Bill 25-1119 would require companies earning over $1 billion to report Scope 1 and 2 emissions starting January 2028 and Scope 3 emissions by 2031. The inclusion of third-party verification and significant non-compliance penalties makes it one of the strictest state proposals to date. The bill is still moving through the legislature.[2]
- New Jersey’s S4117 mirrors California’s SB 253 almost word-for-word. If enacted in 2026, companies with over $1 billion in revenue would begin reporting greenhouse gas (GHG) emissions in 2029, phasing in Scope 3 by 2031. Notably, New Jersey plans to accept reports already filed under California’s law, easing redundancy for multi-state companies. This bill is currently before the Senate Budget and Appropriations Committee.[3]
- Illinois’ House Bill 3673 would require companies with over $1 billion in revenue to report all Scopes of emissions beginning in 2028. The state would build a digital reporting platform to publicly host emissions data, setting a new standard for accountability and data accessibility. This bill has been under consideration since February 2025.[4]
Proactive Steps for Climate Disclosure Success
For sustainability teams, the message is clear: Regional climate disclosure requirements are becoming a national expectation. Over the next three years, companies will face overlapping but aligned deadlines that demand consistent, auditable GHG data collection and financially relevant climate risk reporting. Companies should take steps now to establish the systems they’ll need to comply with their state’s reporting requirements, beginning with the following recommended actions:
- Mapping operational jurisdictions and revenue thresholds to determine coverage
- Adopting California‑aligned disclosure and verification standards as a national baseline
- Integrating Scope 3 data systems early to streamline future multi‑state reporting
- Planning for assurance requirements and digital registry submissions
Climate transparency is no longer an option—it’s the next frontier of corporate governance. State by state, the U.S. is building a web of accountability, and early movers will be able to demonstrate proactive leadership and avoid the unnecessary extra costs of a last-minute rush to readiness.
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References:
New York SB 3697: Climate‑Related Financial Risk Disclosure Act | Greenplaces
NY State Senate Bill 2025-S3697A
Require Disclosures of Climate Emissions | Colorado General Assembly
What is Colorado’s Climate Disclosure (House Bill 25-1119)?
Bill Text: NJ S4117 | 2024-2025 | Regular Session | Amended | LegiScan
Bill Text: IL HB3673 | 2025-2026 | 104th General Assembly | Introduced | LegiScan
