SB 261 compliance
SB 261 Compliance & Climate Risk Reporting Services
Navigate California's SB 261 with ECG's turn-key compliance solutions. We manage your climate risk assessment, TCFD-aligned reporting, and CARB submissions to ensure you meet the 2026 deadline efficiently and avoid penalties.
California’s Senate Bill 261 (SB 261), the Climate-Related Financial Risk Act, introduces mandatory climate risk reporting for large companies, with the first deadline on January 1, 2026. Failure to publish a sufficient report can result in penalties of up to $50,000 per reporting year. ECG provides a turn-key service package that ensures your organization meets every requirement of SB 261—efficiently, credibly, and on time.
What is California Senate Bill 261?
SB 261 is a law requiring U.S. companies that do business in California and have annual revenues over $500 million to publish biennial reports on their climate-related financial risks and mitigation strategies. These reports must be publicly available on the company’s website and align with established disclosure frameworks.
Key Compliance Requirements of SB 261
Who Must Comply?
- Any U.S. corporation, LLC, partnership, or similar entity with total annual revenues exceeding $500 million that is “doing business in California”.
- The definition of “doing business in California” will be clarified by the California Air Resources Board (CARB), but it is commonly aligned with state Franchise Tax Board thresholds.
- Insurance companies that already report to the California Department of Insurance under NAIC standards are exempt.
What to Report?
Your company must prepare a Climate-Related Financial Risk Report that details:
- Disclosures structured in accordance with the Task Force on Climate-Related Financial Disclosures (TCFD) framework or an equivalent, such as the ISSB’s IFRS S2 standard.
- An analysis of your organization’s physical risks (e.g., wildfires, droughts) and transition risks (e.g., policy changes, market shifts).
- A description of the measures you have adopted to reduce and adapt to these identified climate risks.
Our Turn-Key SB 261 Compliance Services
ECG manages the entire process so your team can stay focused on your core business.
- Applicability Assessment
- We determine if your company falls under the SB 261 requirements based on revenue and operational footprint.
- Our experts clarify the “doing business in California” criteria as it applies to your specific sales, property, and payroll.
- Climate Risk & Opportunity Assessment
- We conduct a thorough physical risk analysis covering hazards like wildfires, extreme weather, and flooding.
- Our team evaluates your transition risks, including regulatory, market, and reputational exposures.
- We integrate financial modeling to quantify the potential impacts of these risks on your business.
- TCFD-Aligned Disclosure and Reporting
- We develop a complete reporting structure aligned with the TCFD or ISSB S2 frameworks to ensure full compliance.
- Our specialists draft the public-facing Climate Risk Report, ready for posting on your website.
- We deliver biennial update plans to keep your reporting current and compliant for future cycles.
- Mitigation & Adaptation Strategy
- We help you identify and formalize risk reduction measures, including resilience planning, energy transition pathways, and supply chain engagement.
- Our team builds actionable roadmaps that demonstrate credible and science-based adaptation strategies.
- Regulatory & Fee Management
- We manage communications with the California Air Resources Board (CARB).
- Our team provides clear guidance on the annual fee payment process and documentation retention.
Why Partner with ECG for SB 261 Compliance?
- End-to-End Expertise: From climate risk modeling to TCFD disclosure drafting, ECG delivers a complete solution.
- Credible & Defensible Reporting: We align your reporting with the highest international standards to ensure investor and regulator confidence. CARB considers good-faith compliance efforts when assessing penalties.
- Risk Reduction Beyond Compliance: We don’t just file reports—we help you strengthen your company’s resilience, brand value, and financial performance.