Continued uncertainty surrounding the rollout of California’s new climate risk disclosure regulations (SB 261) is preventing companies from having clear direction on actions needed to ensure compliance. The California Air Resources Board (CARB) issued an enforcement advisory on December 1 stating that in light of a recent injunction by the Ninth Circuit Court of Appeals, CARB will not enforce any January 1, 2026 reporting requirements mandated by SB 261.
At the same time, CARB said it would accept voluntary reporting and will provide further guidance on reporting under SB 261 after the appeal before the Ninth Circuit is decided, with arguments currently set for January 9, 2026. While reporting under SB 261 has been held up, mandatory reporting of GHG emissions under SB 253 will begin in 2026 with Scope 1 and 2 emissions, with Scope 3 emissions reporting to follow in 2027.
In one of our Top Stories in this issue, Adrian Gonzalez of Talking Logistics points out that to stay on top of sustainability regulations in the U.S. these days, “it might be helpful to have a law degree because all the action is happening in courtrooms.” He points to continued legal filings regarding the SEC’s climate disclosure rules, which were finalized in March 2024 and then abandoned by the Trump administration, but have not been formally rescinded.
The U.S. is not the only place where there is uncertainty regarding mandatory sustainability reporting, with the European Parliament moving to reduce reporting requirements for the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD). While some of these rules are already in force or entering phased implementation, future reporting requirements and timetables may change.
Our other Top Story this issue is an op-ed in Sustainability Online by Juanjo Mestre, CEO of Dcycle, an environmental software company based in Madrid. Mestre says that doing away with mandatory ESG reporting risks setting back businesses years, saying, “back tracking on work that has been years in the making comes at a cost.”
Mestre states: “The world’s largest investors and supply chains are already demanding robust environmental disclosures, not because of regulation, but because it’s how they assess resilience and value creation.”
He argues that recent uncertainty about mandatory reporting “shouldn’t be viewed by businesses as reasons to delay ESG reporting efforts,” but instead as an opportunity to “build smarter systems and get ahead.”
Both of the authors of our Top Stories agree that regulations will continue to change but that companies must continue to focus on having strong ESG data gathering and reporting systems. According to Talking Logistics, “The regulatory landscape may be noisy and unpredictable, but that’s all the more reason to stay focused on what you can control — improving visibility, strengthening collaboration, and modernizing the systems that support both.”
The G&A team continues to closely monitor the uncertain regulatory environment and keep you updated on changes to sustainability reporting requirements. As always, we are available to help your company take action to ensure that you have the best systems in place to efficiently gather and report your data. Reach out to us at info@ga-institute.com.
This is just the introduction of G&A’s Sustainability Highlights newsletter this week. Click here to view the full issue
