California posts draft climate risk checklist for business.

Posted on September 21, 2025 by Editor

The California Air Resources Board (CARB) has unveiled a draft checklist to steer companies through new climate risk disclosure obligations. The rules apply to large US businesses operating in California with annual revenues above $500 million, who must publish climate-related financial risk reports from January.

The checklist sets out what companies should disclose on governance, strategy, risk management and metrics. Reports can follow recognised frameworks such as those from the Task Force on Climate-related Financial Disclosures (TCFD) or the International Financial Reporting Standards (IFRS) S2 Climate-related Disclosures. While the draft guidance does not create new legal obligations, it is designed to help companies navigate what can otherwise be a reporting minefield.

The law behind this, Senate Bill 261, requires biennial reports on climate risks and adaptation measures. California is filling the regulatory vacuum left by Washington, requiring locally active businesses to take climate risk seriously in their reporting.

Aligning climate risk disclosures with structured digital reporting would transform these reports from dense PDFs into usable data for investors and regulators alike. California's actions show that ESG reporting is quickly converging with financial reporting. Yes! We agree - it all needs to be digital disclosure!

The full draft checklist is available here.