Shipping 2026

USA – CALIFORNIA Trends and Developments Contributed by: Bradley Rose and Clint Mead, Kaye, Rose and Partners LLP

California’s Climate Data Reporting Acts California has enacted legislation (SB 253 and SB 261) requiring certain US-based entities to report speci - fied greenhouse gas (GHG) emissions and climate- related financial risks. California Air Resources Board (CARB) is tasked with implementing this legislation and has recently held public meetings and released draft regulations regarding these Acts, their applica - tion, their requirements, and the updated timeline for compliance. At the outset it should be noted that these Acts only apply to US entities. Many shipping companies, espe - cially maritime shipping companies, as foreign busi - nesses which were not formed under the laws of the United States, will not need to comply with the Acts. If a company is a foreign entity (organised under the laws of a non-US jurisdiction), no further analysis is needed. This is true regardless of whether the foreign entity has offices in the US and how much of its busi - ness is conducted in California or the United States. It should also be noted that on 18 November 2025, the Ninth Circuit Court of Appeals issued an injunction temporarily halting the enforcement of SB 261, which otherwise would have required initial reporting on 1 January 2026. No stay was issued for SB 253, which has a tentative reporting date of 10 August 2026. The best practices for businesses subject to the require - ments of SB 261 would be to prepare to comply with the requirements of the Act on short notice if and/or when the stay is lifted. The California Acts: SB 253 and SB 261 SB 253 and SB 261, both enacted in 2023, require business entities formed under the laws of California, the laws of any other state of the United States or the District of Columbia, or under an act of the Congress of the United States to report specified greenhouse gas (GHG) emissions and climate-related financial risks. The disclosures required under these laws will purportedly improve transparency from companies regarding their GHG emissions and climate-related risk management practices to better inform the deci - sion-making of California consumers, investors and members of the public.

SB 253, the Climate Corporate Data Accountability Act, applies to US companies with more than USD1 billion in annual global revenue that also do business in California, defined as having sales in California exceeding approximately USD735,000D, or having 25% of overall sales in California, or being organ - ised or commercially domiciled in California. Initial reporting is due by 10 August 2026, which requires a report posted to the business’ website and reporting to CARB. Reporting entities must report their Scope 1 and Scope 2 greenhouse gas emissions in the ini - tial 2026 report (subject to some leeway for entities that did not collect this data), and, starting in 2027 and annually thereafter, their Scope 3 greenhouse gas emissions from the reporting entity’s prior fiscal year. SB 253 adds Section 38532 to the California Health and Safety Code and is sometimes referred to by this section number. SB 261, the Climate-Related Financial Risk Act, applies to US companies with more than USD500 million in annual global revenue that also do business in California, similarly defined as being domiciled in California or having approximately USD735,000 in California sales or 25% of overall sales in California. During CARB’s most recent meeting, on 18 November 2025, it stated that despite its own delays in the rule- making process, it would still require reporting on 1 January 2026. Later that same day, however, the Ninth Circuit Court of Appeals issued a temporary injunc - tion preventing enforcement of this deadline, which is stayed for the time being. SB 261 requires busi - nesses to biennially report any climate-related finan - cial risks they have identified and any measures they have adopted to reduce and adapt to those risks. SB 261 adds Section 38533 to the California Health and Safety Code and is sometimes referred to by this sec - tion number. US-based entities Currently, the Acts only apply to US entities. As clarification, the Acts solely apply to business enti - ties formed under the laws of California, the laws of any other state of the United States or the District of Columbia, or under an act of the Congress of the Unit - ed States. The exact text of SB 253 states as follows:

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