Case Study

Complying with California Climate Disclosure Laws

SUMMARY/OVERVIEW

How BDO Helped a Telecommunications Provider with SB 261 and SB 253 Compliance

Facing the challenge of identifying areas of improvement to comply with imminent climate reporting requirements for companies who do business in California, a major U.S. telecommunications provider sought a clear path forward with help from BDO.

More specifically, under SB 253, U.S. companies doing business in the state with annual global revenues greater than $1 billion must disclose and obtain assurance over their greenhouse gas (GHG) emissions inventory, with phased-in compliance deadlines beginning in 2026.

In addition, under SB 261, U.S. companies doing business in California with annual global revenues exceeding $500 million must prepare and publish a report on climate-related financial risks every two years*.

*Although the first report was initially due by January 1, 2026, a federal appeals court issued an injunction in November 2025 that pauses enforcement of SB 261 pending the outcome of an appeal scheduled for early 2026.

Key Takeaways

Provided a comprehensive California climate law disclosure gap analysis  

Developed a roadmap to compliance with California climate reporting laws 

Enhanced opportunities for corporate communication around climate disclosures in key public documents 

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The Challenge

Creating a Roadmap for California Climate Reporting Disclosures

The company had taken several first steps toward sustainability-related compliance. For example, it publishes an annual sustainability report that includes GHG emissions data and some information on climate risk. In addition, the company’s internal audit function performed a preliminary gap analysis to determine the maturity of processes and controls underpinning its GHG calculations. 

However, to verify the extent to which its existing sustainability reporting could be leveraged to satisfy California’s climate disclosure requirements for both SB 253 and SB 261, the company recognized the need to engage an external provider experienced in California climate disclosures. 

Concerned about compliance and rapidly approaching deadlines, the client asked BDO to provide a more comprehensive assessment and roadmap for its climate-related disclosures.

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The Approach

Conducting a Climate Disclosure Readiness Assessment

Our team began by reviewing the company’s existing disclosures and internal documentation related to climate-related risks. This first step aimed at helping the team determine the company’s readiness to publish a climate-related financial risk report and fulfill SB 261 requirements. To achieve that, the team conducted a set of interviews with relevant internal stakeholders and verified the extent to which information was aligned with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). 

Furthermore, as part of the process, a critical component of the review involved evaluating the client’s Enterprise Risk Management (ERM) framework. Our team used the results of this evaluation to understand how the client considered climate in its existing approach to risk management. 

As it relates to readiness for SB 253 compliance, we assessed the company’s processes and controls for safeguarding its GHG emissions data quality. Our team reviewed the collection process for Scope 1 and 2 GHG emissions to understand the current data maturity level and performed a gap assessment against the Greenhouse Gas Protocol — the standards and guidance referenced by SB 253 and other sustainability reporting mechanisms. 

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The Results

Addressing Key Priorities with a Remediation Plan

The results of our climate disclosure readiness assessment guided the client through a compliance journey. Our recommendations on how to better integrate climate risk into the company’s established ERM program helped enhance business continuity. Other deliverables for the client include the following:

  • Compliance Roadmap

    Helped the client develop a compliance roadmap for California SB 261 and SB 253 reporting.

  • Remediation Plan

    Designed an effective remediation plan that formed a critical part of the client’s compliance process.

  • Compliance Matrix

    Provided the client with a matrix that outlines the link between TCFD recommendations and reporting requirements under SB 261, while correlating SB 253 requirements with the GHG Protocol.

  • Enhanced Climate-Related Disclosures

    The client is well positioned to enhance its climate-related disclosures in sustainability reports and SEC filings due to the results of our team’s assessments.

By collaborating with our team of experienced professionals, our client now has a clear path to help ensure ongoing compliance with California climate laws.

California’s climate disclosure laws are requiring thousands of companies that do business in the state to establish new reporting processes and programs. By conducting a comprehensive climate disclosure readiness assessment and developing a roadmap for compliance, we’re enabling our client to confidently address the legal requirements set out by SB 253 and SB 261. This readiness work also establishes a foundation to enhance the organization’s consideration of climate risk in their business continuity plans and to respond proactively to future regulatory changes and market expectations.
Aurora Bardoneschi
Director, Sustainability Services

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