California businesses are reporting their climate related financial disclosure in line with global standards. As reported in Law360, California’s S.B. 261 requires companies doing business in the state with revenues above $500 million to publish biennial climate-related financial risk reports aligned with the Task Force on Climate-related Financial Disclosures (TCFD) framework or a consistent alternative. Despite the U.S. Court of Appeals for the Ninth Circuit pausing enforcement in November 2025, more than 130 companies voluntarily reported as of April 2026, offering a view of market practice. TCFD dominates: about 88% of these companies cite it as their foundation, regardless of industry or format, signaling broad acceptance. It also serves as a common thread across jurisdictions. Filers paired it with International Sustainability Standards Board's International Financial Reporting Standard 2 (17%), the EU’s Corporate Sustainability Reporting Directive/European Sustainability Reporting Standards, (6%), and UK and New Zealand regimes, often citing several frameworks at once, which shows companies using TCFD to harmonize California reporting with global obligations.
Following TCFD’s structure, nearly all filers identified climate risks, mostly transition (87%) alongside physical risks, and 92% disclosed opportunities. About 78.5% disclosed greenhouse gas emissions, which the statute does not expressly require, and 94% described climate governance oversight. The authors conclude early compliance is principles-based and TCFD-driven, giving later filers a practical benchmark as regulatory clarity develops. (Published April 7, 2026. Law360 subscription required to read.)
CO-AUTHOR: Jesse Medlong, Watchfire Founding Member
