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California SB 261: Climate-Related Financial Risk Act · 2026-initial-regulation-as-amended-sb219

Disclosure SB261-FRAMEWORK-ALIGNMENT

TCFD or equivalent framework alignment

Practical guidance for preparing this disclosure. Use this card to identify datapoints, verify claims and organise supporting evidence. For exact requirements, always refer to the official CARB source.

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Reviewed by Dr Ross Kurinko · Sustainability Reporting Trainer LRA educational guidance · Not issued or endorsed by CARB

To prepare this disclosure

6datapoints↓ 6claims to verify↓ 5evidence areas↓ 3report examples↓

Disclosure focus

This disclosure asks an organisation to explain which recognised climate-risk framework it uses, or how its own approach lines up with one, when reporting on climate-related financial risk. In practice, the focus is on showing that the organisation has a structured way to identify, assess, manage and disclose climate risks and opportunities, rather than giving a general sustainability narrative.

The practical emphasis is usually on the whole organisation, not just a few flagship locations or isolated projects. A useful response should make clear whether the framework covers the full business, including relevant operations and decision-making processes, and whether any parts are excluded or only partially covered.

This LRA educational guidance supports disclosure preparation. For the exact requirements, always refer to the official CARB source.

Before you start

A quick mental checklist before you prepare this disclosure — tick each as you settle it.

Which climate-reporting framework are you using for this section, and is it the one your organisation will rely on here? Are you covering the full set of climate topics in scope for this disclosure, or only the parts you can support now? Have you fixed the reporting period and measurement basis for any figures you will use, so they line up with the rest of the report? Can each number or statement be traced back to a source you can show, rather than being a judgement call or estimate without support? Have you agreed the definitions and boundaries you will use for governance, strategy, risk handling, and targets so the wording stays consistent?

Preparation

Key datapoints to prepare

Datapoint What to capture Evidence hint Owner

Equivalent basis used Record which other reporting basis the company is relying on for this filing, and enough detail to show it is the basis actually used for the disclosure. Cross-check the selected basis against the published report or framework statement used for the filing. Sustainability reporting / Legal

Reporting framework chosen Capture the named reporting framework the company says it has followed for this disclosure, with the exact framework title used in the report. Tie the entry back to the framework named in the report cover, methodology note, or disclosure index. Sustainability reporting

Governance disclosure flag Confirm whether the report includes the governance-related climate disclosure set out under the referenced framework, and capture the yes/no status used for filing. Check the governance section of the report and the disclosure checklist or index. Sustainability reporting / Governance

Targets and metrics flag Confirm whether the report includes the climate metrics-and-targets disclosure set under the referenced framework, and capture the yes/no status used for filing. Review the metrics, targets and KPI sections together with the disclosure index. Sustainability reporting / Finance

Risk process flag Confirm whether the report includes the climate risk-management disclosure set under the referenced framework, and capture the yes/no status used for filing. Check the risk management narrative in the report and the disclosure checklist or index. Risk management / Sustainability reporting

Strategy disclosure flag Confirm whether the report includes the climate strategy disclosure set under the referenced framework, and capture the yes/no status used for filing. Review the strategy section of the report and the disclosure index or checklist. Strategy / Sustainability reporting

＋ Show SB261-FRAMEWORK-ALIGNMENT sub-elements (LRA working checklist)

How to prepare it

1Choose the reporting basis first. Identify the climate-reporting framework you are relying on, and record the equivalent reporting basis used for this filing.

2Map your content to the four required topic areas. Check that your disclosure covers governance, strategy, risk handling, and metrics plus targets, using the framework you selected.

3Gather the supporting records before drafting. Pull together board or committee papers, management materials, internal reports, and any other source documents that show the information you will report.

4Prepare the final disclosure in a clear, complete form. State the framework used and provide the required yes/no confirmation for each of the four topic areas, or the narrative and figures that support them.

5Note any gaps, exclusions, or changes in approach. If you have left anything out or changed how information is presented, explain that clearly so the reader can see what was not included and why.

6Check the draft against the official source before release. Confirm that the framework choice, the equivalent basis, and each topic-area disclosure match the source material and are internally consistent.

Request the data

Request the climate reporting evidence pack

Translate the disclosure into an internal business question — then adapt it to your organisation's own language.

Which reporting framework did we use, and can we show that our public climate report covers governance, strategy, risk handling, and metrics/targets for the period in scope?

Use your organisation’s own labels first, then map them to the climate reporting framework terms only when you prepare the disclosure. For example, ask for the board paper, risk register, climate plan, or KPI pack if those are the names your teams use. This is a possible LRA training template; adapt it to your organisation and check the source material before sign-off.

Weak request

Please confirm whether we are TCFD aligned and provide the governance, strategy, risk management, and metrics/targets disclosures.

Why it fails: This uses framework language only, so the owner may not know which internal documents to pull. It also does not specify the period, boundary, source system, or which approved materials should be returned.

Better request

Please send the latest approved climate reporting pack for [reporting period] for [entity/boundary], including the framework or approach used and the board, risk, climate plan, and KPI materials that support the sections on governance, strategy, risk handling, and metrics/targets. Include document title, version, date, approval status, source location, and any gaps. I will map your team’s labels to the disclosure wording.

Formal email template

Subject: Request for climate reporting evidence pack for [reporting period]

Hello [name/team],

I am preparing the climate disclosure pack for [reporting period] and need the supporting material for the public report or filing.

Please send the following for [entity/boundary]:
- the framework or approach we used for the climate report;
- the source material that shows how the report covers governance, strategy, risk handling, and metrics/targets;
- the latest approved version, plus any draft or redline if the published version is not yet available;
- the document name, version, date, and where it is stored;
- any note on gaps, exceptions, or sections handled by another team.

Please use your team’s own document names and system labels. I will map them to the disclosure wording during preparation.

This is a possible LRA training template; please adapt it to your organisation and check the source material before sign-off.

Many thanks,
[preparer name]

Short Teams / Slack version

Hi [name/team] — I’m pulling together the climate disclosure pack for [reporting period]. Could you share the latest board/risk/climate materials that show the framework used and the sections covering governance, strategy, risk handling, and metrics/targets for [entity/boundary]? Please include version/date, source location, and any gaps. I’ll map your team’s labels to the disclosure wording. This is a possible LRA training template; adapt it to your organisation and check the source material before sign-off.

Industry examples

Financial services

Context. The climate disclosure is assembled from board papers, enterprise risk reporting, and the annual report drafting pack.

Adapted request. Please share the approved board paper, risk committee pack, climate strategy note, and KPI dashboard for [reporting period] that show the framework used and the materials behind the governance, strategy, risk handling, and metrics/targets sections for [entity/boundary]. Include version, date, and file location.

Example response. Board paper v4 dated 18 Mar 2025; risk committee pack v2 dated 20 Mar 2025; climate strategy note v3 dated 15 Mar 2025; KPI dashboard FY2024; framework used: TCFD; gaps: none; source: board portal and shared drive folder [link].

Manufacturing

Context. The climate disclosure is built from operations, HSE, and finance inputs, with final sign-off in the annual report process.

Adapted request. Please send the latest approved climate report inputs from operations, HSE, and finance for [reporting period], including the framework or approach used and the documents showing how the report covers governance, strategy, risk handling, and metrics/targets for [plant/site/group boundary]. Include the file name, version, date, and any missing sections.

Example response. Operations climate pack v2 dated 02 Apr 2025; HSE risk register extract v5 dated 28 Mar 2025; finance KPI workbook FY2024; framework used: TCFD; gaps: strategy section pending final board wording; source: shared drive folder [link].

Draft your disclosure

Notes that turn data into a disclosure

LRA training templates — adapt them to your organisation, and check the official source before sign-off.

Method note

This disclosure is based on the reporting basis identified by the company and the framework it says it used, with each TCFD topic area marked according to whether the relevant information was provided.

Context note

Taken together, the data show which framework underpinned the disclosure and whether the report includes the main topic areas expected for a climate-related narrative.

Fluctuation statement

If the pattern changes from one period to the next, the reporter can explain that the shift reflects changes in the reporting basis, the scope of the framework used, or the extent to which each topic area was completed.

Content index entry

SB261-FRAMEWORK-ALIGNMENT TCFD or equivalent framework alignment — [location / page] / [notes]

Download Centre

Preparation tools & forms

Professional preparation tools for SB261-FRAMEWORK-ALIGNMENT — free with an LRA Community membership. Register once (it's free) and every download unlocks, together with the Disclosure Library, templates and the LRA AI-assistant.

Free · Community members

01XLSPrep & Assurance workbookDatapoints, risks, evidence to check, owner and evidence pack.Get it free ↧ 02XLSData-request packRequest email, message template, response fields and sign-off structure.Get it free ↧ 03PDFLibrary CardPrintable one-page summary of this disclosure card.Get it free ↧

Go deeper · SB261-FRAMEWORK-ALIGNMENT

Learn to prepare this disclosure end-to-end

This guide covers one statutory requirement. The California Climate Regulation course walks SB 253 and SB 261 end to end — applicability, GHG inventories, climate-risk reporting and assurance — with exercises on your own data.

Available as Guided Flex, Live Cohort, 1:1 Expert Mentorship or Corporate Programme.

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Assurance readiness

For each claim, check the evidence

ClaimRiskEvidence to check

We relied on a different reporting basis that we believe is acceptable for this filing, and we can show why it was chosen.The assurer checks whether the basis was actually eligible, consistently applied, and not selected simply because it was convenient or incomplete.Board or management approval of the chosen basis; a short rationale memo; mapping from the chosen basis to the disclosed content; any legal or technical review confirming eligibility.

We named the reporting basis we used in the published material, so readers can see what framework or rule set underpinned the disclosure.The assurer probes whether the named basis matches the content, whether it was identified clearly, and whether the wording could mislead about what was actually used.Final report wording; cross-check against the internal disclosure checklist; version history showing the named basis was retained through sign-off; reviewer comments on clarity.

We prepared the governance section using the same reporting approach throughout, and the underlying source material was aligned before publication.The assurer looks for inconsistency between the stated approach and the actual governance content, or for missing support for parts of the section.Draft-to-final comparison; source documents for governance statements; internal review notes; sign-off from the owner of the governance content.

Where our governance information was not complete, we explained the gap and set out what remains to be done.The assurer checks whether the gap explanation is specific, whether the missing items are clearly identified, and whether the follow-up plan is realistic.Gap log; action tracker; draft explanations for each omission; evidence of management review of the completion plan.

We prepared the metrics-and-targets section from the best information available at the time, and we kept a record of any limitations in the data.The assurer probes whether the data were current, whether estimates or proxies were used appropriately, and whether limitations were disclosed rather than hidden.Data source list; calculation files; notes on estimates, assumptions, or proxies; data quality review records; evidence of sign-off on the final figures.

We used the same reporting basis for the risk-management section as for the rest of the disclosure, so the narrative is internally consistent.The assurer checks for mismatches between sections, unsupported claims about processes, or a risk story that does not fit the rest of the filing.Cross-reference matrix between sections; process maps or policy extracts; internal consistency review; reviewer comments and resolution log.

Evidence pack to prepare

The governing policy or written commitment behind this disclosureA methodology / definition note setting out how the disclosure was scoped and preparedSource-system exports the figures or facts were drawn fromThe internal approval / sign-off record for the disclosure before publicationMinutes or records evidencing the relevant engagement or consultation

Common reporting gaps

The information is presented without a date or as-at point.The scope or boundary of the statement is left undefined.Key terms are used inconsistently across the report.Material changes since the previous period are not disclosed.Assertions are made without supporting detail or a source record.Boilerplate is used that does not actually answer what is asked.

Common gaps

Mistakes to avoid when collecting the data

Wrong owner

The request goes to a team that does not hold the source records, so the answer is built from second-hand knowledge instead of the people who can trace it back.

Framework words too early

The team asks for the information in framework language rather than the organisation’s own terms, and the source owner cannot map the request to their records.

Scope left vague

No one states which business units, entities, or activities are in scope, so different teams collect different slices of data that cannot be compared.

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Where judgement is often needed

Choosing the reporting basis after a buy-in or sale-out

Set the reporting boundary from the same cut-off date and group structure used in your wider reporting pack, then explain any additions or removals from acquisitions, disposals or reorganisations so readers can see why the comparison changed.

Reconciling different country-level definitions

Where local teams use different labels or thresholds for the same topic, map them to one organisation-wide approach, state the mapping rule, and note any country exceptions that were kept for legal or operational reasons.

Deciding who sits just inside or just outside scope

For entities, sites, funds or activities near the edge of your boundary, apply one documented inclusion rule consistently and disclose the main exclusions so users understand the line you drew.

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Examples

Illustrative examples

Synthetic, written by LRA — not from a company report, not text from any standard.

Illustrative (synthetic) example — manufacturing

We rely on a climate-reporting framework that is accepted as equivalent for this filing, and we use that framework to organise the disclosure. - Governance: yes; strategy: yes; risk handling: yes; measures and targets: yes. - In practice, that means our board and committee oversight, our climate-related business planning, our risk process, and our emissions/target reporting are all covered in the package we publish.

This example shows a company in manufacturing saying it used an accepted equivalent climate framework for the filing and that all four TCFD-style content areas are covered.

Illustrative (synthetic) example — financial services

Our group uses a recognised climate disclosure route that we treat as equivalent for this report, and we present the information through that framework. - Oversight by directors and committees: yes; climate-related business planning: yes; risk identification and response: yes; performance measures and targets: no. - So, the report covers leadership, planning, and risk handling, but it does not include a full set of metrics and targets in this cycle.

This example shows a financial-services reporter using an equivalent route and disclosing three of the four content areas, while leaving out the measures-and-targets element.

Company reportsReal published reports

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How companies report SB261-FRAMEWORK-ALIGNMENT in practice

Real reports where this topic is disclosed. These are report practice, not exact disclosure templates to copy.

Sands China Ltd.

Hotels, Restaurants, Leisure, Tourism Services · Macao · 2025

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Sands China Ltd.’s 2025 ESG Report provides covered disclosures on TCFD governance, noting that the board of directors has delegated authority on ESG-related issues (p.29), and on TCFD metrics and targets, including a 2025 target of a 17.5% decrease in Scope 1 and 2 absolute emissions (p.30-31). The report partially addresses TCFD strategy and framework use, mentioning a materiality assessment process and referencing frameworks like TCFD and SASB without headline values (p.27, 29). However, the disclosure on TCFD risk management is unclear, with risk assessments limited to present day and sea level rise only assessed for 2100, lacking a clear comprehensive risk management statement (p.32).

Owens Corning

Building Products · United States · 2024

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Owens Corning’s 2024 Sustainability Report provides some related context on TCFD climate risks and opportunities, including references to governance (p.352) and risk management (p.361), but does not clearly disclose these elements. There is no clear evidence of disclosures on TCFD strategy or metrics and targets within the report. The report also lacks explicit mention of alignment with the SB261 framework or equivalent reporting requirements.

Cargill

Food Production — Agricultural · United States · 2025

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Cargill's 2025 Impact Report provides some related context to the SB 261 disclosure requirements, including references to governance and climate-related risks and opportunities on pages 2 and 111, though these do not constitute clear or explicit disclosures of board oversight, strategy, or risk management as per the framework (pp. 2, 111). The report mentions a TCFD index on page 111 and discusses climate strategy and risk management in general terms but lacks specific, detailed disclosures on metrics, targets, or a formal framework alignment. Notably, there is no quotable evidence found regarding the use of a reporting framework or equivalent reporting requirements, and the clarity of governance and risk management disclosures remains uncertain.

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Check your understanding

Scenarios to work through

A reporting team has prepared a climate section using a different recognised framework, but the draft only covers the organisation’s oversight arrangements and leaves out how climate issues affect the business model, how climate risks are handled, and any measures or targets.

QShould the team treat this as enough alignment for this disclosure, or do they need to check that the chosen framework covers the full set of climate topics they are relying on?

Reveal model answer →

A preparer has copied climate content from a group report that uses a recognised framework, but the local filing only includes the framework name and a short note saying the company follows it. The underlying sections are not clearly mapped to the four topic areas.

QIs naming the framework enough, or should the preparer make sure the disclosure shows where each climate topic is covered?

Reveal model answer →

A sustainability lead is reviewing a draft that includes a detailed risk process and a set of emissions targets, but the board oversight section is still being finalised. The team wants to publish now and fill in the governance wording later.

QCan they treat the disclosure as complete if one of the framework areas is still missing?

Reveal model answer →

A company uses a climate framework that is not TCFD, but its draft report only says the framework was used and then gives a narrative on climate strategy. It does not explain how the chosen framework supports the disclosure or whether the same framework is used consistently across the climate section.

QWhat should the preparer check before relying on that framework in the filing?

Reveal model answer →

Framework references