Disclosure focus
This disclosure asks an organisation to explain what it is doing to reduce climate-related financial risk and to adapt its business to those risks. In practice, that means describing the measures in place, the risks they are meant to address, and how those measures are intended to protect the organisation’s finances, assets, operations, and resilience over time.
The practical focus is on the breadth and usefulness of the response, not just on a few headline projects. Organisations should think about whether their actions cover the full business where relevant, including operations, supply chains, sites, and other material parts of the business, rather than only flagship locations or isolated initiatives. The aim is to show how risk reduction and adaptation are being embedded in the organisation’s overall approach.
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.
Preparation
Key datapoints to prepare
＋ Show SB261-RISK-MITIGATION-ADAPTATION sub-elements (LRA working checklist)
State how well each risk response is expected to work.
Name who in the organisation is responsible for overseeing the risk response.
Describe how far along each response is in being put into practice.
Set out the actions taken to help the business adjust to climate-related financial risk.
Set out the actions taken to help lower climate-related financial risk.
Explain what resources have been set aside for the risk responses.
How to prepare it
1Set the boundary for the disclosure first: decide which climate-related financial risk measures are in scope, and separate the actions aimed at adapting to those risks from the actions aimed at reducing them.
2List each measure in plain business language, then note who in the organisation owns it, so the governance lead for each action is clear.
3Gather support for every measure: keep the documents, approvals, plans, or other records that show the action exists and can be traced back to the organisation’s decision-making.
4For each measure, record its current stage and explain how well it is expected to work, using a short narrative where a number is not available and a figure where resources have been set aside in US dollars.
5If anything is left out, changed, or only partly covered, explain that clearly so the disclosure matches the actual position rather than an idealised version.
6Before finalising, compare the draft against the official source and confirm that the scope, ownership, status, resources, and effectiveness statements all align with the underlying requirement.
Request the data
Request the climate risk mitigation and adaptation evidence
Translate the disclosure into an internal business question — then adapt it to your organisation's own language.
What actions are in place to reduce and adapt to climate-related financial risk, who owns them, how far along are they, what resources support them, and how effective are they expected to be?
Use your organisation’s own terms first, then map them to the disclosure language. For example, if you talk about business continuity, site resilience, asset hardening, or transition planning internally, use those labels in the request and only translate them afterwards for reporting.
Weak request
Please provide the measures adopted to adapt to climate-related financial risk, the expected effectiveness, governance owner, implementation status, and resources allocated.
Why it fails: It uses framework language that may not match how the business tracks work, so the owner may not know which projects, budgets, or approvals to pull. It also does not say which part of the business, which period, or which source records to use.
Better request
Please send the current list of resilience, continuity, and risk-reduction actions for [business unit/site/portfolio] for [period], including the owner for each action, whether it is planned or already under way, the budget or spend attached to it, and a short note on how well it is expected to work. Use your normal project names and attach the source file or system reference.
Industry examples
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
Describe how the company defined the climate-related financial risk actions, how it distinguished steps to limit exposure from steps to adapt, and what basis it used to judge progress, ownership, resources, and expected effectiveness.
Context note
Explain what the figures show about the company’s readiness to manage climate-related financial risk, including which actions are in place, who is accountable, how far implementation has progressed, and how much support has been committed.
Fluctuation statement
If the numbers changed from the prior period, note whether that reflects new actions added, measures completed, changes in assigned responsibility, revised resource levels, or a different view of how effective the actions are likely to be.
Content index entry
SB261-RISK-MITIGATION-ADAPTATION Measures to reduce and adapt to climate-related financial risk — [location / page] / [notes]
Download Centre
Preparation tools & forms
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Assurance readiness
For each claim, check the evidence
Evidence pack to prepare
Common reporting gaps
Figures are stated without the supporting narrative, or narrative without figures.Scope is inconsistent between the text and the numbers.The reporting boundary is left undefined.Material changes since the previous period are not disclosed.Estimates and measured values are not distinguished.Source records for the figures are not identified.
Common gaps
Mistakes to avoid when collecting the data
Wrong owner asked
The request goes to a policy team or sustainability lead when the person who actually tracks the controls, budget, or delivery status is elsewhere in the business.
Framework language used
The data call is sent in disclosure jargon, so teams cannot map it to their own project names, risk registers, or operational workstreams.
Scope left vague
No one states which business units, assets, or activities are in scope, so different teams send different slices of the same topic.
Timing basis not fixed
People pull figures from different cut-off dates or reporting periods, which makes the set of answers internally inconsistent.
Counting basis mixed
One source reports spend, another reports commitments or forecasts, and the final pack blends them without separating the basis used.
Source labels stripped
Original file names, system tags, or document references are removed, so the team cannot trace each figure back to where it came from.
Separate groups merged
Measures for different sites, regions, or risk types are rolled into one total even though they should stay distinct for review.
Evidence trail missing
The pack contains the numbers but not the supporting notes, version history, or sign-off record needed to show who checked them.
Where judgement is often needed
Acquisition or disposal changes the reporting perimeter
Set out whether the measures list and spend cover the business as it stood at period end or are adjusted for bought or sold operations, and explain the basis used if the perimeter moved during the year.
Different country labels for the same control
If the same action is described differently across locations, map those local labels to one group-wide description and note any country-specific differences that affect how the measure works.
Units at the edge of the scope
Decide whether to include partially owned, newly launched, dormant, or outsourced activities where they materially affect the risk response, and explain the inclusion rule used.
Current-year spend versus committed spend
State whether the resource figure reflects cash spent, amounts committed, or both, and make clear the cut-off date used for the figure.
Estimated benefit versus measured outcome
Where the effect of a measure is not yet observed, describe it as an estimate, say what evidence supports it, and separate it from results that have been measured in practice.
One measure, several risk types
If a single action helps with more than one climate-related financial risk, explain how you avoided double counting and how you assigned the measure in your narrative.
Rounding of resource figures
Apply one rounding approach across the disclosure, disclose the basis if it changes the reported total, and keep the narrative aligned with the rounded figure.
Privacy limits on location-level detail
When local detail cannot be shown because of data protection or confidentiality, group the information at a higher level and say that the aggregation is due to privacy limits.
Examples
Illustrative examples
Synthetic, written by LRA — not from a company report, not text from any standard.
Illustrative (synthetic) example — manufacturing
We have put in place a programme to cut and manage climate-related financial exposure through flood defences at two sites, heat-resilient equipment upgrades, and a supplier continuity plan; these actions are led by the risk committee, with day-to-day delivery owned by the chief risk officer. Of the £12.0 million set aside for this work, £7.2 million is already committed and £4.8 million remains available, and we expect the package to lower our near-term loss exposure by about 35% once fully rolled out. - The main actions are already under way, with site works 60% complete and supplier planning complete. - We judge the measures to be moderately to highly effective because they address the largest weather-related loss drivers in our operations and logistics network.
Synthetic illustration only; shows how a reporter might describe actions taken to both limit and adapt to climate-linked financial exposure, who owns delivery, how far implementation has progressed, what resources are assigned, and the expected level of benefit.
Illustrative (synthetic) example — financial services
Our group has introduced portfolio screening, client transition support, and branch resilience upgrades to reduce and adapt to climate-related financial exposure; oversight sits with the board risk committee, while the chief sustainability officer coordinates implementation across business lines. We have allocated €3.5 million in total, of which €1.4 million has been spent and €2.1 million is reserved for the next 18 months, and we expect the measures to reduce the relevant exposure by roughly 28% once the remaining work is finished. - Implementation is partly complete: portfolio screening is live, client support is in pilot, and branch upgrades are 40% complete. - On current plans, the measures should be effective at lowering the most material weather- and transition-linked losses, though the full benefit depends on completion of the remaining actions.
Synthetic illustration only; shows a different sector using plain language to describe mitigation and adaptation actions, governance ownership, delivery status, budgeted resources, and expected effectiveness.
How companies report SB261-RISK-MITIGATION-ADAPTATION in practice
Real reports where this topic is disclosed. These are report practice, not exact disclosure templates to copy.
CSX Corporation
Ground Transportation — Railroads · United States · 2024
CSX Corporation’s 2024 Sustainability Report includes evidence of adaptation measures related to climate risk mitigation, specifically mentioning the integration of climate-related risks with enterprise risk management and engagement with Risk Leaders to prepare for nationwide impacts (p.48). However, the report does not provide clear information on the governance owner responsible for these adaptation measures, with only related context found but no explicit disclosure (p.10). Additionally, there is no quotable evidence regarding the expected effectiveness, implementation status, resources allocated, or specific risk reduction measures for adaptation in the report.
Ingersoll Rand Inc.
Electrical Equipment and Machinery · United States · 2024
Ingersoll Rand’s 2024 Sustainability Report provides some context on governance related to climate risk management, mentioning enterprise risk management and board supervision over climate-related risks (p.64, p.71). The report also references the need to adopt adaptation measures and indicates plans to implement them if necessary, though details on resources allocated or specific implementation status are not clearly disclosed (p.73). Notably, there is no explicit information on risk mitigation adaptation measures, their expected effectiveness, or specific risk reduction actions within the report.
Cargill
Food Production — Agricultural · United States · 2025
Cargill’s 2025 Impact Report references climate-related risks and its risk management process, including the use of an enterprise risk management framework and structured risk assessments (pp. 13, 111). The report mentions disclosure of Scope 1, Scope 2, and potentially Scope 3 greenhouse gas emissions in relation to risk management (p. 111). However, there is no evidence found regarding specific adaptation measures, governance ownership, resource allocation, implementation status, or expected effectiveness of risk mitigation actions related to SB 261 (no pages).
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Scenarios to work through
A finance team has approved a flood barrier upgrade for one warehouse and a heat-resilience plan for a distribution hub. The project note says the work is partly complete, but no one has named who oversees delivery or whether the budget is enough.
QShould the disclosure cover the actions taken, who is overseeing them, the current delivery stage, and the money set aside, even if some details are still being finalised?
Reveal model answer →Hide answer ↑Yes. A useful disclosure should describe the steps chosen to lower or adjust to climate-linked financial exposure, identify the person or group responsible for oversight, state how far implementation has progressed, and show the resources committed. If the budget or status is still changing, the preparer should use the latest supportable position and keep the wording aligned with internal evidence.
Why this matters · Cover the action, the owner, the stage of delivery, and the funding in a way that matches the evidence on file.
A risk committee has agreed to relocate some critical stock away from a coastal site and to add backup power at another facility. Management believes these steps will help, but there is no formal assessment yet showing how much risk reduction they are expected to deliver.
QCan the disclosure simply list the measures, or does it also need a plain statement of the expected effect of those measures?
Reveal model answer →Hide answer ↑It should do both. The disclosure is not complete if it only names the actions; it also needs a clear explanation of the likely effect those actions are expected to have on climate-related financial exposure. If the effect is uncertain, the preparer should say so in a measured way rather than implying a level of protection that has not been evidenced.
Why this matters · List the measures and explain, in plain terms, what they are expected to achieve.
A group has split responsibilities between the sustainability lead, the operations director, and the audit committee for different climate-risk actions. The team is unsure whether to name one person, several people, or the committee structure in the disclosure.
QHow should the preparer decide who to identify as the governance owner for the risk measures?
Reveal model answer →Hide answer ↑The disclosure should identify the governance arrangement that actually oversees the measures, using the organisation’s real decision-making structure. If one person has overall accountability, name that role; if oversight sits with a committee or a combination of leaders, describe that arrangement clearly and consistently with internal governance records.
Why this matters · Name the real oversight owner, not a generic title that does not match how decisions are actually governed.
A company has set aside USD 2.4 million for drought planning, equipment hardening, and staff training. Two of the projects are already underway, while the training programme is scheduled for next quarter, and the team is unsure how to present the mix of completed and planned work.
QShould the disclosure separate what has already started from what is still planned, while keeping the total resources allocated clear?
Reveal model answer →Hide answer ↑Yes. The preparer should describe the measures in a way that shows which actions are in progress and which are still pending, while also stating the total resources committed to the package. The key is to present a coherent picture of implementation rather than blending finished, ongoing, and future actions into one vague statement.
Why this matters · Show the current status of each measure and keep the total funding figure clear and consistent.
Framework references
Related framework references
How this disclosure maps across the major reporting frameworks.
California
SB261-RISK-MITIGATION-ADAPTATION
within California SB 261: Climate-Related Financial Risk Act
Open official source →Related & explore
Covered entity applicability → Guide ✓Climate-related financial risk disclosure → Guide ✓Implementation fee and administration →TCFD or equivalent framework alignment → Guide ✓Reporting gaps and completion plan →Biennial reporting timeline and enforcement status → Guide ✓Show all 6 related disclosures →
FAQ
Questions this page answers
For SB261-RISK-MITIGATION-ADAPTATION, what data points do I need to gather before drafting the disclosure?+−
The page says to prepare six datapoints: adaptation actions, an effectiveness view, an accountable owner, delivery stage, funding set aside, and risk reduction actions. Use those as the starting checklist before you draft anything.
How do I use the step-by-step 'how to prepare' section for SB261-RISK-MITIGATION-ADAPTATION?+−
Use it as a practical sequence for getting from raw inputs to a draft disclosure. The page is designed to help you organise the work, rather than just describe the topic in theory.
What should I include in the evidence pack for SB261-RISK-MITIGATION-ADAPTATION so I am assurance-ready?+−
The page includes an evidence pack with five items to support assurance readiness. Build your pack around those items so you can show where the disclosure data came from and how it was checked.
What are the six assurance claims to verify for SB261-RISK-MITIGATION-ADAPTATION?+−
The page says there are six assurance claims to verify, each framed around claim, risk and evidence. Use that structure to test whether the disclosure is supported and whether the evidence is complete enough for review.
What are the common reporting gaps or mistakes on the SB261-RISK-MITIGATION-ADAPTATION page?+−
The page lists common reporting gaps and mistakes to help you avoid weak or incomplete drafting. Check those before sign-off so you do not miss a required datapoint or leave the narrative too vague.
How can I use the Prep & Assurance workbook for SB261-RISK-MITIGATION-ADAPTATION?+−
The Download Centre includes a Prep & Assurance workbook in .xlsx format. Use it to organise the datapoints, track evidence, and prepare the disclosure in a way that is easier to review.
What is the printable Library Card for SB261-RISK-MITIGATION-ADAPTATION used for?+−
The Download Centre includes a printable Library Card in .pdf format. It is there as a practical companion to the page content, so you can keep the disclosure checklist and key prompts to hand while drafting.
How do I turn the SB261-RISK-MITIGATION-ADAPTATION data into a draft disclosure?+−
The page includes draft-output support with visualisation ideas, narrative starters and a content-index line. Use those to turn your prepared datapoints into a clear first draft rather than starting from a blank page.
What kind of synthetic example disclosure does the SB261-RISK-MITIGATION-ADAPTATION page show?+−
The page includes synthetic illustrative example disclosures, including a quantitative data table. Use them as a formatting and drafting guide only, not as a template for real-world values.
Can I reuse data prepared for ESRS E1 (Climate Change) for SB261-RISK-MITIGATION-ADAPTATION?+−
The page notes ESRS E1 (Climate Change) as the closest correspondence, so some data may be reusable. Treat that as a practical cross-reference, not as proof that the disclosure requirements are identical.
More questions this page can help with
SB261-RISK-MITIGATION-ADAPTATION checklist for sustainability manager: what do I need before drafting?SB261-RISK-MITIGATION-ADAPTATION evidence pack: what should I collect for assurance?SB261-RISK-MITIGATION-ADAPTATION workbook download: how do I use the xlsx file?SB261-RISK-MITIGATION-ADAPTATION common mistakes: what should I avoid in the disclosure?SB261-RISK-MITIGATION-ADAPTATION narrative starters: how do I write the first draft?SB261-RISK-MITIGATION-ADAPTATION content index line: what should it look like?SB261-RISK-MITIGATION-ADAPTATION accountable owner: who should own the data and sign-off?SB261-RISK-MITIGATION-ADAPTATION delivery stage and funding set aside: how should I report progress?SB261-RISK-MITIGATION-ADAPTATION effectiveness view: how do I describe whether actions are working?SB261-RISK-MITIGATION-ADAPTATION risk reduction actions: what counts as useful supporting information?SB261-RISK-MITIGATION-ADAPTATION from company reports: how do I use the linked examples?SB261-RISK-MITIGATION-ADAPTATION ESRS E1 correspondence: what data can be reused across frameworks?
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