CA SB261

Requires covered entities (businesses with over $500 million in annual revenue doing business in California) to prepare and publicly disclose climate-related financial risk reports biennially starting January 1, 2026, following the Task Force on Climate-related Financial Disclosures framework or equivalent standards.

Covered entities must disclose their climate-related financial risks and measures adopted to reduce and adapt to those risks, with reports made publicly available on their own websites.

State Air Resources Board shall contract with a climate reporting organization to prepare biennial public reports analyzing climate-related financial risks by industry and identifying inadequate disclosures.

Creates the Climate-Related Financial Risk Disclosure Fund financed by annual fees paid by covered entities to cover the State Board's administration costs, with fees capped at actual and reasonable expenses.

Authorizes the State Board to impose administrative penalties up to $50,000 per reporting year for covered entities that fail to publicly disclose reports or publish inadequate disclosures, with penalties imposed through administrative hearings.