Last updated: May 25, 2026. Sustainability reporting requirements in the United States are fragmented. There is no single federal ESG reporting law that applies to every company. The practical answer depends on whether the company is publicly listed, does business in California, operates high-emitting facilities, sells into regulated supply chains, or reports voluntarily to investors and customers.
Short answer: ESG and sustainability reporting are not mandatory for every company in the USA. The SEC adopted climate-related disclosure rules in March 2024, but the rules were stayed, the SEC ended its legal defense in March 2025, and on May 29, 2026 the SEC proposed rescinding the rules in full. For now, the most important broad US climate disclosure regime is California's Climate Accountability Package. SB 253 applies to U.S.-based entities with more than $1 billion in annual revenue that do business in California. SB 261 covers U.S.-based entities with more than $500 million in annual revenue that do business in California, although CARB is not currently enforcing SB 261 pursuant to a court order.
Is ESG reporting mandatory in the USA?
Sometimes, but not for every business. A small private company with no regulated emissions source and no large-customer request may not have a mandatory sustainability report. A large U.S.-based company doing business in California, a public company preparing investor disclosures, a high-emitting facility, or a supplier responding to an enterprise customer may have very real reporting work to do.
Which US reporting path applies?
The simplest way to assess U.S. sustainability reporting is to start with the company's trigger, not with a generic ESG framework:
- U.S. public company: existing SEC material-risk disclosure obligations still matter. The 2024 SEC climate rule is stayed and now proposed for rescission, so there is no current compliance deadline under that climate rule.
- U.S.-based entity with more than $1B revenue doing business in California: check California SB 253 GHG emissions reporting. Scope 1 and Scope 2 first-year reporting is due August 10, 2026. Scope 3 begins in 2027.
- U.S.-based entity with more than $500M revenue doing business in California: check California SB 261 climate-related financial risk reporting. The statutory framework exists, but CARB says it is not currently enforcing SB 261 and reporting is voluntary while the court order applies.
- Facility or supplier covered by EPA GHGRP: check EPA Greenhouse Gas Reporting Program reporting under 40 CFR Part 98. This is facility- or supplier-level GHG reporting, not a full corporate sustainability report.
- Supplier to Microsoft, Google, Amazon, Salesforce, Dell, Cisco, HP, or another large buyer: check the customer request. It may ask for emissions data, clean-energy evidence, CDP/EcoVadis information, reduction plans, or supporting documentation.
- U.S. group with EU listings, subsidiaries, or material EU operations: check potential EU sustainability reporting exposure, including CSRD-related obligations, separately from U.S. domestic requirements.
The federal picture: SEC climate rule proposed for rescission
The SEC adopted climate-related disclosure rules in March 2024. As adopted, those rules would have required public-company climate disclosures covering climate-related risks, governance, risk management, targets, transition plans, certain financial statement effects, and Scope 1 and Scope 2 greenhouse gas emissions for large accelerated and accelerated filers when material.
The status has changed materially. The SEC stayed the climate disclosure rules on April 4, 2024 pending litigation. On March 27, 2025, the SEC voted to end its defense of the rules. On May 29, 2026, the SEC proposed rescinding the climate disclosure rules in their entirety.
That means companies should not treat the 2024 SEC climate rule as an active compliance deadline. They should still monitor the rulemaking and litigation, and public companies should still consider climate-related information where it is material under existing securities-law disclosure principles.
California SB 253: emissions reporting
California's SB 253, the Climate Corporate Data Accountability Act, is now the most important broad U.S. climate disclosure requirement for many large companies. It applies to U.S.-based entities with more than $1 billion in annual revenue that do business in California. The law requires annual public reporting of greenhouse gas emissions.
CARB's initial regulation, approved in February 2026, establishes August 10, 2026 as the first-year SB 253 reporting deadline. That first year covers Scope 1 and Scope 2 emissions. Scope 3 emissions reporting begins in 2027.
Companies preparing for SB 253 should focus on:
- confirming whether they are a U.S.-based entity that does business in California;
- testing the revenue threshold using the relevant gross receipts basis;
- calculating Scope 1 and Scope 2 emissions for the relevant reporting year;
- building a Scope 3 screening process before the 2027 phase-in;
- documenting activity data, emission factors, assumptions, exclusions, and calculation methods; and
- preparing for assurance requirements and internal controls over emissions data.
California SB 261: climate-related financial risk reporting
SB 261, the Climate-Related Financial Risk Act, applies to U.S.-based entities with more than $500 million in annual revenue that do business in California, subject to statutory exclusions such as certain insurance businesses. The law requires a biennial climate-related financial risk report addressing climate risks and measures adopted to reduce and adapt to those risks.
The statutory framework points to TCFD-style disclosure or an equivalent reporting requirement, including IFRS Sustainability Disclosure Standards issued by the ISSB. In practice, that means companies should be ready to describe governance, strategy, risk management, metrics, targets, and resilience to physical and transition climate risks.
The current enforcement status is important. CARB states that, pursuant to a court order, it is not enforcing SB 261 and reporting is voluntary. Companies that are likely in scope should still use the pause to prepare, especially if investors, lenders, insurers, customers, or parent-company reporting teams expect climate-risk information.
EPA GHGRP is different from a sustainability report
The EPA Greenhouse Gas Reporting Program is a separate federal reporting program. It generally applies to certain facilities that emit at least 25,000 metric tons of CO2e per year, certain suppliers of fossil fuels or industrial greenhouse gases, and facilities that inject CO2 underground.
GHGRP data is reported using EPA methods under 40 CFR Part 98. It is useful emissions data, but it is not the same thing as a corporate sustainability report. The program is facility- and supplier-focused, does not cover all company emissions, and does not include purchased electricity Scope 2 emissions in the same way a company GHG inventory would.
Voluntary frameworks still matter
Even where reporting is not mandatory, many U.S. companies continue to report under recognized frameworks because investors, lenders, enterprise customers, procurement teams, and rating platforms ask for comparable sustainability information.
The most common frameworks and standards to consider are:
- ISSB IFRS S1 and IFRS S2 for investor-oriented sustainability and climate disclosure;
- TCFD for climate governance, strategy, risk management, metrics, and targets, especially where SB 261-style risk reporting is relevant;
- GHG Protocol for Scope 1, Scope 2, and Scope 3 emissions accounting;
- GRI Standards for broader impact-oriented sustainability reporting; and
- CDP or EcoVadis where customers or investors ask for platform-based disclosure.
What companies should do now
The best first step is not to start writing a sustainability report. It is to identify which reporting route applies. A practical U.S. reporting readiness check should answer:
- Are we a public company, and do climate risks need to be addressed under existing material-risk disclosure principles?
- Do we do business in California, and do we cross the SB 253 or SB 261 revenue thresholds?
- Do any facilities or supplied products trigger EPA GHGRP reporting?
- Do customers, investors, lenders, parent companies, or rating platforms require emissions or ESG data?
- Do we have EU exposure that may create a separate CSRD or ESRS reporting obligation?
- Who owns the data across finance, legal, facilities, operations, procurement, HR, EHS, and sustainability?
- What evidence will support the numbers if the data is reviewed, assured, or challenged?
How Keslio can help
Keslio helps teams turn sustainability reporting requirements into a scoped reporting project, not an open-ended ESG exercise. Depending on the trigger, we can support:
- applicability checks for U.S. sustainability reporting requirements and customer requests;
- GHG emissions calculations for Scope 1, Scope 2, and relevant Scope 3 categories;
- data request checklists and evidence trackers for California, EPA, investor, or customer reporting;
- sustainability reporting and communications for voluntary or investor-facing reports;
- climate-risk disclosure preparation aligned with TCFD or ISSB-style expectations; and
- supplier request support where the reporting trigger comes from a major customer rather than a regulator.
This guide is not legal advice. If you are close to a statutory threshold, facing a formal regulatory filing, or responding to counsel-led disclosure work, Keslio can support the sustainability data and reporting workstream while legal counsel confirms the legal obligation.
Sources and further reading
- SEC proposal to rescind climate-related disclosure rules, May 29, 2026
- SEC vote to end defense of climate disclosure rules, March 27, 2025
- CARB approval of initial California climate transparency regulation, February 26, 2026
- California SB 253 bill text
- California SB 261 bill text
- EPA Greenhouse Gas Reporting Program overview
