TCFD & California SB-261 Climate Risk Consulting

Climate Reporting
Without Confusion

Climate risk reporting has quickly moved from a sustainability exercise to a business legal requirement. Many companies feel the pressure to comply, but the process often feels unclear, time-consuming, and disconnected from day-to-day operations.

Third Partners removes that uncertainty. We guide companies through SB-261 reporting using a structured process aligned with the TCFD framework. The outcome is a clear report that meets regulatory expectations while supporting leadership, investor communication, and long-term planning.

“Third Partners did a great job on our SB-261 disclosure. As a client, it was an easy project plan for us to follow and their use of technology tools made the process quite efficient and the result exceeded our expectations.”
– Janine Musorafite, Chief Compliance Officer at Epic Staffing Group

What Is SB-261?

California SB-261 is a state law that requires certain companies doing business in California to publicly disclose how climate-related risks could impact their financial performance and long-term stability.

The law applies to U.S.-based and global companies that generate $500 million or more in annual revenue and operate in California, regardless of where they are headquartered. This includes many privately held companies, not just publicly traded firms.

Covered companies must publish a climate risk report aligned with a recognized framework such as TCFD, making climate risk part of formal financial and risk governance rather than a marketing or sustainability exercise.

What is the goal of SB-261?

California passed SB-261 because climate risks were increasingly affecting real business decisions, yet many companies were not clearly evaluating or explaining those risks. As disruptions to operations, supply chains, and long-term planning became more common, lawmakers pushed for clearer, more accountable disclosure.

These disclosures are increasingly used by regulators, investors, lenders, and business partners to assess risk management, governance, and resilience. Many organizations struggle to determine where to begin, how much rigor is required, and what makes a disclosure credible.

That is where Third Partners provides structure, expertise, and confidence.

Why TCFD Is the Easiest Path to SB-261 Compliance

Third Partners uses the TCFD framework as the foundation for compliance because it is practical and widely recognized by investors and regulators.

TCFD alignment helps companies:

  • Meets SB-261 disclosure requirements
  • Is familiar to investors and regulators
  • Connects climate risks to real business decisions

A TCFD-aligned SB-261 report helps companies comply now while staying prepared for future reporting expectations.

Our Approach to Compliance

First, we look for ways your business can get more value from climate risk reporting than just a box-checking exercise. For example, we might find an opportunity to look into reducing insurance costs or bringing a company disaster recovery policy up to best practice. Next, we keep the process focused and efficient so your internal teams are not overwhelmed.

Our approach helps companies:

  • Understand where climate risks may affect their business
  • See how those risks connect to operations and locations
  • Communicate clearly with investors, customers, and partners

Talk with our team about the fastest path to compliant, defensible disclosure.

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Built For Companies Without Large ESG Teams

This service works well for:

Privately held
companies
Brands and
manufacturers
Companies new to climate or
sustainability reporting
Companies new to climate or

sustainability reporting

What you get: A SB-261 Compliant TCFD Climate Risk Report

You receive a climate risk report designed to meet SB-261 requirements and align with TCFD best practices. The report is assurance-ready and structured to support internal review, legal sign-off, and public disclosure.

The Report Covers All Four TCFD Pillars:

  • Governance: How climate risks are overseen within your organization.
  • Strategy: How climate risks could affect your business, planning, and long-term direction.
  • Risk Management: How your company identifies and manages climate-related risks.
  • Metrics and Targets: How you track and monitor relevant climate risks where applicable.

Climate Scenario Analysis Included

A critical component of SB-261 compliance is climate scenario analysis. We design and execute a practical, defensible two-scenario approach that regulators and investors expect.

Third Partners includes:

  • A 2°C scenario that reflects a lower-carbon future
  • A business-as-usual scenario that reflects higher climate risk

These scenarios help clarify where your business may face material financial risk and where strategic adjustments may be needed.

How the Engagement Works

Our process is designed to be clear, structured, and deadline-driven.

Phase

  • Kick-off & RFI
  • Drafting
  • Finalization

Performance Level

  • Kick-off meeting, readiness assessment, and issuing a structured Request for Information (RFI).
  • Apply climate risk data from location-specific sources and internal client data. Delivery of a full draft report.
  • Delivery of final copy.

Third Partners Role

  • Lead meeting, issue RFI, acquire public information.
  • Technical analysis, TCFD drafting.
  • Final revisions, Quality Assurance.

Harbor View/Client Role

  • Provide staff time, data response to RFI, share basic operational information.
  • Review the draft and provide feedback on copy, tone, and content.
  • Internal legal approvals, final internal edits, graphic design, and submission to the State of California.
Phase Performance Level Third Partners Role Harbor View/Client Role
Kick-off & RFI
Kick-off meeting, readiness assessment, and issuing a structured Request for Information (RFI).
 Lead meeting, issue RFI, acquire public information. Provide staff time, data response to RFI, share basic operational information.
Drafting Apply climate risk data from location-specific sources and internal client data. Delivery of a full draft report. Technical analysis, TCFD drafting. Review the draft and provide feedback on copy, tone, and content.
Finalization Delivery of final copy. Final revisions, Quality Assurance. Internal legal approvals, final internal edits, graphic design, and submission to the State of California.

Optional Strategic Add-On Services

Many clients choose to go beyond baseline compliance after completing their SB-261 report. These services are scoped separately and can be added as needed.

Optional services include:

Add-On Service

  • Gap Analysis & Benchmarking
  • Strategic Roadmap & Action Plan
  • Additional Revisions
  • Governance Consulting

Focus

  • Study of peer companies and global leaders to identify data and control weaknesses.
  • Develop a step-by-step performance improvement plan based on gap analysis, including prioritization, goal-setting, and accountability.
  • Additional round(s) of revisions – lending our specific climate risk and business strategy expertise – to the core report in concert with your in-house or outside counsel.
  • Need help engaging your employees or fixing specific issues with policies or standard operating procedures? We can help.
Add-On Service Focus
Gap Analysis & Benchmarking Study of peer companies and global leaders to identify data and control weaknesses.
Strategic Roadmap & Action Plan Develop a step-by-step performance improvement plan based on gap analysis, including prioritization, goal-setting, and accountability.
Additional Revisions Additional round(s) of revisions – lending our specific climate risk and business strategy expertise – to the core report in concert with your in-house or outside counsel.
Governance Consulting Need help engaging your employees or fixing specific issues with policies or standard operating procedures? We can help.

SB-261 and TCFD Reporting FAQ

SB-261 applies to large companies that do business in California and meet specific revenue thresholds. If your company operates in or sells into California and meets the criteria, you may be required to publish a climate risk report.

If you are unsure whether SB-261 applies to your business, Third Partners can help you assess your obligations.

SB-261 applies to both public and privately held companies. Many privately owned brands and manufacturers will be required to comply, even if they have never completed climate reporting before.

No. This service is designed for companies without dedicated sustainability teams. Third Partners leads the process and relies on information you already have whenever possible, keeping internal time commitments reasonable.

Most of the information comes from existing operational, financial, and location data. We provide a clear and focused request so your team knows exactly what is needed and what is not.

Typically 2 to 6 weeks from the first time we talk until you receive a draft report. Third Partners structured process moves efficiently and meets statutory timelines.

A TCFD-aligned SB-261 report creates a strong foundation that can support future regulatory, investor, or customer disclosure requests, reducing the need to start from scratch later.

Ready to Meet Your SB-261 Deadline With Confidence?

Our process is designed to produce an assurance-ready report while minimizing internal time and disruption.
Contact Third Partners to discuss your SB-261 reporting needs.

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