California Climate Corporate Data Accountability Act (SB 253)

Status, September 2026: SB 253 is in force. CARB approved its first regulations in February 2026, withdrew them in June for changes, and re-proposed them in July; the first Scope 1 and 2 reports are now due November 10, 2026. Scope 3 reporting starts in 2027, and CARB has proposed limiting it to five categories. Source: Mayer Brown.

What Is SB 253?

The Climate Corporate Data Accountability Act (Senate Bill 253), signed by Governor Newsom in October 2023, requires large companies doing business in California to publicly disclose their greenhouse gas emissions across Scopes 1, 2, and 3. It is one of the most ambitious corporate emissions disclosure laws in the United States.

SB 253 fills a critical gap in US climate disclosure — it covers private companies (unlike the SEC's 2024 climate rule, which never took effect) and mandates Scope 3 reporting (which the SEC rule dropped). For many large US companies, this will be their first mandatory emissions disclosure obligation.

Who It Applies To

SB 253 applies to any entity that:

• Is a partnership, corporation, LLC, or other business entity formed under US law (any state, the District of Columbia, or federal law), AND
• Has total annual revenues exceeding $1 billion, AND
• Does business in California as defined by the California Revenue and Taxation Code

CARB's regulation ties "doing business in California" to the Franchise Tax Board test in Revenue and Taxation Code section 23101, applied entity by entity; being organized in California or exceeding a threshold of California sales can qualify a company. This captures companies headquartered in any state that have significant California operations or sales. Entities formed outside the United States are not covered directly.

CARB's preliminary list of potentially covered companies, published in September 2025, named just over 2,000 companies for SB 253 once duplicates are removed (Davis Polk count). CARB says the list is not exhaustive.

Key Requirements

• Scope 1 emissions: Direct emissions from owned or controlled sources
• Scope 2 emissions: Indirect emissions from purchased electricity, heat, and steam
• Scope 3 emissions: Other indirect emissions across the value chain, starting in 2027. CARB has proposed requiring five of the 15 GHG Protocol categories at first: purchased goods and services, fuel- and energy-related activities, waste, business travel, and employee commuting
• Methodology: Must follow the GHG Protocol Corporate Standard and Corporate Value Chain Standard
• Assurance: The law requires independent assurance of Scope 1 and 2 data, rising from limited to reasonable assurance in 2030, and limited assurance of Scope 3 from 2030. CARB is not requiring assurance for the first reports in 2026
• Public disclosure: Reports will be published on a publicly accessible platform administered by the California Air Resources Board (CARB)

Timeline

• October 2023: SB 253 signed into law
• September 2024: SB 219 gives CARB until July 1, 2025 to adopt regulations, lets CARB set the Scope 3 schedule, and allows parent-level reports; the 2026 start date is unchanged
• February 2026: CARB approves its first regulation (fees, definitions, and the first deadline)
• June–July 2026: CARB withdraws the rule for changes and re-proposes it
• November 10, 2026: First Scope 1 and Scope 2 reports due (for FY2025 data), with no assurance required
• 2027: Scope 3 reporting begins (for FY2026 data); CARB has proposed starting limited assurance of Scope 1 and 2
• 2030: Reasonable assurance for Scope 1 and 2 and limited assurance for Scope 3

Check CARB's website for the latest regulatory timeline.

Compliance Steps

1. Determine applicability: Confirm whether your entity meets the revenue and California business thresholds
2. Build GHG inventory: Establish comprehensive Scope 1, 2, and 3 measurement following GHG Protocol
3. Scope 3 preparation: Begin Scope 3 measurement early — it's the most challenging and time-consuming component
4. Engage assurance provider: Select an assurance provider familiar with GHG Protocol requirements
5. Data systems: Build or upgrade systems for annual emissions calculation and reporting
6. Monitor CARB regulations: Track CARB's rulemaking for specific reporting format and submission requirements
7. Coordinate with other frameworks: Align SB 253 reporting with CSRD, CDP, and SBTi requirements to avoid duplication

Penalties

• CARB enforcement: Administrative penalties for non-compliance or inaccurate reporting
• Maximum penalty: Up to $500,000 per reporting year
• No private right of action: SB 253 does not create a private cause of action for citizens to sue companies
• Safe harbor: Limited safe harbor for Scope 3 emissions reporting, acknowledging data challenges

How Council Fire Can Help

Council Fire helps companies prepare for SB 253 compliance — from GHG inventory development (including the challenging Scope 3 categories) through assurance readiness and integration with other reporting frameworks. Contact us for SB 253 support.