CARB Updates on California’s SB 253 Climate Disclosure Rule – April 2026

CARB’s March 23 workshop outlined SB 253 implementation, first-year expectations, reporting, assurance, and Scope 3 requirements for 2027 onward periods.

In February 2026, the California Air Resources Board (CARB) formally approved the scope, fee structure, and August 10 reporting deadline for 2026 – the first reporting year under the California Climate Corporate Data Accountability Act (SB 253). Building on that milestone, CARB’s March 23 public workshop focused on requirements for 2027 and beyond, outlining proposed implementation concepts and requesting public feedback.

The March 23 session marked CARB’s fourth workshop on SB 253 and SB 261. ISS-Corporate has covered each stage of the rulemaking process, with summaries of the earlier workshops available on our blog: Workshop 1, Workshop 2, and Workshop 3.

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Key Takeaways from CARB’s March 2026 SB 253 Workshop

CARB presented the following concepts for SB 253 reporting for 2027 and beyond:

• Organizational Boundaries: CARB proposed two approaches for setting boundaries – equity share approach and control approach.
• Scope 1 and 2 Templates: CARB will develop standardized reporting templates mandatory beginning in 2027.
• Scope 3 Reporting: Required starting in 2027. CARB presented three options under consideration: (1) Broad Applicability, (2) Sectoral Phase-In, and (3) Category Phase-In.
• GHG Accounting Methods: CARB proposed four potential accounting methods and four emissions factor data sources companies may choose from.
• Assurance Standards: Limited assurance is required on Scope 1 and 2 emissions beginning in 2027. CARB proposed five existing standards for companies to choose from.

SB 253 Initial-Year Reporting Expectations for 2026

The Climate Corporate Data Accountability Act requires companies to annually disclose Scope 1, 2, and 3 GHG emissions. This applies to U.S.-based entities doing business in California with over $1 billion in annual revenue. CARB’s current definitions for “doing business in California” and “revenue” can be found in ISS-Corporate’s previous blog post here.

For first-year reports due on August 10, 2026, companies must submit Scope 1 and Scope 2 emissions from the previous fiscal year, with no assurance required. If a company’s fiscal year ends between January 1 and February 1, 2026, the company will report data from the fiscal year ending in 2026. If its fiscal year ends between February 2 and December 31, 2026, the entity will report data from the fiscal year ending in 2025. Each entity will have at least six months after the end of its fiscal year to submit a report. While there is a draft template available for companies to submit Scope 1 and Scope 2 emissions, this template is for voluntary use in 2026.

In December 2024, CARB issued an Enforcement Notice outlining the following:

• Companies that were not collecting or planning to collect emissions data when CARB issued its Enforcement Notice are not required to report Scope 1 and 2 emissions in 2026. These companies must submit a written statement on company letterhead confirming this status.
• Entities that were collecting Scope 1 and Scope 2 emissions when the notice was issued are permitted to report the Scope 1 and Scope 2 emissions data they already possess or were already collecting as of December 5, 2024 for the first year.

CARB has stated that it will not take enforcement action against incomplete Scope 1 and Scope 2 reporting in the first year as long as companies make a “good faith effort” to comply.

At the March 23 Workshop, CARB previewed that they plan to release additional updates on 2026, including the reporting format, submission process, and when a portal will be available for submissions. Additionally, while CARB also stated its intent to publish guidance for extension requests, it mentioned this guidance will apply in limited circumstances.

Proposed SB 253 Climate Disclosure Rules for 2027 and Beyond

CARB has recommended companies follow the GHG Protocol when doing emissions calculations. The following provides an overview of CARB’s working proposals for 2027 and onward, on which it has requested feedback.

Organizational Boundary Options Under SB 253

CARB presented two approaches companies may use for setting organizational boundaries:

• Equity Share Approach: Account for emissions based on company’s percentage of ownership in an operation.
• Control Approach: Account for 100% of emissions from operations over which a company has financial or operational control.
  • Financial Control: When a company can direct the financial and operating policies of the operation to gain economic benefits.
  • Operational Control: When a company has the authority to introduce and implement operating policies for the operation.

CARB is requesting feedback on whether there are other organizational boundary setting approaches that it should consider and how companies should disclose why it chose a certain organizational boundary.

Standardized Scope 1 and Scope 2 Reporting Templates

CARB plans to develop mandatory standardized templates for 2027 reporting and beyond. In October 2025, CARB shared a draft template for Scope 1 and Scope 2 reporting for companies to use on a voluntary basis. Based on this draft, CARB has already received public feedback on topics including emissions intensity per dollar of revenue, organizational boundary flexibility, and flexibility to report using different global warming potential (GWP) values. CARB is looking for additional feedback on what other information should be considered for reporting templates.

Scope 3 Emissions Reporting Phase-In Options

Scope 3 emissions will be required starting in 2027. CARB has proposed and is requesting feedback on three potential options for how to phase-in Scope 3 reporting:

• Option 1: Broad Applicability – All reporting entities report on all 15 categories with flexibility to not report categories that a reporting entity deems de minimis, with appropriate explanation.
• Option 2: Sectoral Phase-In – Reporting would only be required from sectors responsible for the largest share of California’s emissions starting in 2027. This would initially cover transportation, technology and energy, cement production, and other manufacturing activities, with other sectors being phased in at later dates.
• Option 3: Category Phase-In – All companies would be required to report on only the top five categories that apply broadly across all sectors and that are most feasible to estimate using existing practices. The remaining 10 categories would be reported on a voluntary basis in 2027, with more becoming mandatory in future reporting years. The five categories required in 2027 would be:
  • Category 6: Business Travel
  • Category 1: Purchased Goods and Services
  • Category 3: Fuel and Energy Related Activities
  • Category 7: Employee Commuting
  • Category 5: Waste Generated During Operations

GHG Accounting Methods and Emission Factors

CARB plans to allow for some flexibility regarding Scope 3 accounting methods, though companies should state which method they use. CARB has proposed and is seeking feedback on four accounting methods:

• Spend-Based: Based on monetary values of goods and services. Calculated by multiplying the financial value of a purchased good or service by an emissions factor that represents the average emissions per unit of currency spent.
• Activity-Based: Based on physical measures of activity. Calculated by multiplying measures of activity (e.g., kilometers traveled) by relevant emission factors.
• Supplier-Specific: Based on primary emissions or activity data collected directly from suppliers, typically at a product or process level.
• Hybrid: A combination of the above approaches.

CARB emphasized that there are numerous data sources already available for emissions factors and proposed the following sources for Scope 3 categories:

• EPA’s Emissions & Generation Resource Integrated Database (eGRID)
• IPCC Emissions Factor Database (EFDB)
• EPA’s Emissions Factors (EF) Hub
• U.S. Environmentally-Extended Input-Output (USEEIO)

Limited Assurance Standards for SB 253 Reporting

Reporting entities are required to obtain limited assurance on Scope 1 and Scope 2 emissions starting in 2027. CARB has proposed and is seeking feedback on approving the following standards for SB 253 assurance, which it emphasized are already accepted in various other jurisdictions:

• AA1000 Assurance Standard (AA1000AS v3)
• AICPA (AT-C Section 210 (review engagement: limited) or AT-C 205 (examination engagement: reasonable)
• ISAE 3000 (Revised) and ISAE 3410 (until December 2026)
• ISSA 5000 (effective December 2026)
• ISO 14064-3: 2019 (ISO 14065 / ISO 14066 – provider qualifications)

CARB’s Economic Analysis

CARB is required to conduct a Standardized Regulatory Impact Assessment (SRIA) for regulations or regulatory amendments that have an estimated economic impact on California businesses and individuals exceeding $50 million in any 12-month period after adoption. CARB examined costs related to reporting, including collecting data across the value chain, data analysis, developing GHG inventories, preparing and submitting reports, and obtaining third-party assurance.

To estimate the costs, CARB used data from the SEC’s climate disclosure rulemaking process. Please see below CARB’s initial estimates for annual compliance costs per entity:

CARB expects initial costs in year one to be higher than the ongoing costs, as companies learn more about reporting and establish their own internal processes. CARB estimates the maximum annual cost per entity across operations will be approximately less than 0.02% of the $1 billion maximum revenue threshold.

Beyond SB 253: State-Level Momentum for Mandatory Climate Disclosure

As of today, the California’s Climate Laws represents the most ambitious climate disclosure requirements in the U.S. and impact thousands of companies both nationally and globally. However, other U.S. States are starting to follow suit. In February, the New York State Senate passed the Climate Corporate Data Accountability Act (2025 – S9072A). This act mirrors its California namesake and asks companies formed under U.S. Law, doing business in New York, and with a revenue of over $1 billion to annually disclose Scopes 1, 2, and 3 GHG emissions. Other states have drafted similar bills including Colorado (HB25-1119), Illinois (HB3673), and New Jersey (S679).

With California’s SB 253 as the first and most ambitious U.S. climate data regulation, it has the potential to serve as a model for other states as implementation moves forward. CARB has consistently emphasized its commitment to ongoing stakeholder engagement throughout the rulemaking process. CARB’s public docket for feedback on the concepts proposed during this workshop is open until June 1.

With SB 253 implementation accelerating and Scope 3 reporting on the horizon, now is the time for companies to strengthen their emissions data and reporting infrastructure. Learn how ISS‑Corporate’s carbon accounting and corporate sustainability solutions support accurate, regulation‑ready emissions calculation and reporting—helping companies prepare for compliance with confidence as requirements evolve.