California SB 253 Update: 2026 Reporting and 2027 Rules

CARB’s latest SB 253 workshop provided updated guidance for 2026 reporting while previewing proposed 2027 requirements, including phased Scope 3 disclosures, enhanced transparency, recalculations, and assurance requirements.

The California Air Resources Board (CARB) hosted a public workshop on July 21 to discuss the California Climate Corporate Data Accountability Act (SB 253). This workshop was the fifth in a series hosted by CARB on SB 253 and SB 261.^[1] ISS-Corporate’s summaries of the previous workshops are available in the following links: Workshop 1, Workshop 2, Workshop 3, and Workshop 4.

In February 2026, CARB formally approved the scope, fee structure, and August 10 reporting deadline for the inaugural 2026 reporting year. However, in June 2026, CARB released a notice of a forthcoming rulemaking update proposing a shift from the August 10 deadline to November 10 deadline.

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During the workshop, CARB clarified the timeline and next steps for 2026 reporting but dedicated most of the session to presenting proposals and soliciting stakeholder feedback regarding reporting requirements for 2027 onwards.

CARB’s Latest SB 253 Updates at a Glance

CARB presented the following proposed concepts for SB 253 reporting for 2027 and subsequent years:

• Regulatory approach & general requirements: CARB indicated that future SB 253 requirements will remain closely aligned with the Greenhouse Gas Protocol (GHGP), while incorporating some California-specific clarifications.
• Emissions disclosure requirements: CARB proposed more structured emissions disclosure requirements, including proposed guidance for biogenic emissions and a phased approach to Scope 3 reporting. This approach will initially require disclosure of the five most frequently reported categories, while allowing voluntary reporting of additional categories.
• Quantification methodology & data quality: CARB emphasized increased transparency regarding emissions calculations, encouraging disclosure of data sources, assumptions, uncertainties, and methodologies used to support reported emissions figures.
• Changes, restatements & recalculations: CARB proposed clearer expectations around when companies should recalculate prior-year emissions and how methodological changes should be disclosed to ensure year-over-year comparability.
• Assurance & verification requirements: CARB continued to refine its proposed assurance framework, including expectations for third-party verification and assurance standards.

What Are the SB 253 Reporting Requirements for 2026?

The Climate Corporate Data Accountability Act mandates companies to annually disclose Scope 1, 2, and 3 greenhouse gas (GHG) emissions. This requirement applies to U.S.-based entities doing business in California with annual revenue exceeding $1 billion. CARB’s current definitions for “doing business in California” and “revenue” are available in ISS-Corporate’s previous blog post here.

CARB announced its intention to postpone the initial reporting deadline for SB 253 from August 10 to November 10, 2026, providing companies with additional time to prepare disclosures and implement forthcoming clarifications and guidance.

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

• Companies not actively collecting or planning to collect emissions data at the time of the Enforcement Noticeissuance are exempt from reporting Scope 1 and 2 emissions in 2026. These companies must submit a written statement on company letterhead confirming this status.
• Entities collecting Scope 1 and Scope 2 emissions data as of December 5, 2024 may report the data already collected for the initial reporting year.

CARB has stated that it will not pursue enforcement action for incomplete Scope 1 and Scope 2 reporting during the first reporting year, provided companies demonstrate a “good faith effort” towards compliance.

To support reporting entities for 2026 disclosures, CARB is developing an online reporting platform and indicated that it intends to release additional resources by September 1, 2026. These resources will include guidance materials, submission instructions, and a video tutorial explaining how to use the reporting system. CARB indicated that these materials are designed to assist companies in navigating the reporting and fee submission processes ahead of the November deadline. Further regulatory requirements for 2027 and subsequent years will continue to be developed through the established rulemaking process.

What Changes Is CARB Proposing for SB 253 Reporting in 2027?

CARB anticipates releasing a staff proposal, including complete draft regulatory text, later this fall. This proposal will be subject to a 45-day public comment period prior to board consideration at a public meeting. The following provides an overview of CARB’s current working proposals for 2027 and beyond.

Regulatory Approach & General Requirements

CARB indicated that future requirements under SB 253 will remain closely aligned with the GHGP, which the agency considers the foundational framework for greenhouse gas accounting and disclosure. CARB emphasized that the proposal is intended to facilitate interoperability with other climate reporting requirements and reflects the broader global transition from voluntary to mandatory climate disclosure. The proposed regulatory concepts generally fall into three categories: provisions directly implementing GHGP requirements, provisions incorporating GHGP recommendations, and California-specific clarifications designed to improve consistency and enforceability. As a result, companies already reporting under established GHG accounting frameworks may leverage their existing processes and methodologies to achieve SB 253 compliance.

A key area of stakeholder discussion was the ongoing revision to the GHGP’s Scope 2 Guidance. CARB noted its intention to reference the GHGP wherever possible; however, amendments to the protocol will not be automatically incorporated into the regulation. As a result, CARB is currently proposing to rely on the 2015 Scope 2 Guidance in effect at the time of this writing, with future alignment to updated GHGP guidance likely requiring a separate regulatory update. This approach aims to provide regulatory certainty for reporters but may result in temporary discrepancies between California’s requirements and future GHGP updates as climate accounting standards continue to evolve.

Emissions Disclosure Requirements

CARB proposed more detailed disclosure requirements for Scopes 1, 2, and 3 emissions, prioritizing enhanced transparency, consistency, and comparability across reporting entities. Proposed Scope 1 and 2 disclosure requirements include:

• Reporting Scope 2 emissions disaggregated by source type (e.g., electricity, steam, heating, and cooling).
• Reporting both market-based and location-based Scope 2 emissions.
• Disclosing organizational boundaries, quantification methodologies, emissions factors, and calculation tools used to develop emissions inventories.
• Explaining any exclusions or limitations that could affect the interpretation of reported emissions data.

A key focus of the workshop concerned CARB’s proposed phased approach to Scope 3 reporting. Recognizing that companies are at different levels of readiness, CARB is proposing that reporting entities initially disclose emissions from five commonly reported categories beginning in 2027 depending on materiality:

• Purchased Goods and Services (Category 1)
• Fuel- and Energy-Related Activities (Category 3)
• Waste Generated in Operations (Category 5)
• Business Travel (Category 6)
• Employee Commuting (Category 7)

CARB indicated that these categories were selected due to their broad applicability across industries and the relative maturity of their calculation methodologies. Companies would still be permitted to voluntarily disclose the remaining ten Scope 3 categories, providing flexibility while creating a pathway toward more comprehensive value chain emissions reporting over time. For the required categories, companies would also be required to disclose key supporting information, including calculation methodologies, data types used, emissions exclusions, and the percentage of emissions calculated using primary value chain data.

Quantification Methodology & Data Quality

CARB proposed greater transparency regarding emissions calculations, requiring companies to disclose key methodological inputs, including organizational boundaries, consolidation approaches, Global Warming Potential (GWP) values, emissions factors, quantification methodologies, and calculation tools used to develop inventories. CARB also proposed the separate reporting of biogenic emissions from Scopes 1, 2, and 3 emissions.

The agency further proposed new data quality disclosures, including requirements to identify missing data, explain any substitute data sources or estimation methods used, and disclose uncertainties associated with reported emissions through either quantitative metrics or qualitative explanations. Companies would also be required to explain any data exclusions and, where feasible, estimate the magnitude of excluded emissions. In addition, CARB indicated that reporting entities should prioritize primary data where available and is seeking stakeholder feedback on how best to implement this recommendation.

Collectively, these proposals reflect CARB’s broader effort to improve transparency around the quality, reliability, and limitations of reported emissions data.

Changes, Restatements & Recalculations

CARB proposed new requirements to improve the consistency and comparability of emissions data over time when methodologies or underlying data change. Under the proposal, companies would be required to disclose changes to quantification or accounting methodologies, provide a rationale for those changes, and identify any resulting impacts on reported emissions.

Further, CARB proposed requiring companies to recalculate previously reported emissions when a change yields a variance exceeding 5%, thereby establishing a standardized threshold for historical data updates. The agency indicated that these disclosures are intended to help users distinguish between changes attributable to actual emissions performance and those stemming from methodological revisions, updated assumptions, or improvements in data quality.

Assurance & Verification Requirements

CARB continued to refine its proposed assurance framework for SB 253 reporting, providing additional detail regarding both assurance requirements and acceptable assurance standards. Beginning with FY2027 reporting, CARB is proposing that companies obtain independent third-party limited assurance for Scope 1 and Scope 2 emissions, including separately reported biogenic emissions.

CARB also proposed a list of acceptable assurance standards, including AA1000AS, AICPA AT-C Section 210, ISAE 3410 and ISAE 3000, ISSA 5000, and ISO 14064-3. In addition, the agency is seeking stakeholder feedback on key assurance governance considerations, such as the content of assurance reports, disclosure of other services provided to the reporting entity by assurance providers, and the potential implementation of auditor rotation requirements. These proposals collectively aim to establish a consistent assurance framework and enhance confidence in reported emissions data.

SB 253 Compliance Costs and Implementation Considerations

CARB’s updated economic analysis highlights that SB 253 compliance costs will vary significantly across companies, based on factors such as company size, pre-existing emissions reporting infrastructure, internal expertise, and familiarity with Scope 3 reporting methodologies. Although stakeholder feedback presented divergent perspectives regarding the accuracy of CARB’s initial cost estimates, the agency has clarified that its revised analysis incorporates more conservative cost assumptions and remains open to additional feedback. For companies preparing for compliance, this reinforces the importance of proactively evaluating current reporting capabilities, data availability, and assurance readiness early, as implementation costs and resource needs are likely to differ substantially based on each organization’s starting point.

CARB’s Ongoing Stakeholder Engagement Process

CARB emphasized that stakeholder engagement will remain a core component of the implementation process, announcing a series of six listening sessions beginning in August 2026. These sessions are intended to provide reporting entities and other stakeholders with an opportunity to share implementation experiences, discuss challenges and best practices, and provide feedback on the proposed reporting framework. For companies preparing for SB 253 compliance, the sessions may offer valuable insights into emerging market practices and provide a forum to raise practical considerations that could influence future regulatory requirements.

Beyond California: Emerging State Climate Disclosure Requirements

As of today, California’s climate legislation represents one of the most ambitious climate disclosure requirements in the United States, impacting thousands of companies both nationally and internationally. However, additional U.S. states are starting to adopt similar measures.

In February, the New York State Senate passed the Climate Corporate Data Accountability Act (2025 – S9072A), which largely replicates the California model, requiring companies incorporated under U.S. law, doing business in New York, and exceeding $1 billion in revenue to annually disclose Scope 1, 2, and 3 GHG emissions. Comparable bills have also been drafted in Colorado (HB25-1119), Illinois (HB3673), and New Jersey (S679).

As the initial and most comprehensive U.S. climate data regulation, California’s SB 253 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.

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Footnotes

^[1] On November 18, 2025, the Ninth Circuit Court of Appeals paused SB 261 (the Climate-Related Financial Risk Act), effectively putting the statutory deadline of January 1, 2026 on hold. While there was a hearing to discuss the future of SB 261 on January 9, the court will make a final ruling “in due course.”