California SB 253 Update: Five Emerging Priorities from CARB's Industry Listening Sessions
Stakeholders generally supported CARB’s efforts to align with the GHG Protocol, provide flexible implementation pathways, and phase in Scope 3 requirements. At the same time, participants raised concerns about reporting burden, compliance complexity, and California-specific requirements.
Between August and September 2026, the California Air Resources Board (CARB) facilitated six industry-focused listening sessions to gather public feedback on the California Climate Corporate Data Accountability Act (SB 253). The sessions followed CARB’s earlier rulemaking workshops on SB 253 and SB 261 and included perspectives from reporting companies, trade associations, assurance providers, consultants, NGOs, investors, and other data users.
ISS-Corporate’s summaries of the prior workshops are available here: Workshop 1, Workshop 2, Workshop 3, Workshop 4, and Workshop 5.
Across the listening sessions, stakeholders generally supported CARB’s efforts to align with the Greenhouse Gas Protocol (GHG Protocol), provide flexible implementation pathways, and phase in Scope 3 requirements. Participants also raised concerns that certain elements of CARB’s proposal could increase reporting burden, create California-specific compliance challenges, or extend beyond existing GHG Protocol requirements.
Key Takeaways from CARB’s SB 253 Listening Sessions
- GHG Protocol alignment remains a central focus. Stakeholders encouraged CARB to align closely with the GHG Protocol and existing reporting practices, while CARB noted that some additional specificity may be needed for regulatory enforcement.
- Scope 3 requirements remain under discussion. Feedback focused on CARB’s proposed five-category approach, materiality considerations, and how to balance decision-useful disclosure with implementation burden.
- Recalculation requirements drew significant feedback. Stakeholders raised operational concerns about recalculating historical inventories, making this an area likely to receive continued attention in the rulemaking process.
- Implementation flexibility remains important. CARB signaled openness to multiple accounting approaches and acknowledged current limitations in primary data availability.
- Interoperability may help reduce reporting burden. Companies and industry groups encouraged CARB to leverage existing disclosures and reporting frameworks where possible.
Five Themes California SB 253 Rulemaking
1. GHG Protocol Alignment vs. CARB-Specific Requirements
Across industries, stakeholders consistently encouraged CARB to remain closely aligned with the GHG Protocol and avoid California-specific reporting requirements where possible, citing concerns about duplicative reporting systems, increased costs, and reduced comparability with other reporting regimes. CARB acknowledged this concern, noting that one challenge of the rulemaking process is translating a voluntary framework into an enforceable regulatory program, and stated that certain voluntary elements of the GHG Protocol may need to be made mandatory to satisfy California’s statutory requirements.
At the same time, CARB appears committed to preserving implementation flexibility where possible. It repeatedly emphasized that companies may use existing internal reporting processes, multiple GHG accounting methodologies, and various organizational boundary approaches where consistent with the GHG Protocol.
Implications for reporting companies
GHG Protocol alignment is important because many companies already use established greenhouse gas accounting frameworks. The degree of alignment between SB 253 and existing standards could determine whether compliance can be integrated into current reporting processes or requires additional California-specific disclosures.
2. Scope 3 Reporting Requirements Remain Under Debate
Scope 3 emissions were a frequent focus of stakeholder feedback, with participants noting that full Scope 3 reporting remains resource-intensive and often depends on data outside a company’s direct control.
CARB’s current proposal is to phase in Scope 3 reporting beginning in 2027, initially requiring the five most commonly reported categories that have more mature methodologies and data sources.
The listening sessions highlighted differing priorities among various stakeholder groups. Corporate participants generally emphasized phased implementation, flexibility, and reduced reporting burden, while data users and advocacy organizations cautioned that limiting disclosure to five categories could omit material emissions and reduce decision-useful information for investors and other stakeholders. Debate also centered on whether certain categories should remain optional, reflecting the broader tension between reporting feasibility and comprehensive disclosure.
Implications for reporting companies
Scope 3 emissions remain challenging because they are often complex, data-intensive, and dependent on information outside a company’s direct control. CARB’s final approach could affect data collection expectations, reporting boundaries, and overall compliance burden.
3. The Challenge of Recalculation Requirements
A recurring issue across sectors was CARB’s proposal that emissions inventories be recalculated when a change in corporate structure or accounting methodology causes total GHG emissions in a company’s base year to exceed a 5% threshold. Under the proposal, the entity would then be required to recalculate all affected historical emissions inventories.
Several stakeholders raised concerns that a 5% trigger could create significant administrative burden, particularly when emissions factors, methodologies, or third-party datasets change regularly.
CARB consistently responded that the purpose of the threshold is to preserve comparability across reporting years but indicated that feedback on alternative approaches remains welcome.
Implications for reporting companies
The prominence of recalculation requirements reflects the practical reality that emissions inventories often evolve as methodologies, assumptions, underlying datasets, and corporate structures change. The final approach could affect the resources needed to maintain historical emissions inventories and support year-over-year comparability.
4. Balancing Emissions Data Quality and Reporting Flexibility
Stakeholders across sectors emphasized the need for flexibility in data collection, citing immature methodologies, limited supplier data, reliance on modeled or proxy data, and assurance challenges. CARB noted that spend-based, activity-based, supplier-specific, and hybrid methods may be acceptable if methodologies are clearly disclosed and reiterated that primary data is not currently required.
Implications for reporting companies
Methodological flexibility is important given the practical challenges many companies face in obtaining complete and reliable emissions data, particularly across value chains. The level of flexibility ultimately permitted by CARB may affect the feasibility, timing, and cost of compliance.
5. Interoperability Across Climate Disclosure Frameworks
Stakeholders repeatedly urged CARB to leverage existing disclosure frameworks and reporting systems where possible, including CDP, existing corporate sustainability reports, mandatory insurance disclosures, and global disclosure frameworks such as the International Sustainability Standards Board (ISSB) and the Corporate Sustainability Reporting Directive (CSRD). A common request was that CARB accept disclosures already being prepared for other stakeholders rather than requiring duplicative filings.
CARB generally expressed support for reducing reporting burdens but indicated that complete alignment may not always be possible due to statutory requirements.
Implications for reporting companies
Interoperability is a recurring priority as companies navigate multiple climate reporting requirements and disclosure frameworks. The extent to which SB 253 can leverage existing reporting processes may affect incremental reporting burden, system changes, and compliance costs.
Sector-Specific Perspectives on SB 253 Compliance
Agriculture, Food, Beverage & Forestry
Stakeholders highlighted methodological uncertainty related to livestock emissions, specialty crops, biogenic emissions, carbon removals, and supplier-level data collection.
Energy, Utilities, Transportation & Waste
Participants focused on net-zero definitions, voluntary carbon credits, carbon insetting, base-year selection, recalculation requirements, and alignment with existing reporting programs.
Manufacturing & Industrial Companies
Stakeholders emphasized operational burden, Scope 3 methodology flexibility, concerns regarding commercially sensitive business information, supplier-data challenges, and desired GHG Protocol alignment.
Retail, Consumer Goods & Apparel
Participants focused on Scope 3 data availability, estimated and spend-based emissions calculations, data exclusions, and consistency with existing reporting frameworks.
Banking, Finance & Insurance
Participants raised questions related to Scope 3 phase-in, financed emissions, insurance-specific requirements, data exclusions, recalculation rules, and overlap with existing regulatory reporting obligations.
What’s Next for California SB 253?
While the listening sessions provided stakeholders with an opportunity to raise sector-specific concerns and implementation challenges, they also represented an important information-gathering exercise for CARB as it develops the next phase of the SB 253 regulatory framework. CARB repeatedly emphasized throughout the sessions that the feedback received will help inform the agency’s forthcoming rulemaking package for 2027 reporting and beyond.
Upcoming CARB Rulemaking Milestones
CARB’s regulatory process follows two tracks: near-term requirements for 2026 reporting and a broader rulemaking process that will establish the long-term framework beginning in 2027. For the 2026 reporting requirements, CARB has finalized rules on applicability, program fees, and the November 10, 2026 reporting deadline, and has released supplemental guidance and a voluntary reporting platform.
The more comprehensive rulemaking remains under development. According to CARB, staff expect to release a formal rulemaking package that will include draft regulatory text, a staff report, economic analysis, and supporting materials for public review and comment. CARB has indicated that this package will be subject to a 45-day public comment period before consideration by the Board, with Board action currently anticipated by the end of 2026.
Near-Term Compliance Considerations for Reporting Companies
Despite ongoing rulemaking, CARB has consistently reaffirmed that Scope 1 and Scope 2 disclosures are expected in 2026, and that Scope 3 reporting will follow beginning in 2027. The listening sessions also indicated that many of the practical implementation challenges being discussed, including data collection, boundary-setting, supplier engagement, and assurance readiness are already top priorities for reporting entities across sectors.
How Companies Can Prepare for SB 253 Reporting
For organizations that may be subject to SB 253, areas of focus may include:
- Confirming applicability and organizational boundaries.
- Evaluating current greenhouse gas inventories and reporting
- Assessing readiness for future assurance requirements.
- Identifying material Scope 3 categories and available data sources.
- Monitoring CARB updates and participating in future comment opportunities as the subsequent rulemaking progresses.
What SB 253 May Signal for Future Climate Disclosure Rules
The listening sessions reflected broad support for CARB’s continued development of SB 253, while highlighting ongoing debate around Scope 3 reporting, recalculation thresholds, data exclusions, and alignment with existing accounting frameworks. For companies, the significance of these debates extends beyond SB 253 compliance. As regulators continue developing climate disclosure requirements, including emerging proposals in jurisdictions such as New York, similar questions around Scope 3 reporting, use of estimates, interoperability, assurance, and administrative burden may shape future regulatory approaches. The SB 253 rulemaking process may therefore provide useful insight into how regulators balance comparability, transparency, and implementation feasibility, with implications that extend beyond California.