California’s SB 253, the California Climate Corporate Data Accountability Act, represents one of the most significant corporate climate disclosure requirements in the United States. For companies doing business in California with annual revenue exceeding $1 billion, the August 10, 2026 deadline marks the beginning of mandatory greenhouse gas emissions reporting under oversight by the California Air Resources Board (CARB).
This comprehensive guide features expert insight from Liane Randolph, former Chair of the California Air Resources Board from 2020 to 2025, who directly oversaw SB 253 and SB 261 implementation and helped shape California’s Climate Accountability Package toward a net zero carbon economy.
Understanding SB 253: California’s Climate Corporate Data Accountability Act
The California Climate Corporate Data Accountability Act mandates that reporting entities publicly disclose their greenhouse gas emissions annually, covering all three scopes defined by the Greenhouse Gas Protocol standards. The law affects roughly 5,000+ public and private companies, limited liability companies, and business entities doing business in California, regardless of where they are headquartered.
Who must report under SB 253?
Organizations subject to SB 253 must meet specific criteria:
- Revenue threshold: Total annual revenue exceeding $1 billion
- Doing business in California as defined by California revenue and taxation codes
- Includes both public companies and private reporting entities
- Covers business entities formed domestically or internationally
What SB 253 requires: Scope 1, Scope 2, and Scope 3 emissions
Companies must report three scopes of emissions based on the Greenhouse Gas Protocol:
Scope 1 emissions: Direct greenhouse gas emissions from owned or controlled operations, including facilities, vehicles, and manufacturing processes
Scope 2 emissions: Indirect emissions from purchased electricity, heat, or steam consumed by the reporting entity
Scope 3 emissions: All other indirect emissions across the value chain, including upstream and downstream greenhouse gas emissions from suppliers, products, and services
The California Climate Corporate Data Accountability Act (SB 253) mandates that organizations report their Scope 3 emissions starting in 2027, following the initial reporting deadline for Scope 1 and Scope 2 emissions in 2026.
Third-party assurance and independent verification
Unlike voluntary reporting programs, SB 253 introduces mandatory independent third-party assurance requirements:
- Limited assurance required initially for Scope 1 and Scope 2 emissions
- Moving toward reasonable assurance over time
- Organizations must engage independent verification providers recognized by the nonprofit emissions reporting organization
- Complete assurance provider’s report must be publicly accessible
Independent third-party assurance is required for emissions disclosures under SB 253, and organizations should secure these services early to avoid bottlenecks as reporting deadlines approach.
The Scope 3 challenge: What makes it so complex?
Scope 3 emissions often account for more than 90% of an organization’s total greenhouse gas emissions, making them critical to understand and report accurately. Yet gathering accurate data for Scope 3 emissions is complex, as it involves emissions from sources outside a company’s direct control, such as suppliers and product use, requiring strong engagement with third parties.
Good faith efforts and enforcement discretion
The California Air Resources Board recognizes these challenges. CARB has issued guidance indicating it will exercise enforcement discretion for initial reports, allowing reporting entities to use good faith efforts and reasonable basis for emissions calculations, particularly for Scope 3.
The law includes a safe harbor provision that protects reporting entities from penalties for misstatements regarding Scope 3 emissions disclosures until 2030, as long as those disclosures are made in good faith. However, penalties for non-compliance may only be assessed for non-filing of Scope 3 emissions disclosures between 2027 and 2030.
Building audit-ready emissions data
To prepare for compliance with SB 253, businesses should build robust internal data infrastructure to track emissions accurately and ensure transparency in reporting. The assurance process minimizes risk when organizations:
- Establish clear tracking emissions methodologies
- Document assumptions and emissions factors
- Create audit trails from source data collection through final disclosure
- Engage multiple assurance providers if needed for complex operations
According to former CARB Chair Liane Randolph: “Companies are going to really want to gather as much data as possible and work with their teams to figure out what they’ve already been tracking. Work with professionals and tools that have worked with other companies and with reporting frameworks in other jurisdictions. The more you’re able to pull from things you’ve already done and present the data as clearly as possible, the stronger and more consistent your reporting is going to be.”
What this guide covers: Expert insights from Liane Randolph
1. SB 253 reporting requirements and data readiness
Understanding statewide greenhouse gas emissions reporting obligations, implementing regulations adopted pursuant to the Climate Accountability Package, and building systems for timely reporting implementation. Learn what the California Air Resources Board expects for corporate carbon emissions disclosure and how to structure emissions data for compliance.
2. Approaching Scope 3 in the early years
Practical strategies for tackling indirect emissions across the value chain, from industry average data to primary supplier engagement. Understand when voluntary reporting exceeds requirements and how to balance good faith efforts with materiality.
3. What regulators and assurance providers expect
The difference between limited assurance and reasonable assurance, building complete audit trails, understanding administrative penalties, and navigating the emissions disclosure fund. Learn how securing third-party assurance works in practice and what the assurance process minimizes.
4. Building one foundation for SB 253, SB 261, and beyond
How California’s climate disclosure requirements align with New York’s Climate Corporate Data Accountability Act (CCDAA), the Corporate Sustainability Reporting Directive (CSRD), and other global frameworks. Understand climate-related financial risks reporting under SB 261 and how corporate climate disclosure is evolving.
Global implications: Why SB 253 matters beyond California
California’s SB 253 aligns with global sustainability frameworks by requiring organizations to report greenhouse gas emissions in accordance with the Greenhouse Gas Protocol, which is recognized internationally for emissions accounting through the World Business Council for Sustainable Development.
The implementation of SB 253 is expected to influence corporate transparency and accountability on a global scale, as California’s regulations often set precedents that other states and countries may follow. SB 253 is part of a broader trend towards mandatory climate disclosures, reflecting a global push for enhanced transparency in corporate emissions reporting.
The California Air Resources Board is responsible for implementing and enforcing SB 253, which includes developing regulations for emissions reporting and ensuring compliance, with relevant policy committees providing industry stakeholder input throughout the rulemaking process.
Enforcement and penalties under SB 253
The California Air Resources Board (CARB) is responsible for enforcing compliance with SB 253 and may impose administrative penalties for non-filing, late filing, or other compliance failures, with fines up to $500,000 per year per entity. Understanding enforcement discretion, reporting timelines, and the reporting entity’s public disclosure obligations is critical for overseeing compliance within your organization.
Download the complete SB 253 Expert Guide
This guide provides the detailed frameworks, regulatory insights from former California Air Resources Board Chair Liane Randolph, and practical strategies needed to meet emissions reporting requirements with confidence. Whether you’re navigating initial reporting deadlines, selecting from multiple assurance providers, or building infrastructure for climate accountability across SB 253 and SB 261, this resource offers clarity on what regulators expect and how leading organizations are preparing.
What you’ll learn:
- What SB 253 requires from a data and reporting standpoint
- How to approach Scope 3 in the early years
- What regulators expect to see in practice
- How SB 253, New York’s CCDAA and other frameworks can be supported by a single reporting foundation
Download now to turn climate corporate data accountability from a compliance burden into a strategic advantage for your organization.
