SB 253 is 4 months away — what it means for your company's carbon reporting

California's Senate Bill 253 — the Climate Corporate Data Accountability Act — is no longer a distant concern. With the first Scope 1 and Scope 2 disclosure deadline arriving in mid-2026, affected companies have roughly four months to get their reporting infrastructure in order. If you're doing business in California with $1 billion or more in annual revenue, this law applies to you.

Most companies running behind on SB 253 aren't ignoring it — they're underestimating the data collection lift involved. Scope 3 in particular catches organizations off guard. This guide covers what SB 253 requires, when, what happens if you miss it, and what to do right now.

What SB 253 actually requires

SB 253 mandates annual disclosure of greenhouse gas emissions across all three scopes — using the GHG Protocol Corporate Accounting and Reporting Standard as the methodological baseline. Scope 1 covers direct emissions from sources you own or control (fleet, equipment, heating). Scope 2 covers emissions from purchased electricity, heat, and steam. Scope 3 covers everything upstream and downstream: purchased goods, business travel, employee commuting, waste, investments.

The disclosures must be submitted to a nonprofit emissions registry designated by the California Air Resources Board (CARB). Third-party assurance is required — limited assurance for Scope 1 and 2, and eventually reasonable assurance for Scope 3.

Who is covered:

• U.S.-based companies (public or private) with annual revenues exceeding $1 billion
• That conduct business in California — which California broadly interprets; having customers, employees, or operations in the state typically qualifies

Foreign-headquartered companies are not currently covered, though that may change. Subsidiaries of qualifying U.S. companies are covered if the parent meets the revenue threshold.

Key deadlines

The practical implication: your Scope 1 and 2 data for calendar year 2025 (or your fiscal year ending in 2025) needs to be collected, calculated, and assured by mid-summer 2026. If your fiscal year already ended, the clock has been running since January. If you haven't started your GHG inventory, you're behind.

Penalties for non-compliance

CARB is the enforcement agency. Penalties are assessed per violation per year — meaning a company that misses two consecutive disclosure cycles could face $1 million in cumulative fines before attorney's fees or reputational damage enter the picture.

The $50,000/day Scope 3 penalty is the one most companies underestimate. It's designed as an escalating motivator — not a one-time fine. A company that delays Scope 3 disclosure by 90 days would theoretically face up to $4.5 million in exposure. Calculate your specific penalty exposure →

Scope 3: the hard part most companies skip

Scope 1 and 2 emissions are relatively straightforward to measure — your utility bills, fleet fuel spend, and combustion records get you most of the way there. Scope 3 is a different category of work entirely.

The GHG Protocol defines 15 Scope 3 categories, ranging from purchased goods and services to downstream leased assets and investments. For a mid-market company with $1B+ in revenue, the significant categories typically include:

• Category 1: Purchased goods and services (often 50–80% of total Scope 3)
• Category 6: Business travel
• Category 7: Employee commuting
• Category 11: Use of sold products (relevant for manufacturers)
• Category 15: Investments (relevant for financial services)

Getting Scope 3 right requires supplier engagement, spend data analysis, and often several months of data collection. Companies that wait until 2027 to start collecting 2026 data will find themselves scrambling. See the complete Scope 3 calculation guide →

What to do right now

The companies that will be most prepared are those that started building a repeatable GHG data collection process 12–18 months ago. If you're just starting now, focus on accuracy over completeness — a well-documented, assured Scope 1 and 2 report with honest uncertainty disclosures is better than a comprehensive but unsupported submission.

Calculate your Scope 1, 2, and 3 baseline today → It takes five minutes and gives you a defensible starting point for your inventory process.

The SB 253 and SEC disclosure overlap

If your company is subject to both SB 253 (California) and the SEC Climate Disclosure Rule (public companies), there's meaningful alignment in the underlying data requirements — but different formats, different registries, and different assurance standards. The good news: a single, rigorous GHG inventory can satisfy both. The bad news: the assurance requirements differ, and you'll need separate submissions.

Companies that treat these as one integrated compliance workstream (rather than two parallel silos) save significant time and cost. See the full SEC + SB 253 compliance guide →