California Senate Bill 253 (SB 253) – Climate Corporate Data Accountability Act
- Sebastien Banales
- Feb 17
- 4 min read
The State of California established the Climate Corporate Data Accountability Act, which requires U.S.-based companies and corporations that do business in California to publicly disclose their greenhouse gas (GHG) emissions starting in 2026.[1] While the regulation has not yet been finalized, CARB workshops have indicated that the first reporting and assurance deadline for Scope 1 and Scope 2 emissions is planned to be August 10, 2026, which aligns with the existing Regulation for the Mandatory Reporting of GHG Emissions (MRR) program verification deadline.
The California Air Resources Board (CARB or Board) will conduct a public hearing on February 26, 2026.
Who Is Subject to SB 253?
U.S. business entities, private and public, with annual revenues greater than $1 billion that “do business” in California (even if headquartered elsewhere) are subject to SB 253. CARB has defined “doing business in California” based on Revenue & Tax Code §23101 which “means actively engaging in any transaction for the purpose of financial or pecuniary gain or profit.”[2] This requirement spans most industries from manufacturing and energy to finance, technology, and beyond, although some exemptions are being considered.
What Must Be Disclosed
SB 253 requires companies to publicly disclose their full greenhouse gas emissions footprint, including Scopes 1, 2, and 3, using established accounting standards.
Scope 1 emissions refer to all direct greenhouse gas emissions that stem from sources that a reporting entity owns or directly controls, regardless of whether the emission source is located in or out of the State of California.
Scope 2 emissions include indirect greenhouse gas emissions from electricity, steam, heating, or cooling purchased or acquired by a reporting entity, regardless of location of the indirect emissions.
Scope 3 is the most complex emissions to account for as they are “Indirect Upstream” or “Downstream Emissions” from sources that the reporting entity does not own or directly control and may include, but are not limited to, purchased goods and services, business travel, employee commutes, and processing and use of sold products. The Greenhouse Gas (GHG) Protocol identifies 15 categories of Scope 3 emissions to be considered.[3]
Timeline and Assurance Requirements
Starting in 2026, CARB is requiring the annual public disclosure of Scope 1 and 2 emissions; CARB will accept data with or without limited assurance review for 2025 data, exercising its enforcement discretion for the first reporting period. However, undergoing assurance for reported data is highly encouraged.
There is a possibility starting in 2027, CARB will require annual public disclosure of Scope 3 emissions (within 180 days of Scope 1 & 2). Starting in 2030, reasonable assurance will be required for Scope 1 & 2 emissions and limited assurance for Scope 3 emissions.
Types of Assurance
Limited and reasonable assurance describes the two different levels of confidence an independent verifier provides on an organization’s emissions disclosures. The key differences are the depth of review, level of confidence, and evidence gathered.
Limited assurance provides a moderate level of confidence that the GHG emissions reported are free from misstatement where the verifier’s conclusion is expressed in a negative form, such as “nothing has come to our attention…”. This level of assurance involves a high-level review of data, limited assessment of methodologies, and may or may not require a site visit depending on the specific situation.
Reasonable assurance provides a high level of confidence that the GHG emissions are free from misstatement. It involves a comprehensive review, targeted sampling, site visits, and rigorous data verification, similar to a verification conducted under CARB’s MRR and LCFS programs.
Compliance Challenges and Key Considerations
Developing a GHG inventory across all three scopes is a complex task, especially for those with an environmental department that is already understaffed. Obtaining high quality, reliable, and auditable data may be challenging, especially for Scope 3 emission sources. For SB 253 disclosures, companies can integrate their data with existing frameworks such as the GHG Protocol Corporate Accounting and Reporting Standard[4].
The most important considerations are the accuracy of the reportable emission inventories and the methods used to quantify the emissions. In summary, companies subject to SB 253 are required to measure, verify, and publicly disclose their full corporate GHG emissions (Scopes 1, 2, and 3) on an annual basis, with increasing levels of independent assurance over time.
How Can ALG Assist?
ALG’s climate experts are familiar with the regulations and requirements driving climate disclosure in California and across the country, and routinely advise companies on Scope 1, 2, and 3 calculation strategies, including carbon footprint and lifecycle analyses. With the pending finalization of SB253, we have already begun working with business to provide third party assurance services to those seeking greater confidence in reported data.
Questions? We’d love to chat about your specific situation. Email our SB253 subject matter expert, Elliott Ripley, at eripley@algcorp.com.