Publications

On July 21, the California Air Resources Board (“CARB”) held a public workshop to provide updates on the implementation of SB 253, the Climate Corporate Data Accountability Act, which requires U.S.-based entities doing business in California with more than $1 billion in annual revenue to disclose their Scope 1, 2 and 3 greenhouse gas (“GHG”) emissions. During the workshop, CARB introduced a revised reporting deadline, a phased-in approach to Scope 3 reporting, changes to the treatment of insurance companies, and proposed assurance requirements that would apply from 2027 and beyond.

Key Takeaways

• Reporting Deadline: On February 26, 2026, CARB approved the initial SB 253 regulation which set out an initial reporting deadline of August 10, 2026. However, given the current proposed changes to the regulations, CARB is introducing a new initial reporting deadline of November 10, 2026 for Scope 1 and Scope 2 emission reporting. CARB staff indicated they will share additional guidance materials—including a voluntary online intake platform and an accompanying guidance document and instructional video—by September 1, 2026, in advance of the new deadline. Going forward, CARB is proposing to retain November 10 for annual GHG emissions reporting.
• Scope 3 Approach: CARB staff proposed a phased approach to Scope 3 reporting. Rather than requiring reporting across all 15 GHG Protocol Scope 3 categories beginning in 2027, as originally proposed, the revised approach would initially require reporting on only five categories: (1) Purchased Goods and Services (Category 1); (2) Fuel and Energy Related Activities (Category 3); (3) Waste Generated During Operations (Category 5); (4) Business Travel (Category 6); and (5) Employee Commuting (Category 7). Staff noted that these are currently the most commonly reported categories and therefore have the most established data sources and mature quantification methods, as well as being responsive to stakeholder feedback regarding data availability and cost challenges. Reporting entities may choose to voluntarily report emissions from the remaining ten categories. Though many public comments asked for additional clarity, CARB has not indicated an approach to inclusion of additional Scope 3 categories in the future.
• Revised Approach to Insurance Companies: CARB’s initial regulation exempted insurance companies from 2026 GHG emissions reporting to avoid duplication with parallel reporting required by the California Department of Insurance (“CDI”). CARB has now concluded that CDI reporting may not satisfy SB 253’s requirements in future years because it does not include Scope 3 or assurance requirements. Beginning in 2027, CARB staff therefore propose that insurance entities will be subject to reporting under SB 253. This obligation may be met by submitting the same report to satisfy both CDI and SB 253 requirements, provided that such report meets all of CARB’s regulatory requirements. If all requirements are not met, reporting entities will need to supplement their report with the remaining required information. As a practical matter, this means that insurance companies should begin preparing for full SB 253 compliance, including Scope 3 reporting and third-party assurance, beginning in the 2027 reporting cycle.
• Assurance Requirements: For purposes of the limited assurance requirement for Scopes 1 and 2 emissions beginning with reports submitted in 2027, CARB further clarified that the limited assurance engagement must be conducted in full conformance with one of the following standards: (i) AA1000 Assurance Standard (AA1000AS v3); (ii) AICPA AT-C Section 210; (iii) ISAE 3410 applied in conjunction with ISAE 3000 (Revised), for engagements commencing prior to December 15, 2026; (iv) ISSA 5000 for engagements commencing on or after December 15, 2026; or (v) ISO 14064-3:2019 (with additional accreditation requirements). An engagement performed at a reasonable assurance level would also satisfy this requirement. The assurance provider must issue a written report identifying the standard applied, the level of assurance provided, the Scope 1 and 2 emissions covered, the assurance conclusion, provider identification information and the engagement completion date.
• GHG Protocol Alignment: CARB emphasized that SB 253 reporting will be aligned with the GHG Protocol, which it described as the globally recognized framework for measuring and reporting Scope 1, 2, and 3 emissions. CARB’s proposed approach is to build on the GHG Protocol’s requirements and recommendations, while adding California-specific clarifications and seeking to preserve interoperability with other major climate disclosure regimes, including IFRS S2 and the EU CSRD.

CARB encourages continued engagement and feedback from reporting entities. The agency has scheduled a series of sector-specific listening sessions in August and September for the following: data users and public interest stakeholders, manufacturing and industrial companies, agriculture and food companies, energy and utilities, retail and technology companies and banking, finance, and insurance companies. Companies that wish to stay engaged and notified of these sessions can sign up here.

For further background information and previous developments on California’s climate reporting laws SB 261 and SB 253, see our prior Alert here.

SB 253 Litigation Status

SB 253 remains subject to a pending First Amendment challenge in the U.S. District Court for the Central District of California. The plaintiffs—including the U.S. Chamber of Commerce, the American Farm Bureau Federation and other business groups—allege that SB 253’s mandatory emissions disclosure requirements constitute compelled speech in violation of the First Amendment. Notwithstanding the litigation, CARB has continued to advance implementation of the statute and has indicated it expects reporting entities to comply with the November 10, 2026 deadline for Scope 1 and 2 emissions.