With the first reports under California's Climate Corporate Data Accountability Act (SB 253) quickly approaching, here is what covered companies need to know.
1. The deadline is August 10, 2026. The clock is ticking. Companies subject to SB 253 must submit their first greenhouse gas emissions reports to the California Air Resources Board (CARB) by August 10, 2026. There is, however, an important exception for companies that were not collecting data (or planning to collect data) as of CARB’s December 2024 Enforcement Notice (see Item 6 below).
2. Know if you're covered. SB 253 applies to U.S.-organized entities with total annual revenues exceeding $1 billion for two consecutive years that they do business in California. (See California Climate Disclosures Final Regulation Order for more details regarding companies in scope of SB 253).
3. You have three reporting options. CARB has outlined three acceptable approaches to reporting: (1) submitting your own annual report that includes Scopes 1 and 2 emissions data; (2) submitting emissions data already provided to a voluntary or regulatory program; or (3) using CARB's own Scopes 1 and 2 reporting template. With regards to the first option, companies may wish to consider creating a standalone SB 253 report that pulls the required Scopes 1 and 2 emissions data from their broader sustainability report in order to keep voluntary disclosures separate from regulatory compliance. All emissions reporting must align with the Greenhouse Gas Protocol. The applicable preceding fiscal year that must be reported on is determined based on the company’s fiscal year cycle. If the company’s fiscal year ends on or before February 1, 2026, the preceding fiscal year will be the one ending in 2026. If the company’s fiscal year ends after February 1, then the preceding fiscal year will be the fiscal year ending in 2025.
4. Only Scopes 1 and 2 emissions are required this first year. While SB 253 ultimately requires Scopes 1, 2, and 3 emissions disclosures, only Scopes 1 and 2 data is required for 2026. Scope 3 reporting comes later in 2027.
5. Data assurance is not required for 2026. CARB has confirmed that limited assurance over submitted emissions data is not required this year.
6. Good-faith submissions get enforcement latitude in 2026. CARB has reaffirmed its December 2024 Enforcement Notice, signaling it will exercise enforcement discretion for good-faith first-year submissions and focus on supporting companies working toward full compliance. Companies may submit data for their prior fiscal year based on information they already had or were collecting when CARB's December 2024 Enforcement Notice was issued, regardless of whether the data received limited assurance. Companies that were not collecting data (or planning to collect data) at the time the Enforcement Notice was issued are not expected to submit a report; but must file a statement on company letterhead explaining that.
7. Each in-scope subsidiary gets its own fee, but one parent can pay. CARB will assess a fee on each covered subsidiary, even when reporting is done at the parent level. CARB plans to use a flat fee structure and aims to issue invoices by September 10, 2026.
8. Companies must upload their report, not just link to it. Reporting will be through a public docket, and companies are expected to upload their reports directly rather than providing a hyperlink to a website (as is the case for reporting under SB 261).
9. Ongoing litigation is unlikely to rescue companies from 2026 obligations, but it may not matter anyway. The Ninth Circuit Court of Appeals has already preliminarily enjoined enforcement of SB 261 (California's climate risk reporting law) as part of the ongoing litigation brought by the U.S. Chamber of Commerce and other plaintiffs, but notably declined to do the same for SB 253. While speculation is growing about whether SB 253 enforcement may eventually be enjoined as well, companies should not count on litigation relief this year. And for most companies, it may not matter. CARB’s broad first-year enforcement discretion has already taken much of the sting out of the 2026 reporting deadline by allowing companies to submit whatever data they already have, without requiring assurance, and excusing companies that were not already collecting this data or planning to collect this data as of the December 2024 Enforcement Notice.
10. Next year will be harder. Assuming SB 253 survives the pending litigation, 2027 will be a much harder year for reporting. In addition to Scope 1 and 2 emissions data, Scope 3 emissions data will be required. Companies should also expect a more prescriptive CARB-mandated format for reporting, as well as mandatory limited assurance over Scopes 1, 2, and 3 emissions reporting.