CARB formally published a 15-day notice on July 27 proposing to move the initial reporting deadline to November 10, 2026. The proposed modification remained open for public comment through August 11, with comments restricted to the changes covered by the notice. CARB plans to resubmit the modified regulation to the Office of Administrative Law (OAL) after the comment process concludes. The first reporting cycle is expected to cover Scope 1 and Scope 2 emissions for the 2025 fiscal year. SB 253 generally applies to U.S.-organized business entities with annual revenues above $1 billion that do business in California. CARB has also indicated that strict compliance with its draft reporting template and limited assurance will not be required for the 2026 reporting year.
For covered businesses, the immediate priorities are straightforward:
November 10, 2026, subject to completion of the regulatory approval process.
Scope 1 and Scope 2 emissions for the preceding fiscal year.
CARB has indicated enforcement discretion for incomplete first-year reporting where companies demonstrate good-faith compliance efforts.
Companies should preserve relevant records, assumptions, estimates, and evidence supporting their reporting approach.
The transitional flexibility should not be mistaken for an exemption. Companies relying on CARB’s enforcement discretion will still need to demonstrate genuine efforts toward compliance.
The more significant shift is expected from 2027. CARB staff has proposed aligning definitions and methodologies with the GHG Protocol, aiming to reduce uncertainty and reporting costs created by inconsistent interpretations. The proposal remains preliminary and will undergo separate rulemaking and a full 45-day public comment process before any requirements are finalized. Under the proposed approach, companies would report gross Scope 1, Scope 2 and Scope 3 emissions in metric tons of carbon dioxide equivalent. Methodological alignment would draw on the GHG Protocol Corporate Standard, along with the GHG Protocol Scope 2 Guidance and Scope 3 Calculation Guidance. CARB says this alignment could help reduce duplication for companies already subject to other climate disclosure regimes.
Standardization will not mean minimal disclosure. Companies could be required to explain:
The direction is significant. CARB’s proposed framework would place greater emphasis on the traceability and defensibility of emissions data, rather than treating the final emissions figure as the only material disclosure.
One of the most notable proposals concerns Scope 3 emissions categories. Rather than immediately requiring companies to report across all 15 GHG Protocol Scope 3 categories under the GHG Protocol, CARB staff proposes limiting mandatory reporting from 2027 to five categories:
Category 1
Purchased goods and services
Category 3
Fuel- and energy-related activities not included in Scope 1 or Scope 2
Category 5
Waste generated in operations
Category 6
Business travel
Category 7
Employee commuting
The proposed limitation could reduce the immediate burden of Scope 3 emissions reporting, particularly for companies still developing value-chain data systems. Yet CARB’s proposal does not indicate that these five categories will necessarily represent the most material emissions sources for every business. Companies could therefore benefit from mapping the full value chain now, even if only five categories become mandatory initially. For each required category, companies would need to identify covered activities, explain methodologies and data types, report total emissions, disclose exclusions and state the percentage calculated using primary data. This places greater emphasis not simply on producing numbers, but on being able to defend how those numbers were generated.
CARB has also proposed limited assurance from an independent third party beginning with reports submitted in 2027. The requirement would apply to Scope 1 and Scope 2 emissions, including separately reported biogenic carbon dioxide, with several assurance standards potentially accepted. That shift makes the quality and traceability of underlying data increasingly important. Companies will need stronger controls over organizational boundaries, activity data, emission factors, calculation tools, management review, uncertainty, missing-data substitutions and exclusions.
The proposed 2027 requirements point to several areas where early preparation can reduce future compliance pressure:
Strengthen data controls across organizational boundaries, activity data, and calculation methodologies.
Document assumptions and gaps rather than addressing them only when reporting begins.
Map the full value chain, even if only five Scope 3 categories become mandatory initially.
Prepare for assurance by establishing evidence trails and management review processes.
Monitor the rulemaking as CARB develops its formal 2027 framework.
For businesses covered by CARB SB 253, the practical message is clear: the first reporting deadline is approaching, but the larger compliance challenge is already taking shape. Preparing only for the immediate filing could leave companies scrambling when more rigorous requirements take effect.
Cognitud helps businesses prepare for evolving climate disclosure requirements by strengthening the processes behind emissions data, reporting and compliance. From assessing reporting applicability and establishing defensible data boundaries to mapping value-chain emissions and strengthening controls for future assurance, Cognitud helps organizations build a reporting foundation that can adapt as regulatory expectations develop. This enables companies to move beyond one-time compliance and establish more reliable, transparent and decision-useful emissions reporting systems.
Abhigyan Gupta
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GHG stands for greenhouse gas, which refers to gases that contribute to the greenhouse effect and global warming. In the context of California’s SB 253, GHG emissions are the emissions businesses are required to measure and report across different emission scopes. The proposed reporting framework measures these emissions in metric tons of carbon dioxide equivalent (CO₂e).
SB 253, formally known as the Climate Corporate Data Accountability Act, is a California climate disclosure law that establishes greenhouse gas emissions reporting requirements for certain large businesses operating in the state. The law is designed to create a more standardized approach to corporate emissions disclosure, covering Scope 1, Scope 2 and, in later reporting years, Scope 3 emissions.
The GHG Protocol is a globally recognized framework used by organizations to measure, calculate and report greenhouse gas emissions. It provides standardized methodologies for different emissions categories, including Scope 1, Scope 2 and Scope 3. Under the proposed SB 253 framework, CARB plans to align reporting definitions and methodologies with relevant GHG Protocol standards and guidance.
SB 253 reporting is being phased in, with the first reporting cycle covering Scope 1 and Scope 2 emissions for fiscal year 2025. CARB has proposed extending the initial reporting deadline to November 10, 2026, subject to completion of the regulatory approval process. More structured reporting requirements are proposed to apply from 2027 onward.
SB 253 generally applies to U.S.-organized business entities with annual revenues exceeding $1 billion that do business in California. These businesses fall within the scope of the law and are subject to its greenhouse gas emissions reporting requirements as the reporting framework is phased in.
