Senate Bill 253 requires companies with revenue above USD 1 billion that do business in California to disclose Scope 1, 2 and 3 emissions annually to CARB, measured under the Greenhouse Gas Protocol and covered by third-party assurance.
The first Scope 1 and 2 reports are due on 10 November 2026, with Scope 3 reporting starting in 2027 on the schedule CARB sets in its second rulemaking.
Scope is set by revenue and California presence, so the law covers public and private companies headquartered in any state, with exemptions for non-profits, insurers regulated by the California Department of Insurance, and government-owned entities.
For 2026 only, CARB accepts Scope 1 and 2 data a company already held or was collecting on 5 December 2024, or a letter stating it was collecting neither, and takes no enforcement action against good-faith submissions.
| Regulator | California Air Resources Board (CARB), under Health and Safety Code section 38532 |
| Standard | Senate Bill 253 (Climate Corporate Data Accountability Act, 2023), as amended by Senate Bill 219 (2024); CARB Initial Regulation, Title 17 California Code of Regulations sections 96070 to 96077 (pending Office of Administrative Law approval). Emissions measured under the Greenhouse Gas Protocol |
| Companies in scope | Business entities formed under United States law with total annual revenue above USD 1 billion that do business in California |
| Estimated population | Not yet published |
| First reporting year | Scope 1 and 2 for the prior fiscal year, due 10 November 2026 (proposed, pending Office of Administrative Law approval); Scope 3 from 2027 |
| Scope 3 required | Yes, from 2027. CARB proposes five mandatory categories from 2027 (purchased goods and services, fuel- and energy-related activities, waste, business travel, employee commuting), the other ten voluntary, subject to the rulemaking due in late 2026 |
| Assurance | Limited assurance on Scope 1 and 2 from 2026 (CARB accepts 2026 reports with or without assurance); reasonable assurance from 2030. Limited assurance on Scope 3 from 2030 |
| Penalty regime | Administrative penalties of up to USD 500,000 per reporting year. Between 2027 and 2030, Scope 3 penalties apply only for non-filing |
California's Climate Corporate Data Accountability Act (Senate Bill 253) requires every company with total annual revenue above USD 1 billion that does business in California to report Scope 1 and Scope 2 greenhouse gas emissions to the California Air Resources Board (CARB) from 2026, and Scope 3 from 2027, with the first reports due on 10 November 2026 under the regulation CARB modified on 27 July 2026. It is the first mandatory, economy-wide emissions disclosure law in the United States, and it reaches companies headquartered anywhere in the country.
Below: what the rule requires, who is in scope, and how to prepare.
Senate Bill 253 was signed in 2023 alongside Senate Bill 261, the Climate-Related Financial Risk Act, and the two have moved on different tracks since.
2023 to 2024, the statute. Senate Bill 253 wrote the disclosure duty into Health and Safety Code section 38532. Senate Bill 219 (27 September 2024) moved CARB's deadline to adopt regulations to 1 July 2025, with first reports still due in 2026.
December 2024, enforcement notice. CARB announced it would take no enforcement action against incomplete first-year reports made in good faith, and would accept Scope 1 and 2 data companies already possessed or were collecting on 5 December 2024.
November 2025, the injunction. On 18 November 2025 the Ninth Circuit Court of Appeals enjoined enforcement of Senate Bill 261 in Chamber of Commerce v. Sanchez (No. 25-5327) while the appeal is decided. Senate Bill 253 was left standing and CARB has continued to implement it.
February to July 2026, the regulation. The Board approved the Initial Regulation on 26 February 2026, withdrew it from the Office of Administrative Law on 23 June to make clarifying changes, and published modified text on 27 July 2026 that moved the first deadline from 10 August to 10 November 2026.
In-scope companies report their full greenhouse gas inventory to CARB every year, measured under the Greenhouse Gas Protocol and checked by an independent assurance provider.
Scope 1 and 2 emissions, annually from 2026. Direct emissions from owned or controlled sources, and indirect emissions from purchased electricity, steam, heating and cooling, wherever in the world they occur. Reports cover the prior fiscal year and can be consolidated at the parent company level.
Scope 3 emissions, annually from 2027. Indirect upstream and downstream emissions, on a schedule CARB sets in its second rulemaking. The statute recognises that Scope 3 calculations draw on primary and secondary data, including industry averages and proxy data.
Third-party assurance. Limited assurance on Scope 1 and 2 from 2026, rising to reasonable assurance from 2030. Scope 3 assurance starts at limited level in 2030. The provider's full report is filed with the disclosure.
The Greenhouse Gas Protocol as the measurement standard. Health and Safety Code section 38532(c)(2)(A)(ii) requires measurement and reporting in conformance with the Greenhouse Gas Protocol Corporate Accounting and Reporting Standard and the Corporate Value Chain (Scope 3) Standard.
For 2026 only, each company files either Scope 1 and 2 emissions based on information it possessed or was collecting on 5 December 2024, or a statement on company letterhead that it held no such data and was collecting none. An existing annual report, data reported to another programme, or CARB's voluntary template all count as acceptable formats, and CARB accepts 2026 submissions with or without assurance.
Any business entity formed under United States law with total annual revenue above USD 1 billion that does business in California must report, public or private, wherever its headquarters sit.
Reporting entities
Revenue test: total annual revenue above USD 1 billion, measured as gross receipts at the individual entity level, taking the lesser of the two previous fiscal years and excluding intercompany transactions within a combined reporting group.
California test: "doing business in California" follows Revenue and Taxation Code section 23101: entities organised or commercially domiciled in California, and entities whose California sales, property or payroll exceed the indexed thresholds in that section.
Exclusions
The Initial Regulation excludes non-profit and charitable organisations; entities regulated by the California Department of Insurance or in the insurance business in another state; government entities and companies more than 50 percent government-owned; entities whose only California activity is wholesale electricity transactions in interstate commerce; and entities whose only California business is employee compensation, including teleworking employees. From 2027, CARB proposes that insurers file the climate report they already submit to the Department of Insurance, supplemented where it lacks Scope 3 or assurance content.
Supply-chain reach (Terrascope analysis, not a regulatory requirement): the statute places no duty on suppliers. The practical consequence is that once Scope 3 reporting starts in 2027, every significant supplier to a reporting entity becomes a data source, and CARB's proposed first tranche puts purchased goods and services first in line. Suppliers in Mexico, Canada, Latin America and Asia should expect emissions data requests from United States customers well before their own regulators require reporting.
| Milestone | Measurement year | Reporting date |
| First Scope 1 and 2 report | Applicable preceding fiscal year (fiscal years ending on or before 1 February 2026 report the year ending in 2026; later year-ends report the year ending in 2025) | 10 November 2026 (proposed) |
| Fee determination notice for calendar year 2026 | n/a | 10 December 2026 (proposed); payment due within 60 calendar days |
| Second rulemaking: 2027 requirements, Scope 3 schedule, assurance standards | n/a | 45-day comment period autumn 2026; Board consideration end of 2026 (CARB timeline) |
| Scope 1, 2 and 3 report, with limited assurance on Scope 1 and 2 | Fiscal year 2026 | 10 November 2027 (proposed) |
| Reasonable assurance on Scope 1 and 2 | Fiscal year 2029 | 2030 |
| Limited assurance on Scope 3 | Fiscal year 2029 | 2030 |
The 10 November 2026 date, the December fee notice and the November 2027 deadline all sit in text that awaits Office of Administrative Law approval or a Board vote.
Senate Bill 261 requires companies with revenue above USD 500 million that do business in California to publish biennial climate-related financial risk reports. Since the Ninth Circuit's 18 November 2025 order, CARB has stopped enforcing the 1 January 2026 deadline and will set an alternate date after the appeal is decided; companies can file voluntarily through CARB's docket. The court heard argument on 9 January 2026 and has issued no merits decision.
1. Supply-chain ripple across the Americas and Asia. Reporting entities include the largest United States retailers, food and beverage groups and manufacturers. Their 2027 Scope 3 reports draw on supplier data from Mexico, Canada, Latin America and Asia, so growers, processors and packagers in those regions receive data requests on a California timetable.
2. The operative United States emissions rule. Revenue and California presence decide who reports, so Senate Bill 253 functions as a national regime. Companies already reporting under the EU's Corporate Sustainability Reporting Directive, IFRS S2 in Mexico or Australia's AASB S2 reuse the same Greenhouse Gas Protocol inventory, since all of them rest on it.
3. A template for other states. New York, New Jersey and Illinois have introduced bills modelled on Senate Bill 253. CARB's choices on Scope 3 phasing and assurance standards are the reference point those bills copy.
The 2026 filing is a floor. The 2027 report, with limited assurance on Scope 1 and 2 and five Scope 3 categories, is the first full test, and it covers fiscal year 2026 data being generated now.
Establish your greenhouse gas inventory on the Greenhouse Gas Protocol. Set organisational boundaries, global warming potential values and emission factor sources now and document them, because CARB proposes requiring disclosure of methodology and measurement uncertainty from 2027.
Map your value-chain exposure. If your customers include United States companies above USD 1 billion in revenue, their Scope 3 numbers include you from fiscal year 2026 data. If you are a reporting entity, start with the five proposed categories and identify which suppliers hold the activity data.
Build assurance-ready processes early. Source-data traceability, methodology documentation and review controls need to be in place during measurement, well before the limited assurance engagement for the November 2027 report starts. Reasonable assurance follows in 2030.
Build on the frameworks you already use. CDP responses, Corporate Sustainability Reporting Directive reports and IFRS S2 disclosures all rest on the Greenhouse Gas Protocol, and the statute accepts reports prepared for other regimes as long as they meet its requirements.
Terrascope's AI-powered platform helps companies operating in the United States move from baseline emissions data to audit-ready disclosures, including Frutura, the fresh produce group that unified six business units across the United States and Latin America on one platform and measured its FY2023 and FY2024 footprints on a single methodology.
Scope 1, 2 and 3 emissions measurement. Integrations pull emissions data from your source systems monthly, so your inventory stays current across every entity in the consolidated report.
Audit-ready reporting. Audit Trail makes every figure traceable from data entry to disclosure, with assurance-provider access built in for the limited assurance engagements arriving with the 2027 report.
Supply-chain intelligence. Analytics shows you where your Scope 3 hotspots sit across the five proposed categories before the 2027 deadline, so supplier engagement starts with the largest sources.
Multi-framework alignment. Reporting drafts your Senate Bill 253 disclosure from the same measured data that feeds your CDP, CSRD or IFRS S2 reports, reviewed by your team before filing.
Are you ready to get ahead of California's SB 253 requirements? Speak to a Terrascope expert and see how we help companies move from baseline emissions data to audit-ready disclosures.