On March 23, 2026, the California Air Resources Board (CARB) held a public workshop on California's Corporate Greenhouse Gas Reporting Program under SB 253. With the first reporting deadline just months away, this workshop brought critical clarity and raised questions that companies need to be tracking closely. Here is what you need to know.
SB 253, the California Corporate Climate Data Accountability Act (Health and Safety Code § 38532), requires large companies doing business in California to publicly disclose their greenhouse gas (GHG) emissions annually. The law applies to U.S.-based entities doing business in California with annual revenues exceeding $1 billion.
Required disclosures cover all three emissions scopes:
Scope 1: Direct emissions from owned or controlled sources
Scope 2: Indirect emissions from purchased electricity, heat, or steam
Scope 3: Value chain emissions, upstream and downstream
This legislation is one of the most significant corporate climate disclosure requirements in U.S. history. And it is actively moving forward.
To understand where things stand, it helps to think in two phases.
In February 2026, CARB's Board adopted its Initial Fee Regulation, the first formal regulation under SB 253. This established definitions for "doing business in California" and revenue thresholds, and the first-year Scope 1 and 2 reporting deadline of August 10, 2026.
For the 2026 reporting cycle, here is what companies need to know:
One important element that was not addressed in detail at the March workshop but is directly relevant to companies preparing for 2026 is CARB's December 5, 2024, Enforcement Notice and what it means for your reporting obligations this year.
CARB has confirmed it will exercise enforcement discretion for first-year submissions, but the framework is more nuanced than a blanket "good faith" pass. Your situation depends on where your company stood on December 5, 2024.
If you were already collecting emissions data as of December 5, 2024, you are expected to submit a Scope 1 and 2 report by August 10, 2026. CARB will accept what you have and will not penalize for incomplete data, as long as you can demonstrate a genuine effort toward compliance.
If you were not collecting emissions data and were not planning to, as of December 5, 2024, you are not required to submit a full emissions report in 2026. Your options are: 1. Submit a statement on company letterhead to CARB confirming that you did not submit a report, and that you were not collecting or planning to collect data at the time the Enforcement Notice was issued. 2. Voluntarily submit a Scope 1 and 2 report for 2026. With the August 10 deadline still months away, there is time to get a first report done, especially when working with an experienced partner.
A voluntary 2026 submission does more than check a box: it builds the data foundation, internal processes, and documentation trail that will make 2027 reporting, when limited assurance is required, significantly easier. CARB will open the reporting docket near the August 10 deadline, where both reports and statements can be submitted.
CARB is proposing two approaches for how companies set the boundary of what they report.
Companies will need to document and explain their chosen approach, a question of methodology that has significant implications for what ends up in your inventory.
One of the most consequential decisions CARB is considering concerns how Scope 3 reporting will be phased in. Three regulatory options were presented.
Option 1 - Broad Applicability: All reporting entities report on all 15 Scope 3 categories starting in 2027, with flexibility to exclude de minimis categories with explanation.
Option 2 - Sectoral Phase-In: Scope 3 reporting initially required only for transportation and industrial sectors (including manufacturing, technology, energy, and cement), expanding over time.
Option 3 - Category Phase-In: Start with the most commonly reported Scope 3 categories (Business Travel, Purchased Goods and Services, Fuel and Energy Activities, Employee Commuting, Waste) and expand to additional categories over time.
For companies in manufacturing, consumer goods, and packaging, sectors CEMAsys works with closely, Scope 3 category coverage matters enormously. Your supply chain emissions strategy needs to account for which option CARB ultimately adopts.
CARB is proposing flexibility across four accounting methods for Scope 3.
For most companies starting from scratch, spend-based is the lowest barrier to entry, but it is also the least accurate. Activity-based and supplier-specific methods produce higher-quality data and will be increasingly expected by investors and verifiers. Building toward supplier-specific data, at least for your most material categories, is a sound long-term strategy.
For Scope 1 and 2 starting in 2027, CARB proposes accepting several limited assurance standards, including AA1000AS v3, AICPA AT-C Section 210 or AT-C 205, ISAE 3000/ISAE 3410 (through December 2026), ISSA 5000 (effective December 2026), and ISO 14064-3:2019.
ISSA 5000 is particularly notable: it is being adopted across the EU, UK, Australia, Japan, and over a dozen other jurisdictions. If your company reports under CSRD or other international frameworks, aligning to ISSA 5000 likely makes sense for consistency.
A question often raised by companies preparing for SB 253: Can we exclude certain Scope 3 categories? CARB's answer is yes, but only in limited situations, with appropriate explanation.
De minimis exclusions are being considered under Option 1, but they are not a blanket exemption. Companies will need to substantiate why a category is not material or feasible. This is an area where guidance from an experienced advisory partner matters, the bar for what qualifies as de minimis needs careful assessment.
CARB presented initial cost estimates based on adapted SEC rulemaking data, adjusted for California inflation. The figures are worth benchmarking against your internal projections:
Note that Year 1 costs are estimated to be meaningfully higher than Year 2 and Year 3, due to the one-time investment in establishing data systems and procedures. CARB also notes that at the maximum estimated cost, the annual burden represents less than 0.02% of the $1 billion revenue threshold - a point likely to be referenced in any future legal or regulatory debate.
If your first Scope 1 and 2 report is due August 10, 2026:
Looking ahead to 2027 and beyond:
CEMAsys provides both the platform and the advisory expertise to navigate SB 253 compliance - from initial Scope 1 and 2 inventory through Scope 3 strategy and assurance readiness.
If you are preparing for your first SB 253 report or planning ahead for 2027 requirements, contact our team to discuss where you stand and what you need.
CEMAsys is a leading ESG and carbon accounting platform and advisory provider. Learn more about our California Climate Disclosure services at portal.cemasys.com/sb-253-and-sb-261.
Public comments on the March 2026 CARB workshop are due April 13, 2026. Submit via the public docket or email ClimateDisclosure@arb.ca.gov.
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SB 253, the California Corporate Climate Data Accountability Act (Health and Safety Code § 38532), requires large companies doing business in California to publicly disclose their greenhouse gas (GHG) emissions annually. The law applies to U.S.-based entities doing business in California with annual revenues exceeding $1 billion.
Required disclosures cover all three emissions scopes:
Scope 1: Direct emissions from owned or controlled sources
Scope 2: Indirect emissions from purchased electricity, heat, or steam
Scope 3: Value chain emissions, upstream and downstream
This legislation is one of the most significant corporate climate disclosure requirements in U.S. history. And it is actively moving forward.
To understand where things stand, it helps to think in two phases.
In February 2026, CARB's Board adopted its Initial Fee Regulation, the first formal regulation under SB 253. This established definitions for "doing business in California" and revenue thresholds, and the first-year Scope 1 and 2 reporting deadline of August 10, 2026.
For the 2026 reporting cycle, here is what companies need to know:
One important element that was not addressed in detail at the March workshop but is directly relevant to companies preparing for 2026 is CARB's December 5, 2024, Enforcement Notice and what it means for your reporting obligations this year.
CARB has confirmed it will exercise enforcement discretion for first-year submissions, but the framework is more nuanced than a blanket "good faith" pass. Your situation depends on where your company stood on December 5, 2024.
If you were already collecting emissions data as of December 5, 2024, you are expected to submit a Scope 1 and 2 report by August 10, 2026. CARB will accept what you have and will not penalize for incomplete data, as long as you can demonstrate a genuine effort toward compliance.
If you were not collecting emissions data and were not planning to, as of December 5, 2024, you are not required to submit a full emissions report in 2026. Your options are: 1. Submit a statement on company letterhead to CARB confirming that you did not submit a report, and that you were not collecting or planning to collect data at the time the Enforcement Notice was issued. 2. Voluntarily submit a Scope 1 and 2 report for 2026. With the August 10 deadline still months away, there is time to get a first report done, especially when working with an experienced partner.
A voluntary 2026 submission does more than check a box: it builds the data foundation, internal processes, and documentation trail that will make 2027 reporting, when limited assurance is required, significantly easier. CARB will open the reporting docket near the August 10 deadline, where both reports and statements can be submitted.
CARB is proposing two approaches for how companies set the boundary of what they report.
Companies will need to document and explain their chosen approach, a question of methodology that has significant implications for what ends up in your inventory.
One of the most consequential decisions CARB is considering concerns how Scope 3 reporting will be phased in. Three regulatory options were presented.
Option 1 - Broad Applicability: All reporting entities report on all 15 Scope 3 categories starting in 2027, with flexibility to exclude de minimis categories with explanation.
Option 2 - Sectoral Phase-In: Scope 3 reporting initially required only for transportation and industrial sectors (including manufacturing, technology, energy, and cement), expanding over time.
Option 3 - Category Phase-In: Start with the most commonly reported Scope 3 categories (Business Travel, Purchased Goods and Services, Fuel and Energy Activities, Employee Commuting, Waste) and expand to additional categories over time.
For companies in manufacturing, consumer goods, and packaging, sectors CEMAsys works with closely, Scope 3 category coverage matters enormously. Your supply chain emissions strategy needs to account for which option CARB ultimately adopts.
CARB is proposing flexibility across four accounting methods for Scope 3.
For most companies starting from scratch, spend-based is the lowest barrier to entry, but it is also the least accurate. Activity-based and supplier-specific methods produce higher-quality data and will be increasingly expected by investors and verifiers. Building toward supplier-specific data, at least for your most material categories, is a sound long-term strategy.
For Scope 1 and 2 starting in 2027, CARB proposes accepting several limited assurance standards, including AA1000AS v3, AICPA AT-C Section 210 or AT-C 205, ISAE 3000/ISAE 3410 (through December 2026), ISSA 5000 (effective December 2026), and ISO 14064-3:2019.
ISSA 5000 is particularly notable: it is being adopted across the EU, UK, Australia, Japan, and over a dozen other jurisdictions. If your company reports under CSRD or other international frameworks, aligning to ISSA 5000 likely makes sense for consistency.
A question often raised by companies preparing for SB 253: Can we exclude certain Scope 3 categories? CARB's answer is yes, but only in limited situations, with appropriate explanation.
De minimis exclusions are being considered under Option 1, but they are not a blanket exemption. Companies will need to substantiate why a category is not material or feasible. This is an area where guidance from an experienced advisory partner matters, the bar for what qualifies as de minimis needs careful assessment.
CARB presented initial cost estimates based on adapted SEC rulemaking data, adjusted for California inflation. The figures are worth benchmarking against your internal projections:
Note that Year 1 costs are estimated to be meaningfully higher than Year 2 and Year 3, due to the one-time investment in establishing data systems and procedures. CARB also notes that at the maximum estimated cost, the annual burden represents less than 0.02% of the $1 billion revenue threshold - a point likely to be referenced in any future legal or regulatory debate.
If your first Scope 1 and 2 report is due August 10, 2026:
Looking ahead to 2027 and beyond:
CEMAsys provides both the platform and the advisory expertise to navigate SB 253 compliance - from initial Scope 1 and 2 inventory through Scope 3 strategy and assurance readiness.
If you are preparing for your first SB 253 report or planning ahead for 2027 requirements, contact our team to discuss where you stand and what you need.
CEMAsys is a leading ESG and carbon accounting platform and advisory provider. Learn more about our California Climate Disclosure services at portal.cemasys.com/sb-253-and-sb-261.
Public comments on the March 2026 CARB workshop are due April 13, 2026. Submit via the public docket or email ClimateDisclosure@arb.ca.gov.
Amalie is the Managing Director of CEMAsys US, where she leads the company's growth across North America. She is passionate about helping businesses cut through the complexity of ESG and climate regulations and build the systems, expertise, and infrastructure that make compliance not just possible but impactful.
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