California SB 253 (Climate Corporate Data Accountability Act)
SB 253 is a California law requiring companies doing business in the state with annual revenues exceeding $1 billion to report Scope 1, 2, and 3 greenhouse gas emissions annually, beginning with Scope 1 and 2 for reporting year 2026 and Scope 3 for reporting year 2027.
California's Climate Corporate Data Accountability Act (SB 253) is one of the most significant US climate disclosure laws. It applies to any U.S. entity — regardless of where it is headquartered — that does business in California and has total annual revenues exceeding $1 billion.
The law requires GHG Protocol-aligned emissions reporting: Scope 1 and 2 beginning in 2026, with Scope 3 following in 2027. Reports must be filed with the California Air Resources Board (CARB) and be verified by an independent third party. Scope 1 and 2 require limited assurance initially, moving to reasonable assurance; Scope 3 requires limited assurance.
SB 253 is notable for requiring Scope 3 from all covered entities — a broader mandate than CSRD (which applies only to material categories) or the SEC rule (which initially deferred Scope 3). This means companies will need robust supply chain data collection capabilities.
The law includes a safe harbor provision for Scope 3 data based on reasonable efforts and best-available data. Companies should document their methodology, data sources, and improvement plans to benefit from this provision. Platforms like Gravity that maintain evidence trails and track data quality progression help companies demonstrate the "reasonable efforts" required.
Frequently asked questions
What is California SB 253? +
Who does SB 253 apply to? +
SB 253 applies to any entity doing business in California with annual revenues exceeding $1 billion, regardless of where the company is headquartered. This captures thousands of domestic and international companies.
Does SB 253 require Scope 3? +
Yes, SB 253 requires Scope 3 reporting beginning with reporting year 2027, with independent third-party limited assurance. It includes a safe harbor provision for Scope 3 based on reasonable efforts and best-available data.
Related terms
Carbon Accounting
Carbon accounting is the systematic process of measuring, recording, and reporting the greenhouse gas (GHG) emissions produced by an organization, product, or activity. It follows standardized methodologies — most commonly the GHG Protocol — to quantify emissions across Scope 1 (direct), Scope 2 (purchased energy), and Scope 3 (value chain) categories, producing an auditable inventory that underpins disclosure, reduction planning, and regulatory compliance.
Scope 3 Emissions
Scope 3 emissions are all indirect greenhouse gas emissions that occur in an organization's value chain — both upstream (suppliers, purchased goods, business travel, employee commuting) and downstream (product use, end-of-life treatment, investments). Scope 3 typically represents 70–90% of a company's total carbon footprint.
GHG Protocol
The GHG Protocol is the world's most widely used greenhouse gas accounting standard. Developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD), it provides frameworks for organizations, cities, and countries to measure and manage their emissions across three scopes.
CSRD (Corporate Sustainability Reporting Directive)
The Corporate Sustainability Reporting Directive (CSRD) is the European Union's mandatory sustainability reporting law. It requires companies operating in the EU above certain thresholds to disclose environmental, social, and governance (ESG) information according to the European Sustainability Reporting Standards (ESRS), with third-party assurance.
California SB 261 (Climate-Related Financial Risk Act)
SB 261 requires companies doing business in California with annual revenues exceeding $500 million to prepare and disclose climate-related financial risk reports aligned with TCFD recommendations, beginning in 2026.