Climate Corporate Data Accountability Act (SB 253)  

California’s Senate Bill 253 (SB 253), approved in 2023 and amended by SB 219, aims to increase transparency and accountability surrounding corporate greenhouse gas (GHG) emissions, criteria pollutants, and toxic air contaminants. The bill requires companies that meet certain revenue criteria to publicly report and verify their direct and indirect GHG emissions data. This legislative initiative, in conjunction with SB 261, aligns with California’s greater climate goals which seek to foster increased clarity surrounding climate initiatives and motivate businesses to take stronger action towards their sustainability and emissions goals.

Who Must Comply?  

These requirements are applicable to any private or public entity that does business1 in California and has a revenue that exceeds $1 billion USD. Historically, public companies have been held to a certain standard of financial reporting; however, SB 253 expands these standards to include environmental disclosures for both public and private businesses. The listed criteria are designed to target large entities that are expected to have a more significant environmental impact than businesses that do not meet the revenue criteria. It is estimated that SB 253 will be applicable to more than 5,000 companies that are currently doing business within California.

When Does Compliance Begin?

Starting in 2026, on or before a date still to be determined by the California Air Resources Board (CARB), covered entities are required to publicly report their previous fiscal year Scope 1 and 2 emissions (e.g., 2025 data) on an annual basis. Beginning in 2027, the annual disclosure requirement expands to include Scope 3 emissions.

It is important to note that the Enforcement Notice released by CARB on December 5, 2024, recognizes the lead time necessary to collect and calculate such information for the first time. As a result, CARB is exercising enforcement discretion for the first cycle (2026), provided the entity demonstrates good faith efforts to comply.

What Requirements Must be Met?  

The focus of SB 253 is for large entities to collect, verify, and disclose their GHG emissions in a consistent, verifiable manner.

1. Scope 1, 2, and 3 GHG Emissions:

Covered entities must calculate all direct and indirect GHG emissions in compliance with a globally accepted reporting standard, such as the GHG Protocol, and in an annual timeframe moving forward.

• For Scope 1 and 2 emissions, this data must be calculated and reported starting in 2026 with prior fiscal year (2025) data.
• Scope 3 must be disclosed in 2027 with prior fiscal year (2026) emissions data.

2. Third-Party Assurance:

To demonstrate data accuracy and provide confidence in the results, SB 253 mandates third-party assurance. The timing and level of assurance required is designed to increase, reflecting maturity of the covered entities’ emissions programs.

• Scope 1 and 2 emissions must receive limited assurance by a third party beginning in 2026 (2025 data) and reasonable assurance beginning in 2030 (2029 data).
• Scope 3 emissions must receive limited assurance beginning in 2030 (2029 data); however, CARB is reviewing current and expected Scope 3 trends.

3. Public Disclosure:

Once emissions have been calculated and received assurance, the results must be publicly disclosed. While the CARB is still discussing how and where to publish, we recommend publication on the reporting entity’s website. More information is expected to be published by CARB in July 2025.

If compliance with the above items is not met, the bill has authorized the California Attorney General to leverage fines of up to $500,000 for failure to report emissions data.

Why Does This Matter?  

With growing demand for transparency and accountability of a company’s climate-related impacts, it is important for organizations to present information that is accurate, verifiable, and consistent. The implications for failing to respond not only present financial penalties but can also influence stakeholders’ decision-making strategies and have lasting negative reputational impacts. By assessing such information, companies are able to better understand their impacts and leverage the data to inform their own sustainability strategy, demonstrating leadership and maturity of their programs.

Ready to get Started?  

Discover how Antea Group can assist you with creating thorough and assurance-ready GHG inventories and provide support throughout the audit process itself.

Learn more about our Greenhouse Gas and Climate Change Advisory Services.