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Definition

California Climate Corporate Data Accountability Act (SB 253) Definition

The California Climate Corporate Data Accountability Act (SB 253) requires qualifying U.S.-formed businesses doing business in California to disclose annual Scope 1, Scope 2, and, from 2027, Scope 3 greenhouse gas emissions.

What is the California Climate Corporate Data Accountability Act (SB 253)?

SB 253 is the California law codified at Health and Safety Code section 38532. It covers a corporation, partnership, limited liability company, or other business entity formed under U.S. law when its total annual revenue exceeds USD 1 billion and it does business in California.

The law starts with annual Scope 1 and Scope 2 disclosure for the prior fiscal year in 2026. Scope 3 disclosure starts in 2027 on a schedule CARB will specify. CARB's July 2026 modified text proposes 10 November 2026 for the first filing, but final approval had not been reached on 19 August 2026. Check the current date in the United States reporting guide.

Why does SB 253 matter to you?

If your entity passes all three tests, you must disclose company-wide emissions publicly and pay the annual fee. Section 38532 also requires an independent assurance report, but CARB says the first 2026 submission may use data held or collected by 5 December 2024 whether or not that data received limited assurance. Keep the legal entity name, prior fiscal year, reporting boundary (the operations included), separate Scope 1 and Scope 2 totals in metric tonnes of CO2e, calculation method, source records, and assurance-provider details together.

Start with the legal entity, not the brand or global group. CARB's proposed definition measures revenue at the individual entity level and uses the lower of its two previous complete fiscal years. A preliminary CARB list does not replace your own test.

How does SB 253 work?

  • Test the entity: record its place of formation, revenue for both prior complete fiscal years, and the facts showing whether it does business in California.
  • Set the reporting year: For the 2026 report, use the fiscal year that ends in 2026 when its year-end falls on or before 1 February. If its year-end falls after 1 February, use the fiscal year that ended in 2025, unless more recent data is available and you choose to use it.
  • Prepare the inventory: report Scope 1 and Scope 2 separately for 2026. Map Scope 3 now because annual Scope 3 disclosure begins in 2027.
  • Plan assurance: section 38532 requires independent limited assurance for Scope 1 and Scope 2 beginning in 2026 and reasonable assurance beginning in 2030. CARB has announced enforcement discretion for good-faith first-cycle submissions based on data held or collected by 5 December 2024.

What mistakes should you avoid?

  • Applying the USD 1 billion test to a foreign parent and assuming every subsidiary has the same filing duty.
  • Treating 10 November 2026 as final before CARB completes the pending rulemaking.
  • Combining Scope 1 and Scope 2 into one unlabeled number or omitting the fiscal year, boundary, method, and source records.
  • Treating first-cycle enforcement discretion as a permanent exemption from the statute.

Does SB 253 apply to a company based outside California?

It can. A U.S.-formed entity can qualify if its revenue exceeds USD 1 billion and it does business in California, even when its headquarters and emissions sources are elsewhere. An entity formed only under foreign law is not itself a reporting entity under the statutory formation test.

Can a parent company submit one SB 253 report?

Yes. Section 38532 permits a consolidated parent report. An in-scope subsidiary does not need a separate report when its parent includes it, but the consolidated submission must still cover every qualifying subsidiary and the required emissions information.

What can you submit for the first SB 253 report?

CARB's proposed first-cycle rule permits the standard Scope 1 and Scope 2 report or, for 2026 only, data the entity possessed or was collecting by 5 December 2024. An entity with neither may submit a statement on company letterhead. These options apply only to the 2026 report and do not carry into 2027.

Worked example

Because an entity formed only under foreign law is outside SB 253's reporting-entity definition, this example uses a Delaware pharmaceutical packaging supplier. The supplier is commercially domiciled in California, meaning its business is directed or managed from California.

Suppose the supplier records USD 1.18 billion and USD 1.06 billion of gross receipts in its two previous complete fiscal years. Under proposed sections 96072(a)(8) and 96072(a)(11), its California commercial domicile meets the doing-business test and the lower revenue figure is USD 1.06 billion. That is USD 60 million above the USD 1 billion threshold. The entity is U.S.-formed, exceeds the revenue threshold, and does business in California, so it passes three of three proposed applicability tests.

Its fiscal year ended on 31 December 2025. For the proposed 10 November 2026 filing, it reports 4,600 metric tonnes CO2e of Scope 1 and 2,900 metric tonnes CO2e of Scope 2 as separate figures. The arithmetic control total is 4,600 + 2,900 = 7,500 metric tonnes CO2e. It maps 18,400 metric tonnes CO2e of Scope 3 for the reporting cycle beginning in 2027 rather than adding it to the 2026 filing.

Where you'll meet it

SB 253 reporting entity test: U.S.-formed, more than USD 1 billion annual revenue, and doing business in CaliforniaHealth and Safety Code section 38532(b)(2); proposed 17 CCR section 96072(a)(11)SB 253 first annual Scope 1 and Scope 2 disclosure for the prior fiscal yearHealth and Safety Code section 38532(c)(2)(A)(i)(I); proposed 17 CCR section 96076(a)-(c)SB 253 annual Scope 3 disclosure beginning in 2027Health and Safety Code section 38532(c)(2)(A)(i)(II)SB 253 independent assurance for Scope 1 and Scope 2Health and Safety Code section 38532(c)(2)(F)(i)-(ii); CARB FAQ question 20

Related terms

Scope 1 Emissions

Scope 1 emissions are greenhouse gases released directly from sources your company owns or controls, including fuel-burning equipment and vehicles, industrial processes, and refrigerant or other gas leaks.

Scope 2 Emissions

Scope 2 emissions are the indirect greenhouse gas emissions from generating the electricity, steam, heat, and cooling your company buys and uses.

Scope 3 Emissions

Scope 3 emissions are the indirect greenhouse gas emissions from goods, services, transport, product use, investments, and other upstream and downstream activities outside your company's Scope 1 and Scope 2 boundary.

GHG Protocol

The GHG Protocol is a suite of standards for deciding which greenhouse gas emissions belong in a company inventory, classifying them as Scope 1, 2 or 3, calculating them, and reporting the methods and boundaries used.

Sources

  • California Air Resources Board

    Statutory entity test, annual Scope 1, Scope 2, and Scope 3 disclosure, and current rulemaking status

    2026-08-19

  • California Air Resources Board

    Proposed sections 96071, 96072, 96074, and 96076 on applicability, revenue, records, the 10 November 2026 filing date, and applicable fiscal year

    2026-08-19

  • California Air Resources Board

    Parent and subsidiary treatment, first-cycle submission options, and Scope 1 and Scope 2 assurance levels in question 20

    2026-08-19

Last verified 2026-08-19

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California Climate Corporate Data Accountability Act (SB 253) Definition | Keslio