CA SB 253: GHG Reporting Scope, Deadlines, and Penalties

California’s SB 253, the Climate Corporate Data Accountability Act, sets emissions reporting requirements for any U.S.-organized business that does business in California and had more than $1 billion in total revenue in its prior fiscal year. If that describes your company, you will file your first Scope 1 and Scope 2 greenhouse gas disclosure with the California Air Resources Board (CARB) by August 10, 2026, add Scope 3 in 2027, have the numbers verified by an independent third party, and pay an annual administrative fee capped at $1,000. The statute lives at Health and Safety Code Section 38532, and CARB can fine nonfilers up to $500,000 per reporting year.

Does SB 253 Apply to Your Company

Two tests have to be met. First, the entity must be organized under U.S. federal or state law and have had total annual revenues exceeding $1 billion in the prior fiscal year. The form of the entity does not matter: corporations, partnerships, LLCs, and other structures all qualify once they clear the revenue line.¹ Being headquartered outside California, or outside the United States at the parent level, does not get a qualifying U.S. entity out of the obligation.

Second, the entity must be “doing business” in California. The law uses the same framework California applies for tax purposes: generally, a company qualifies if its California sales, property, or payroll exceeds annually adjusted thresholds, or if it actively engages in transactions for financial gain within the state. For 2025, the Franchise Tax Board set the sales threshold at $757,070 and the property and payroll thresholds at $75,707 each.² The 2026 figures had not been published at the time of writing but usually move up modestly each year.

If your company sits near the billion-dollar line, run the numbers early. Discovering an obligation after August 10, 2026 is not a comfortable position.

What You Have to Measure

SB 253 adopts the three-scope framework from the Greenhouse Gas Protocol.

Scope 1 is direct emissions from sources the company owns or controls: fuel burned in company vehicles, on-site combustion, manufacturing processes, natural gas heating, and similar operations, wherever located.

Scope 2 is indirect emissions from electricity, steam, heating, or cooling the company purchases. The emissions physically occur at the power plant, but your consumption drives them.

Scope 3 is everything else indirect across the upstream and downstream value chain: purchased goods and services, business travel, employee commutes, freight, and the processing and end use of products the company sells.¹ For most large companies Scope 3 is by far the largest category, because it sweeps in suppliers, distributors, and customer behavior you do not control. That is why Scope 3 has a later start date and its own safe harbor.

How You Have to Measure It

Companies cannot design their own methodology. Emissions must be measured and reported in conformance with the Greenhouse Gas Protocol, specifically the Corporate Accounting and Reporting Standard for Scope 1 and 2 and the Corporate Value Chain (Scope 3) Accounting and Reporting Standard.¹ For Scope 3, the law expressly allows industry-average data, proxy data, and other generic data sources, so you do not need primary data from every supplier.

Self-certification is not permitted. An independent third-party assurance provider must verify the numbers before submission, and that provider’s full report, including its name, is filed with the emissions disclosure.¹ The depth of that review tightens over time. For the first filings in 2026, Scope 1 and 2 need limited assurance, a baseline check that the data is free from material misstatement. By 2030, the standard rises to reasonable assurance, closer in rigor to a financial statement audit.³

Deadlines, Where to File, and Fees

CARB set the first Scope 1 and Scope 2 reporting deadline for August 10, 2026, covering the entity’s prior fiscal year.³ Scope 3 reporting begins in 2027, with the specific date to be set by CARB through rulemaking.¹ Reports are then due annually on the same schedule.

Disclosures go to an emissions reporting organization (a nonprofit CARB may contract with to run the program) or directly to CARB if no such contract exists. Either way, the filings are posted on a public digital platform accessible to investors, consumers, and the general public.⁴ CARB posted proposed regulation text in December 2025 and has been taking public comment, so procedural details may continue to shift as the rules are finalized.

Each reporting entity pays an annual administrative fee to CARB, capped by statute at $1,000 per year.⁵

Parent-Subsidiary Consolidation

A 2024 amendment allows reports to be consolidated at the parent company level. If a subsidiary independently clears $1 billion in revenue and does business in California, it does not have to file separately as long as its emissions are included in the parent’s consolidated disclosure. This matches how most large corporate families already track emissions internally and avoids duplicative filings.

Safe Harbor for Scope 3

Because Scope 3 depends on data from suppliers, customers, and other parties outside the reporting entity’s control, the statute includes two important protections. A reporting entity will not face penalties for misstatements in Scope 3 disclosures provided the data was prepared with a reasonable basis and disclosed in good faith.¹ Between 2027 and 2030, Scope 3 penalties can be imposed only for outright nonfiling, not for late filings or data quality problems. Companies making a genuine effort are shielded; companies ignoring the obligation are not.

Penalties for Noncompliance

CARB can impose administrative penalties for nonfiling, late filing, or other failures to meet SB 253’s requirements, up to $500,000 per reporting year.¹ In setting the fine, CARB must consider the entity’s past and present compliance history and whether it took good-faith steps to comply.

For Scope 1 and Scope 2, penalties can apply to nonfiling, late filing, or inadequate reporting from the first year. For Scope 3, as noted, only nonfiling triggers penalties through 2030; after that, the full penalty range extends to Scope 3 as well.

SB 261 Is a Separate Obligation

SB 253 covers emissions data. It does not cover climate-related financial risk, which is governed by a companion statute, SB 261, codified at Health and Safety Code Section 38533. SB 261 reaches a broader group of companies, those with annual revenues exceeding $500 million that do business in California, and requires a biennial report on climate-related financial risks and the measures adopted to reduce or adapt to them. Insurance companies regulated by the California Department of Insurance are exempt.⁶ The first SB 261 report was due by January 1, 2026, posted on the entity’s own website, with a link submitted to CARB’s public docket by July 1, 2026. Most companies above the $1 billion SB 253 line also owe an SB 261 report, and the two obligations should be planned together.

1
California Legislative Information. California Health and Safety Code HSC 38532
2
Franchise Tax Board. Doing Business in California
3
California Air Resources Board. California Corporate Greenhouse Gas Reporting and Climate Related Financial Risk Disclosure Programs
4
California Legislative Information. SB 253 Climate Corporate Data Accountability Act
5
California Air Resources Board. 2023 Senate Bill 253 (Wiener, Scott), Climate Corporate Data Accountability Act (Chaptered)
6
California Air Resources Board. Climate Related Financial Risk Disclosures: Draft Checklist