CARB Fleshes Out Proposed SB 253 GHG Emissions Reporting and Assurance Requirements for 2027 and Beyond, and More, at July 21 Public Meeting

The California Air Resources Board held another public meeting on SB 253 yesterday. At the meeting and in the accompanying materials, CARB presented its latest thinking on SB 253 reporting and assurance requirements starting in 2027. It also provided additional information on this year’s reporting, among other things. CARB’s SB 253 regulatory proposal and additional meeting commentary are discussed in detail in this post.

SB 253 is more formally known as the Climate Corporate Data Accountability Act (California Health & Safety Code Section 38532). It requires annual public disclosure of Scope 1, 2 and 3 greenhouse gas emissions by US-organized entities doing business in California with total annual revenues exceeding $1 billion. SB 253 is further discussed in numerous Ropes & Gray posts available here. 

An Update on 2026 Reporting 

On February 26, the CARB board voted to approve the draft regulation under SB 253 and SB 261 that was proposed in December 2025. That regulation, which contained foundational definitions and addressed selected requirements for 2026 SB 253 reporting, is further discussed in this Ropes & Gray post.

The final regulatory package was submitted to the California Office of Administrative Law on May 20 but was subsequently withdrawn by CARB to allow for limited further clarifying changes, after which the package will be resubmitted. In connection with the withdrawal, CARB extended this year’s SB 253 reporting deadline by three months to November 10. The re-proposal and finalization of the 2026 regulation are discussed in this Ropes & Gray post.

CARB plans to share additional guidance materials by September 1 to support 2026 reporting. These materials will include a voluntary online intake form/platform for submitting GHG emissions and fee contact information and an accompanying guidance document and instructional video.

Reporting – Looking Ahead to 2027 and Beyond

Most of CARB’s content and prepared remarks concerned its next rulemaking under SB 253. CARB staff previewed key concepts they are developing that would apply to GHG emissions reporting starting in 2027.

CARB’s proposal, which is expected to be included in a draft regulation later this year, is further discussed below. Since the rulemaking is still at the pre-proposal stage, it may continue to evolve. CARB is soliciting input on specific aspects of the regulation, as further discussed in CARB’s meeting slides. 

At the meeting, CARB staff noted that the proposal will be subject to a 45-day comment period before it is submitted to the CARB board for its consideration.

Leveraging the GHG Protocol

Under SB 253, GHG emissions are to be reported in conformance with the Greenhouse Gas Protocol standards and guidance. CARB indicated its goal is to promote interoperability to the greatest extent possible and it characterized its proposed regulatory concepts as aligning with the Greenhouse Gas Protocol, with clarifications for the California regulatory context to implement the broader directives in SB 253 and/or meet requirements of California administrative law.

Emissions Disclosures Generally

Reporting entities would be required to disclose their gross Scope 1, 2 and 3 GHG emissions generated during the reporting period, expressed in metric tons of CO2e. When preparing GHG emissions information for reports, reporting entities would be required to conduct quantification and accounting in adherence with the principles, requirements and guidance provided by the Greenhouse Gas Protocol Corporate Standard, Scope 2 Guidance and Scope 3 Standard.

CARB indicated at its March public meeting on SB 253 that it would be developing standardized templates for ongoing reporting and that updated templates would be published this summer for public comment. At yesterday’s meeting, CARB appeared to be moving off this approach. 

Scope 2 Reporting 

In accordance with the Scope 2 Guidance, reporting entities would be required to disclose Scope 2 GHG emissions expressed in metric tons of CO2 equivalent by source type, including electricity, steam, heating and cooling emissions.

In addition to CO2e, Scope 2 GHG emissions generated during the reporting period would be required to express in metric tons the following GHGs in CO2 equivalent: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulfur hexafluoride (SF6) and nitrogen trifluoride (NF3), plus the sum of those gases expressed in metric tons of CO2e, as required by the Scope 2 Guidance.

Scope 2 inventories and emissions would be required to be calculated and reported using both market-based and location-based methods. If emission factors are not available for a given region or energy source, the inventory would be required to document that omission.

The Greenhouse Gas Protocol is in the process of updating the Scope 2 Guidance, which dates back to 2015. Following nearly three years of technical development and stakeholder engagement, a three-month public consultation on the proposed updates was held late last year/early this year. A second Scope 2 consultation will be held this year. Final publication of a new Scope 2 standard is expected in 2027. 

At the meeting, CARB indicated it plans to incorporate into the SB 253 regulation the current 2015 version of the Scope 2 Guidance. CARB staff noted in response to a question that SB 253 will not dynamically update to reflect GHG Protocol developments. Incorporating updated GHGP standards and guidance will require CARB to take additional action in the future.    

Scope 3 Reporting

To phase in Scope 3 reporting and ease compliance burdens, CARB proposes requiring reporting on the five most commonly-reported categories, starting in 2027: purchased goods and services (Category 1); fuel and energy-related activities (Category 3); waste generated during operations (Category 5); business travel (Category 6); and employee commuting (Category 7). This approach is consistent with the Option 3/category phase-in floated by CARB at its March meeting. When asked at the public meeting, CARB staff declined to indicate when additional Scope 3 categories would need to be reported. 

The Scope 3 Standard guidance for calculating emissions within the foregoing categories would need to be followed.

Other categories of emissions could be voluntarily reported.

For each required Scope 3 emissions category, reporting entities would have to disclose:

• The name and number of the category as identified in the Scope 3 Standard, and a description of the activities included in the emissions inventory;

• The quantification and accounting methods and the data types used;

• The sum of the Scope 3 GHG emissions generated during the reporting period expressed in metric tons of CO2 equivalent; 

• An explanation for any emissions excluded from the Scope 3 category; and

• The percentage of emissions calculated using primary data obtained from suppliers or other members of the value chain, and identification of the quantification method used for the emissions calculated with that primary data. Reporting entities could use industry average data or spend-based methods to estimate upstream lifecycle GHG emissions, consistent with the Scope 3 Standard.

Reporting Deadline

Scope 1, 2 and 3 GHG emissions reporting for the preceding fiscal year would be due on November 10 of the reporting year. This is consistent with the 2026 due date as extended.

This year, the fiscal year to be reported depends on the reporting entity’s fiscal year-end. If a reporting entity’s fiscal year ends between January 1 and February 1, 2026, it is required to report data from the fiscal year ending in 2026. If the reporting entity's fiscal year ends after February 1, it is required to report data from the fiscal year ending in 2025. The intent behind this approach is to ensure that entities have at least six months after their fiscal year-end to prepare and submit their report. At yesterday’s meeting, CARB indicated in response to a question that companies with a fiscal year ending after February 1 are, however, permitted to submit more recent fiscal year data, which some companies may wish to do in light of the three-month reporting extension.

Although not in the meeting materials, CARB indicated at the meeting that it is considering a similar approach for future years’ reporting. 

Quantification Methodologies

Reporters would be required to disclose the GHG quantification methods and measurement approaches used for the calculation of all emissions in reports. These include:

• The consolidation approach for organizational boundaries;

• Global warming potential values and assessment report vintage;

• Emission factor sources for all calculations with key attributes (i.e., vintage, geographic and technical representativeness and uncertainty); and

• The quantification method used (e.g., direct measurement or calculation-based method), including any process-specific tools or models used.

Reporting entities would be required to assess the uncertainty associated with the quantification methodologies used to calculate emissions, including underlying data sources, assumptions and models, and report confidence intervals with data points, where applicable. If quantitative estimation of uncertainty is not feasible or would impose unreasonable burden or cost, reporting entities would be required to provide an explanation and conduct a qualitative assessment of uncertainty.

Missing and Substitute Data

Reporting entities would be required to identify missing data elements or parameters and document any substitute data sources or estimation methods used to quantify emissions in place of the missing data, including the basis for selecting the approach and any assumptions.

CARB noted that California’s Mandatory Reporting Regulation includes similar provisions. This provision is included in the SB 253 proposal for consistency across the programs. The MRR requires GHG emissions reporting by electricity generators, industrial facilities, fuel suppliers and electricity importers.

Biogenic Emissions

Biogenic CO2 emissions from the combustion, consumption or biodegradation of biomass and biomethane would be required to be reported separately from Scope 1, 2 and 3 emissions totals. CH4 and N2O emissions from biogenic sources, and all fossil fuel and industrial GHG emissions that occur in the life cycle of biogenic products or activities other than at the point of combustion, consumption or degradation (e.g., GHG emissions from processing, transportation or upstream production of biomass), would be required to be included within the relevant Scope 1, 2 or 3 emission inventories. 

Reporting entities that already report under other California regulations, such as the MRR, would be permitted to quantify biogenic emissions in accordance with the requirements of those programs. Other reporting entities would be able to quantify biogenic emissions in accordance with GHG Protocol Corporate Standard guidance, other quantification methodologies or other regulations outside California. In either case, the regulation or methodology being aligned with would be required to be disclosed. 

Reporting entities would need to disclose all tracking units, quantification methods, emission factors and other data sources used for calculating biogenic emissions. 

Reported biogenic emissions would be subject to the SB 253 assurance requirements.

Emissions Reductions or Removals

Reporting entities could also report voluntary investments (e.g., carbon credits and offsets), management activities (e.g., land management practices resulting in biological GHG sequestration) or other activities that result in fossil or biogenic emissions reductions or removals. Voluntary investments or management activities would be required to be reported separately from Scope 1, 2 and/or 3 emissions.

Prioritization of Primary Data

CARB noted that the GHG Protocol recommends that reporters prioritize primary data over secondary data. CARB is seeking feedback on how to implement this recommendation.

Excluding Data

Reporting entities would be permitted to exclude GHG emissions sources, activities, Scope 3 categories or other information where the omission, misstatement or obscuring of the information could not be reasonably expected to influence the decisions, assessments or understanding of users of the disclosure regarding the reporting entity’s GHG emissions inventory or climate-related risks, opportunities or impacts.

Reporting entities would be required to consider whether an exclusion would impair the relevance, completeness, consistency, transparency or accuracy of the reported emissions inventory. Data exclusions would be required to be assessed using both quantitative and qualitative factors.

Reporting entities would be required to explain and disclose the basis for all data exclusions. For each category, source, facility, operation or disclosure excluded, the reporting entity would be required to disclose an estimate of the emissions magnitude of exclusions, if quantifiable.

CARB is seeking feedback on whether its proposed factors are appropriate and sufficient for considering acceptable exclusions from GHG emission inventories, if additional direction is needed and if the proposed approach balances the reporting burden with the objective of providing complete and decision-useful emissions information.

Changes in Methodology

Reporting entities would need to disclose changes to GHG quantification or accounting methods made from the previous reporting year or during the current reporting period, along with the reasons for the changes. These changes may require recalculation of prior information, as further discussed in the next paragraph.

Recalculation of Prior Year Data

As context, the CARB meeting materials note that reporting entities may experience changes in reported GHG emissions from prior reporting years due to modifications in corporate structure or accounting, without any corresponding change in actual emissions, including changes to organizational boundaries, quantification methods, data sources and emission factors.

Using their first reporting year as the base year, reporting entities would be required to determine whether the cumulative effect of all structural and methodological changes would result in a change greater than 5% of the total GHG emissions for the base year. If so, emissions would be required to be recalculated for all affected previous reporting years, and the updated emissions data for those years would be required to be included in the next annual GHG emissions report along with a description of the changes that led to the recalculation.

Supplemental Information

Reporting entities would have the option to disclose, in a separate section of the SB 253 report, additional information that adds context to their emissions disclosures.

Proposed Assurance Requirements

Most of the rest of CARB’s remarks and slides focused on assurance of SB 253 reports.

CARB’s slides propose that, beginning with reports submitted in 2027, reporting entities would be required to obtain limited assurance of their disclosed Scope 1 and 2 GHG emissions, including biogenic CO2 emissions, from an independent third-party.

At yesterday’s meeting, CARB indicated in response to a question that the assurance requirement would apply to the entire submission.  

Assurance Standards

Consistent with its March proposal, CARB proposes to allow any of the following standards to be used:

• AA1000 Assurance Standard (AA1000AS v3).

• American Institute of Certified Public Accountants (AICPA AT-C Section 210). 

• International Standard on Assurance Engagements (ISAE) 3410 applied in conjunction with ISAE 3000 (Revised), for engagements commencing prior to December 15, 2026.

• International Standard on Sustainability Assurance (ISSA) 5000 for engagements commencing on or after December 15, 2026.

• International Organization for Standardization (ISO) 14064-3:2019 (with additional accreditation requirements).

The limited assurance engagement would need to be conducted in full conformance with all requirements of the applicable standard, including but not limited to engagement scope, methodology, provider qualifications, evidence gathering, independence, oversight mechanism and reporting.

Applicability to Insurance Companies

There has been a heated debate over whether SB 253 should apply to insurance companies. SB 261, California’s companion climate risk disclosure mandate, expressly exempts insurance companies from reporting. A similar exemption is not explicitly written into SB 253.

The initial regulation approved by the CARB board in February exempted insurance companies from 2026 GHG emissions reporting to avoid duplication with parallel reporting required by the California Department of Insurance. At yesterday’s meeting, CARB also noted in this context the ability to rely this year on its 2024 Enforcement Notice, which is discussed here (CARB reminded meeting attendees about the Enforcement Notice many times in response to various questions).

The resolution adopted by the CARB board in February directed staff to further investigate the alignment between CDI disclosures and greenhouse gas emissions disclosures required by SB 253. At yesterday’s meeting, CARB staff indicated that the rationale for excluding insurance companies does not carry forward to 2027. Staff concluded that CDI reporting may not satisfy the requirements of SB 253 starting with 2027, including because it does not include Scope 3 reporting or assurance requirements.

CARB is proposing that insurance entities may submit the same report to satisfy both CDI and SB 253 requirements, provided it meets the reporting requirements under CARB’s SB 253 implementing regulation. If a CDI report does not address all CARB requirements, reporting entities would be required to supplement their report with the remaining required information.

Upcoming Listening Sessions

CARB will be holding six listening sessions in August and September. The purpose of these sessions is for participants to share their experiences and concerns with CARB. CARB staff indicated that they will not be communicating new information at the sessions.

• August 5 – Data users and public interest stakeholders

• August 12 – Manufacturing, industrial, fuel and life sciences

• August 19 – Agriculture, food, beverage and forestry

• August 26 – Energy, utilities, transportation, logistics and waste management

• September 2 – Retail, consumer goods, technology and commercial services

• September 9 – Banking, finance and insurance

Further details on the sessions will be posted on CARB’s website.

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