For many companies doing business in California, climate disclosure is moving from “someday” to “right now”. With the first SB 253 reporting approaching, organizations should be reviewing their greenhouse gas (GHG) inventory processes, governance structures, and reporting readiness.
A Quick Overview of SB 253 Applicability
- Applies to U.S.-based public and private companies with more than $1 billion in annual revenue that do business in California.
- Covered companies must publicly disclose Scope 1 and Scope 2 GHG emissions beginning in 2026, followed by Scope 3 emissions in 2027.
- Reporting must follow the Greenhouse Gas Protocol, the globally recognized standard for corporate GHG accounting.
It’s important to note: The California Air Resources Board (CARB) recently moved the first Scope 1 and Scope 2 emissions reporting deadline from August 10, 2026, to November 10, 2026.
“The deadline extension gives companies more time, but it should not change the urgency,” said Lisa Becker, sustainability advisor at Pinion. “Organizations that have not started gathering emissions data may face a tight timeline to build reporting processes, review data quality, and prepare disclosures.”
Aligning Governance of Climate Disclosures With Financial Reporting
SB 253 is also pushing climate reporting closer to the rigor of financial reporting. Data that may have once lived primarily with sustainability teams will likely need stronger documentation, controls, and management review. Investors, customers, and regulators are paying closer attention, so companies should be prepared to explain not only their numbers, but how those numbers were developed.
Even though the first year focuses on Scope 1 and Scope 2 emissions, Scope 3 should not be left for later. In many food and agriculture companies, most emissions sit in the value chain — and gathering supplier data takes time. Companies that begin engaging suppliers now will be better positioned for 2027 reporting and future emissions reduction work.
Preparing for Future Assurance Requirements
Assurance readiness is an important consideration as organizations who begin preparing now may reduce future compliance challenges while increasing stakeholder confidence. SB 253 will phase in independent assurance requirements, with verification beginning for the 2027 reporting year.
To reduce future pressure, companies can begin by documenting methodologies, assumptions, audit trails, and internal controls now. Early conversations with an assurance provider can help identify data gaps, process weaknesses, and areas requiring additional documentation before reporting deadlines arrive. As investors, customers, and regulators place increasing reliance on climate disclosures, assurance can also enhance credibility and demonstrate a commitment to transparent and reliable reporting.
Preparing Beyond Compliance
SB 253 is more than a compliance requirement.
“The work companies do now can create value beyond the first filing,” Becker said. “A well-built GHG accounting process can support climate risk management, customer requests, sustainability reporting, target setting and future assurance.”
CARB has emphasized interoperability with other disclosure frameworks, making early investment in robust GHG accounting processes increasingly valuable.
As the November deadline approaches, companies that treat SB 253 as a strategic data and governance initiative and act early will be better positioned to meet reporting requirements and support broader sustainability objectives.
Whether you’re evaluating applicability, strengthening GHG accounting processes, preparing for Scope 3 reporting, or assessing assurance readiness, our sustainability team can help you navigate the changes and build a roadmap for long-term reporting success. Contact our team to start a conversation.
