Last updated: July 24, 2025
California Senate Bill 253 (SB 253), also known as the “Climate Corporate Data Accountability Act,” was signed into law in October 2023 by California Governor Newsom, marking a crucial moment in the establishment of mandatory emissions reporting legislation on the state level.
CA SB 253 is one of two separate bills of the Climate Accountability Package – SB 253 and SB 261 – which both aim to improve and increase corporate transparency.
Focusing on SB 253, here we outline highlights of this historic bill, what organizations it impacts, and what you can do to prepare for it.
WHAT DOES SB 253 REQUIRE?
The Climate Corporate Data Accountability Act (SB 253) applies to both public and private companies that operate in California and whose annual revenues exceed $1 billion. After undergoing amendments, the final law mandates annual emissions reporting from all scopes: direct emissions (Scope 1), emissions associated with purchased electricity (Scope 2), and indirect emissions linked to value chains (Scope 3).
These rules will be rolled out over time, starting with Scope 1 and 2 emissions being mandated in 2026, and Scope 3 emissions being mandated in 2027. Reports must adhere to Greenhouse Gas Protocol (GHG Protocol) standards for measurement and reporting. The bill also requires companies to obtain third-party assurance for emissions reporting, with limited assurance beginning in 2026 for Scope 1 and 2 emissions, increasing to reasonable assurance by 2030, and limited assurance for Scope 3 emissions beginning in 2030. This means:
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- Limited assurance is the baseline level of assurance where an auditor does a review to state they are not aware of material modifications that should be made.
- Reasonable assurance is a higher level of assurance and is more rigorous and intensive that requires evidence to demonstrate the reporting is free of significant misstatements.
CARB published an update for SB 253 in early July. This update includes the following additional information related to SB 253 disclosure:
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- Data from 2025 or from the entity’s prior fiscal year will be accepted.
- Disclosure will be due in 2026, although the exact due date has not been disclosed.
For more information, check out the recently published FAQ page as well as the most up to date information and resources on CARB’s climate disclosure program website.
WHAT CAN I DO TO PREPARE?
SB 253 represents a significant step toward comprehensive emissions reporting, with far-reaching implications for corporate accountability in addressing climate change. Thousands of companies doing business in California will need to disclose their Scope 1, 2, and 3 greenhouse gas emissions in the coming years. Companies will need to be confident in their reporting and have data management structures in place to assist with emissions reporting and verification.
We recommend that companies:
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- Develop a comprehensive GHG inventory inclusive of your operations and value chain emissions (Scope 1, 2, and 3).
- Establish a data management framework for your data to prepare for verification.
- Monitor upcoming developments with CA SB 253.
HOW DOES THIS STATE LAW ALIGN WITH GLOBAL LEGISLATION?
Covering both private and public companies, California’s legislation stands out as climate-related regulation accelerates globally. Internationally, more than 33 countries are in the process of setting disclosure standards aligned with the International Sustainability Standards Board (ISSB)’s IFRS S1 and S2. Moving forward, we will continue to see a shift from voluntary reporting to regulated requirements from a state and international level, requiring a risk-based, future-ready approach to turn compliance into competitive advantage.
The Stok team is here to help you prepare for disclosures and understand the upcoming regulatory requirements of CA SB 253 wherever you are on your climate journey. Reach out to discuss with our carbon experts.
