Published October 6, 2026
By NZero
Companies covered by California’s Climate Corporate Data Accountability Act, known as SB 253, must submit their first Scope 1 and Scope 2 emissions reports to the California Air Resources Board (CARB) by November 10, 2026. The law applies to U.S.-based businesses with more than $1 billion in total annual revenue that do business in California, and it makes emissions disclosure an annual obligation covering the prior fiscal year. Scope 1 and Scope 2 reporting begins in 2026, and Scope 3 follows from 2027. For finance, sustainability, and facilities teams, the most useful questions are practical ones: what has to be reported, how CARB is approaching the early reporting cycles, and whether the underlying energy and fuel data is complete enough to support the numbers.
The law covers three categories of emissions. Scope 1 covers direct emissions from sources a company owns or controls, such as natural gas boilers, backup generators, and fleet vehicles. Scope 2 covers indirect emissions from purchased electricity, steam, heating, and cooling. Scope 3 covers emissions across the value chain, from suppliers to product use.
The requirements phase in over several years under the statute:
Reports can be consolidated at the parent company level, and CARB funds the program through annual fees on covered entities. Each company is responsible for determining whether it meets the statutory definition of a reporting entity, including how its revenue is measured and whether it does business in California.
CARB built transitional relief into the first cycle. Its December 2024 enforcement notice and its 2026 reporting guidance said the agency would exercise enforcement discretion, and that companies could report Scope 1 and Scope 2 emissions based on data they were already collecting, or planning to collect, when the notice was issued. Companies that were doing neither were not expected to submit emissions data in the first year, but could file a statement of non-reporting instead.
The guidance also accepted several submission formats:
Limited assurance was not required for first-year submissions, even though the statute calls for it, and CARB allowed flexibility in Scope 2 emission factors. Reports could be filed through a voluntary online intake platform or by email, and reports submitted through the platform are made public. CARB also encouraged companies to describe their methodologies, data sources, emission factors, organizational boundaries, and assumptions.
This relief applies only to the first cycle. CARB’s guidance states that it covers 2026 reporting alone, and requirements for 2027 and later years, including methodologies, deadlines, assurance, and formats, are being set through a separate rulemaking.
For most companies with offices, warehouses, factories, or data centers, the bulk of Scope 1 and Scope 2 emissions traces back to two sources: utility bills and fuel purchase records. Electricity consumption drives Scope 2, while natural gas, fuel oil, propane, and diesel drive most stationary Scope 1 emissions. The calculation itself is relatively simple once consumption is known. The harder part is assembling a complete and consistent record of that consumption across every site.
Before filing, it is worth checking for common gaps:
Each of these issues can lead to under- or over-reporting, and they are easier to resolve now than after a report is public. Documentation matters as well. With assurance requirements tightening over time, keeping a clear trail from source bills to final emissions totals will make later reviews far simpler.
Whatever flexibility CARB allows on format and emission factors, the quality of the underlying activity data is where most of the effort should go. A report built on complete, traceable utility data is easier to defend, easier to update, and easier to bring into line with stricter requirements in future cycles.
Each reporting cycle is likely to ask more of companies than the last. Scope 3 adds value chain emissions from 2027, and the statute’s assurance requirements mean Scope 1 and Scope 2 figures will increasingly be reviewed by independent third parties, reaching reasonable assurance in 2030. CARB’s second rulemaking will set the detailed rules for those later years, so covered companies should follow CARB’s climate disclosure page for updates.
Some steps apply every year: confirming coverage against CARB’s definitions, choosing a submission path, and building a repeatable process for collecting utility and fuel data with documentation that links each total back to source records. Platforms such as NZero, which automate utility data collection and calculate Scope 1 and Scope 2 emissions from it, can reduce the manual work involved in each annual filing.
