SB253; SB 253; SB261; SB 261

March 3, 2025

The California Air Resources Board (CARB) is to develop regulations for Senate Bill 253 (SB 253), the Climate Corporate Data Accountability Act in 2025. The new law requires public and private businesses doing business in California with total annual revenues over $1 billion to disclose their Scope 1 and 2 greenhouse gas (GHG) emissions starting in 2026. Disclosure of their Scope 3 emissions is starting in 2027.

SB 253 Timelines and Potential Penalties

• Climate data collection begins in 2025 to report GHG emissions calculations to a digital reporting platform in 2026.
• All emissions disclosures will be publicly available.
• The data and calculations must have third-party assurance. The same party that accounts for the data cannot also verify it.
• Disclosures must be easily understandable to residents, investors, and other stakeholders.
• Companies that fail to comply could be subject to civil penalties from the state’s attorney general unless entities demonstrate “good faith” efforts to comply with the law.

Scope Definitions

Scope 1 emissions result directly from a company’s activities from sources that the company owns or controls, such as vehicles, boilers, and equipment. An independent third party must guarantee these disclosures.

Scope 2 emissions result indirectly, such as those associated with purchasing electricity, steam, heat, or cooling used by the company. An independent third party must guarantee these disclosures.

Scope 3 includes all indirect emissions from a company’s entire supply chain. Scope 3 reporting is due in 2027 based on 2026 data. Scope 3 emissions may require assurance as well.

As well as GHG emissions disclosures, SB 261, the Climate Related Financial Risk Act,  requires public and private companies (annual revenues over $500M) doing business in California to prepare and publish climate-related financial risk assessments biennially. These climate risk assessments are to be consistent with recommendations from the Task Force on Climate-Related Financial Disclosure (TCFD) framework, or their successor, the International Financial Reporting Standards. Companies are to publish the reports on their company’s website.

 Doing Business in California Definition

The state Franchise Tax Board considers a company to be “doing business” if it meets any of the following criteria:

• Engage in any transaction for financial gain within California
• Are organized or commercially domiciled in California
• California sales, property, or payroll exceed the following amounts shown for the Year 2024:

Educational Resources

There are multiple resources available to help. You’ll find law firms, environmental consultants, and GHG verification service firms among them. The most efficient data collection and reporting is from combining all three because each brings value to your plan and may help provide operational efficiencies as part of the process.

We recommend an association webinar, such as the A&WMA session in March on SB 253 and more, to help you understand the next level and get started. Navigating U.S. and California Climate Emissions And Risk Disclosure Requirements, an A&WMA Webinar

Free Resources Include:

• California’s SB 253 and SB 261
• Climate Change and Sustainability
• GHG Monitoring, Control, and Accounting
• Watch for an upcoming live webinar from SCS Engineers in April! It’s free and open to all.