California SB 253: A Guide to the Climate Corporate Data Accountability Act

California has passed the most significant corporate emissions disclosure law in the United States, reaching thousands of companies well beyond the state. Senate Bill 253, the Climate Corporate Data Accountability Act, requires large companies that do business in California to publicly report their greenhouse gas emissions every year. The first reports are due in August 2026.

What makes SB 253 worth understanding, even for businesses with no California office, is its reach. The law is built around a global revenue threshold, not California revenue alone, so it captures companies across the US and the subsidiaries of overseas groups. And through the requirement to report value chain emissions, it pulls thousands of suppliers into its orbit, many of them well outside the US.

Here is a plain-English guide to what the law does, who it affects directly and indirectly, the dates that matter, and why credible carbon data is becoming a competitive issue rather than just a compliance one.

What is SB 253, the Climate Corporate Data Accountability Act?

SB 253 was signed into law by Governor Gavin Newsom in October 2023 and later amended by a follow-on bill, SB 219, in 2024. It is administered and enforced by the California Air Resources Board (CARB), the state agency responsible for the rules and the reporting process.

At its core, the law does one thing: it requires in-scope companies to measure and publicly disclose their greenhouse gas emissions across all three scopes defined by the GHG Protocol, the global standard for corporate carbon accounting.

Those three scopes are worth a quick definition, because they shape what companies have to report:

Scope 1 covers direct emissions from sources a company owns or controls, such as fuel burned in company vehicles or on-site boilers.
Scope 2 covers indirect emissions from the energy a company buys, mainly purchased electricity, heating and cooling.
Scope 3 covers everything else across the value chain, from purchased goods and services to business travel, distribution and the use of sold products. For most organisations, Scope 3 makes up the large majority of total emissions, often well over 90%.

SB 253 sits alongside a companion law, SB 261, the Climate-Related Financial Risk Act, which applies to companies with more than $500 million in revenue and requires a report on climate-related financial risks rather than an emissions inventory. The two are often discussed together, but they are separate obligations with different thresholds and different status (more on that below).

SB 253 key dates and timelines

CARB adopted its initial implementing regulation in February 2026, confirming the structure of first-year reporting. The headline dates are as follows:

August 10, 2026: the deadline for the first SB 253 report, covering Scope 1 and Scope 2 emissions. For most companies this report covers data from the financial year ending in 2025. Companies with a financial year ending between 1 January and 1 February 2026 report on the year ending in 2026 instead.
2027: Scope 3 reporting begins, based on the 2026 financial year.The detail is still being set through a second CARB rulemaking, but proposals so far include three options for phasing Scope 3 in and a choice of accounting methods (spend-based, activity-based, supplier-specific or hybrid), with a standardised template mandatory from 2027. Suppliers aren't directly compelled to act, but supplier-specific data is the most accurate route to a credible Scope 3 figure, so much of the practical work could fall on the value chain.
2027 to 2029: limited assurance (an independent, lower-intensity level of third-party check) becomes required for Scope 1 and Scope 2 data.
From 2030: the assurance bar rises to reasonable assurance for Scope 1 and Scope 2. Scope 3 assurance has not been confirmed. CARB will decide separately whether and when it applies.

For the first year, CARB has taken a notably flexible position. Under an enforcement notice issued in December 2024, it will exercise enforcement discretion for good-faith first-year submissions. No third-party assurance is required for the 2026 report. Companies that were already collecting emissions data can report what they have, and companies that were not collecting or planning to collect data when the notice was issued can submit a short statement to that effect rather than a full inventory. CARB has been explicit that this latitude is a first-year measure, and that reporting will become more structured and more demanding from 2027.

Reporting is submitted to a public CARB docket. There is also an annual fee, set on a flat-fee basis to cover the programme's administration costs, with invoices expected to be issued during 2026.

Who does SB 253 directly affect?

SB 253 applies to what the law calls a "reporting entity": a business formed under US law, in any state, the District of Columbia, or under an Act of Congress, with total annual revenues above $1 billion that also does business in California.

Two parts of that definition do a lot of work:

The $1 billion threshold is based on total revenue wherever it is earned, not just revenue generated in California. CARB's regulation ties the figure to "gross receipts" as defined in California's tax code, a broad measure that includes items such as interest, dividends and proceeds from asset sales. To smooth out year-to-year fluctuations, a company looks at the lesser of its two prior financial years, so the threshold has to be met across two consecutive years.
"Doing business in California" is defined using the state's tax rules. A company meets this test if it is organised or commercially domiciled in California, or if its California sales exceed an inflation-adjusted threshold (set at $757,070 for 2025) or 25% of its total sales.

Crucially, the definition does not look at where a company's ultimate parent sits. A US subsidiary of a non-US group that meets the revenue threshold and does business in California is in scope through that subsidiary. This is why the law matters to international groups headquartered in the UK, the EU, Canada and elsewhere, not only to US-based corporations.

The law and CARB's regulation also set out a number of exemptions, including:

The University of California
Certain government and non-profit entities
Insurance companies (an exemption first written for SB 261 and extended to SB 253 by CARB's regulation)
Companies whose only California presence is teleworking employees
Businesses whose only California activity is wholesale electricity transactions

There is also a subsidiary exemption: an in-scope subsidiary does not need to file separately if it is covered by a parent report that meets the requirements, including reports filed by a non-US parent. Estimates suggest the law will reach thousands of companies.

One thing worth being clear on: SB 253 is fully in force, and companies should plan on that basis. However, both SB 253 and its companion law SB 261 are being challenged in the courts by the US Chamber of Commerce and others, who argue on First Amendment grounds that forcing companies to publish this information amounts to compelled speech, meaning the government is making businesses say something against their will. In November 2025 the Ninth Circuit Court of Appeals paused enforcement of SB 261 while the case is heard, but it left SB 253 untouched. The court did not explain why it treated the two laws differently, though one legal analysis has linked it to timing, since SB 261's first deadline of 1 January 2026 was imminent whereas SB 253's first report was not due until August.

Who does SB 253 indirectly affect? The supply chain question

This is where SB 253 reaches far beyond the companies named in the law, and where it becomes relevant to businesses of every size, including SMEs and mid-market firms with no direct obligation of their own.

The mechanism is Scope 3. From 2027, in-scope companies must report emissions across their value chain, and a large share of that sits with their suppliers. A company can build a first Scope 3 figure from spend-based estimates, applying emission factors to what it spends, without ever contacting a supplier. But that is the least accurate method. As stakeholders increasingly expect reliable, accurate data, and reporters move from initial measurement to "how can we actually reduce our emissions and communicate progress?"supplier-specific accounting may become more common. That is what sends data requests flowing downstream, from large corporations to the smaller firms in their supply chains.

A UK design agency, a Canadian component manufacturer or an EU logistics provider may never appear on any list of SB 253 reporting entities. But if they supply a large company that is in scope, they can expect to be asked for their emissions data, and increasingly to be expected to provide it in a form their customer can actually use.

This is the same dynamic already visible under other frameworks, from the EU's CSRD to supplier scorecards such as EcoVadis. SB 253 adds another major buyer base, the large companies doing business in California, to the list of customers who need auditable carbon data from their suppliers.

How Seedling can help

For the companies directly in scope, SB 253 is a reporting obligation. For everyone else, the law tends to arrive as a supplier data request: a large customer needs Scope 3 figures, and they need them from you. Either way, the underlying question is the same. Not whether to measure emissions, but how well, and in a form that holds up when a customer, auditor or regulator looks closely.

Seedling combines carbon accounting software with one-to-one support from a dedicated expert, so you can produce credible, full-scope data without needing a carbon specialist in-house. Here is how that maps to what SB 253 asks of in-scope companies and their suppliers:

A full-scope, GHG Protocol-aligned footprint. We measure Scopes 1, 2 and 3, assured by our team, in the format the law and the GHG Protocol require. That covers the inventory at the heart of any disclosure, and the supplier data large buyers need for their own Scope 3.
Accurate data that reflects real change. We don't rely on spend-based estimates alone. We help you collect activity data, drawn from energy use, mileage, materials and supplier figures. Spend data tracks what you pay, not what you emit, so it struggles to show reductions over time.
Supplier data, collected for you. If you need Scope 3 from your own suppliers, our supplier engagement tool sends a simple data request and pulls the responses straight into your footprint, with no copying between tools or converting revenue-based figures.
Science-based targets and a plan to reach them. Our target-setting tool helps you set an SBTi-aligned Net Zero target and the interim targets behind it, with hotspot analysis informing a credible reduction plan.
One footprint, many frameworks. A single, well-built footprint can serve an SB 253 disclosure, an SBTi target, a CSRD or SECR report, an EcoVadis submission, or a client RFP, without starting from scratch each time. Measure once, report everywhere.

The payoff for smaller suppliers is the part most people overlook. Build the footprint once and report it many times: the same data answers a California customer's Scope 3 request, an EcoVadis questionnaire, and a CDP submission. And because Scope 3 is usually over 90% of a large buyer's total emissions, the supplier who hands over solid, assured figures makes that buyer's job simpler, and tends to be the one kept on when contracts come up for review.

More than 500 businesses already trust Seedling, with over 500,000 tonnes of CO2e measured on the platform. If SB 253 has reached you, we can help you get the data right.

Frequently Asked Questions

What is the difference between SB 253 and SB 261?‍

SB 253 requires disclosure of Scope 1, 2 and 3 greenhouse gas emissions and applies to companies with more than $1 billion in revenue. SB 261 requires a climate-related financial risk report aligned with the TCFD framework or an equivalent such as IFRS S2, and applies to companies with more than $500 million in revenue. They are separate obligations. As of mid-2026, SB 253 is in force, while enforcement of SB 261 is paused pending the outcome of litigation.

Does SB 253 apply to companies outside the United States?‍

The reporting entity must be formed under US law, so a non-US company is not directly in scope. However, a US subsidiary of an overseas group can be captured if it meets the revenue threshold and does business in California. Overseas businesses can also be affected indirectly as suppliers to in-scope companies.

Is the $1 billion threshold based on California revenue?‍

No. It is based on total annual revenue wherever it is earned, measured using California's broad "gross receipts" definition, and assessed across the two prior financial years.

When are the first SB 253 reports due?‍

Scope 1 and Scope 2 reports are due by 10 August 2026, covering financial year 2025 data for most companies. Scope 3 reporting begins in 2027.

Is third-party assurance required for SB 253?‍

Not for the first report in 2026. Limited assurance for Scope 1 and Scope 2 is set to begin from 2027, rising to reasonable assurance from 2030. Assurance for Scope 3 will be decided separately.

What happens if a company does not comply with SB 253?‍

CARB can impose penalties of up to $500,000 per entity per year. There is a safe harbour for Scope 3 disclosures made in good faith, running until 2030, during which penalties for Scope 3 are limited to a failure to file at all.

My business is not in scope with SB 253. Why does this matter to us?‍

Because of Scope 3. In-scope companies may request emissions data from their suppliers to complete their own reports, so businesses of any size that supply large corporates could receive data requests. Having credible carbon data ready is increasingly a factor in winning and retaining work.

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