California Climate Corporate Data Accountability Act (SB 253)

California Climate Corporate Data Accountability Act (SB 253)

Signed into law in October 2023, SB 253 requires companies that do business in California and exceed a total annual revenue of $1 billion to annually report their greenhouse gas emissions, in line with GHG Protocol standards and guidance. Under the policy, impacted companies need to report their full carbon inventories, including Scope 3 emissions.

What will it require?

Companies will need to report on their 2025 direct (Scope 1 and Scope 2) emissions in 2026 and their 2026 Scope 3 emissions by 2027. They will need to hire external, independent auditors to verify their disclosures, or they will be considered incomplete. They will also need to submit reports on a forthcoming digital platform, making this information publicly available. If companies misreport their scope emissions, unknowingly or not, they can be penalized with a fine of up to $500,000. However, Scope 3 emissions can be provided under a safe harbor due to the difficulty in calculating the entirety of value-chain emissions.

Other bills coming out of California

In addition to SB 253, the California Assembly and Senate passed SB 261 – the Climate-Related Financial Risk Act. This bill requires companies with revenues above $500 million to report on their climate risks.