SB 253 Explained: California's Climate Disclosure Law for Scope 1, 2 and 3 Emissions (2026)
SB 253 requires US public and private companies with more than $1 billion in annual revenue that do business in California to report Scope 1 and 2 emissions each year, then Scope 3 from 2027, using the GHG Protocol. The first Scope 1 and 2 reports are due by 10 November 2026.
Last updated 2 November 2026 · By Ella Sustainability Team
Get startedWhat is SB 253?
Who has to report under SB 253?
SB 253 deadlines and requirements at a glance
| Requirement | What it means | When |
|---|---|---|
| Scope 1 and 2 report | Direct emissions and purchased energy emissions for the prior fiscal year | First report due 10 November 2026, then annually |
| Scope 3 report | Value chain emissions, with no materiality threshold in the statute | From 2027; timing set by CARB's second rulemaking |
| Methodology | GHG Protocol standards and guidance | Every report |
| Limited assurance, Scope 1 and 2 | Independent third-party assurance | Required from 2026 under the statute; CARB accepts 2026 reports without it |
| Reasonable assurance, Scope 1 and 2 | Higher level of assurance | From 2030 |
| Scope 3 assurance | Limited assurance | From 2030 |
| Annual fee | Separate SB 253 and SB 261 fees | Notices by 10 December each year, payable within 60 days |
| Maximum penalty | Administrative penalty for non-compliance | Up to $500,000 per reporting year |
What CARB expects for the first report in 2026
Scope 3 under SB 253
How to get ready for SB 253
Our view: SB 253 is a data collection problem
How Ella helps
Carbon accounting software
Scope 1, 2 and 3 with a source on every number, ready for assurance and SB 253.
ESG reporting software
Climate risk, CDP and framework reports built from one collected, audit-ready data set.
ESG questionnaire automation
Answer customer ESG questionnaires and RFPs from the same data you report to CARB.
Related resources
Scope 1 and 2 emissions explained: definitions, examples and how to calculate them
Scope 1 emissions come from sources your company owns or controls, such as gas boilers, company vehicles and refrigerant leaks. Scope 2 emissions come from the electricity, heat, steam or cooling you buy. You calculate both by multiplying activity data, like kWh or litres, by an emission factor, then report Scope 2 two ways: location-based and market-based.
Scope 3 Categories Explained: All 15 GHG Protocol Categories, With Examples
Scope 3 has 15 categories under the GHG Protocol: eight upstream, from purchased goods and services to upstream leased assets, and seven downstream, from downstream transport to investments. You report the categories relevant to your business, and a services firm and a manufacturer will find their emissions in very different places.
Best carbon accounting software in 2026: an honest comparison
The best carbon accounting software in 2026 is the one that gets real activity data out of your organisation with the least chasing, then turns it into Scope 1, 2 and 3 figures you can defend to an auditor. For large UK and EU teams, compare Ella, Greenly, Persefoni, Sweep, Watershed, Plan A and Normative on data collection first.
Ella vs Salesforce Net Zero Cloud: Comparison and Alternatives (2026)
Salesforce Net Zero Cloud is sustainability software built on the Salesforce platform, for enterprises already running Salesforce. Ella is AI-native ESG software built as an agent: it collects data from colleagues, chases replies and produces SECR, CDP, CSRD, VSME and EcoVadis outputs, with no CRM to configure and a trial on your own data.
Frequently Asked Questions
What is SB 253?
SB 253, the Climate Corporate Data Accountability Act, is a California law requiring US companies with more than $1 billion in annual revenue that do business in California to report Scope 1 and 2 emissions annually, and Scope 3 emissions from 2027, using the GHG Protocol.
When is the first SB 253 report due?
CARB's Initial Regulation, effective 12 October 2026, sets 10 November 2026 as the deadline for the first Scope 1 and 2 reports covering the prior fiscal year. Scope 3 reporting begins in 2027.
Does SB 253 apply to private companies?
Yes. SB 253 applies to public and private US business entities that meet the $1 billion revenue threshold and do business in California.
What is the SB 253 penalty?
Administrative penalties are capped at $500,000 per reporting year. For Scope 3, between 2027 and 2030 penalties apply only for failing to file, and good-faith misstatements with a reasonable basis are not penalised.
Does SB 253 require assurance?
Yes. The statute requires limited assurance on Scope 1 and 2 from 2026 and reasonable assurance from 2030, with limited assurance on Scope 3 from 2030. CARB will accept 2026 reports without assurance.
How is the $1 billion revenue threshold measured?
Total revenue, not just California sales. Under CARB's final rule, revenue is tested on the lesser of the two prior fiscal years, excluding intercompany transactions within a combined reporting group.
What if we were not collecting emissions data before December 2024?
For the 2026 cycle only, CARB does not expect Scope 1 and 2 data from companies that were not collecting it. It asks them to submit a statement of non-reporting on company letterhead by 10 November 2026.
What software helps with SB 253 reporting?
Carbon accounting software such as Ella collects Scope 1, 2 and 3 data from the people who hold it, tags it by entity, calculates emissions with the GHG Protocol and keeps an audit trail for assurance.