CA SB253: How CARB’s Proposed Rules May Impact Your Company Reporting

At its July 21, 2026 public workshop, the California Air Resources Board (CARB) shared new proposed requirements on reporting under California’s SB253 which requires companies with over $1 billion in annual revenue doing business in the state to publicly disclose their Scope 1, 2, and 3 greenhouse gas emissions.  The proposed requirements include reporting in 2027 and onward and are aimed at bringing clarity and specificity to how greenhouse gas emissions are calculated and reported.

We reviewed the proposed regulatory language against the GHG Protocol standards and identified where the proposed rules align, provide more flexibility, or extend beyond the standards. While the proposed rules align closely with the standards, there are areas in which variances exist.

Below we highlight some of the notable proposed requirements companies should be aware of.

• Reporting of Scope 3 Categories. CARB proposes reporting for only five of the fifteen Scope 3 categories:
  • Category 1 (Purchased Goods and Services)
  • Category 3 (Fuel and Energy Related Activities)
  • Category 5 (Waste Generated During Operations)
  • Category 6 (Business Travel)
  • Category 7 (Employee Commuting)

A company may exclude any one of these five categories if it is not material, provided the exclusion is explained and its basis disclosed.

The remaining ten categories may be reported on a voluntary basis, though CARB may phase in more required categories over time. This departs from the GHG Protocol, which requires reporting across all Scope 3 categories on the basis of materiality only.

• Reporting deadline. Scope 1, 2, and 3 emissions of the prior fiscal year shall be reported by November 10 each year. This reflects a CARB-specific requirement.
• Recalculation. Changes to corporate structure or accounting that shift base-year emissions by 5 percent or more shall trigger recalculation and restatement of the base year and all affected prior years. CARB defines the base year reporting as the first reporting year. The proposed requirement is more stringent than the GHG Protocol as the standard permits but does not require recalculation for years between the base year and reporting year. Furthermore, the 5 percent threshold is a common industry practice though it is not explicitly stated in the GHG Protocol in recalculation guidance.
• Dislcosure of Supporting Details CARB proposes reporting a number of supporting details that are not typically shared in voluntary GHG reporting. Notable supporting details include disclosure on
  • Methodology including emission factor sources and key attributes
  • Missing data and substitutions
  • Measurement uncertainties
  • Methodology changes
  • Scope 2 emissions breakdown by source types and individual gas
  • Scope 3 emissions methdology and breakdown by primary data

A full breakdown of each proposed requirement, alongside an analysis of its alignment with the GHG Protocol, is available here.

As companies assess their readiness against the proposed requirements, we recommend companies review their current inventory management processes, particularly around methodology documentation, process controls, and assurance.

Have questions on what CARB’s proposed requirements could mean for your company’s GHG inventory? Our team includes climate and audit experts. Please reach out to Sustainability@sodali.com to schedule a call.