Overview
Introduced: January 2023
Effective from: October 7, 2023
First report due: 2026
Region(s): California, United States
See the latest updates to California’s climate laws in our blog.
About
The California Climate Accountability Package includes two critical pieces of legislation—SB 253 (Climate Corporate Data Accountability Act) and SB 261 (Climate-Related Financial Risk Act). These laws impose significant reporting requirements on large public and private companies operating in California. SB 253 mandates the disclosure of comprehensive greenhouse gas (GHG) emissions data across Scopes 1, 2, and 3. Meanwhile, SB 261 requires companies to disclose climate-related financial risks and the strategies they have adopted to mitigate these risks. Collectively, these laws aim to enhance corporate transparency, ensure alignment with California’s ambitious climate goals, and provide investors and the public with reliable information on climate impacts and risks.
Criteria for compliance
SB-253 applies to:
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U.S.-based partnerships, corporations, LLCs, or other business entities
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With total annual revenues over $1 billion
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That do business in California, regardless of incorporation state or headquarters location
This includes both public and private companies with a physical or economic footprint in California.
Emissions reporting
- Starting in 2026: Scope 1 and Scope 2 emissions.
- Starting in 2027: Scope 3 emissions.
Verification
Emissions data must be verified by an independent third-party assurance provider.
Compliance timelines
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Fiscal Year Beginning 2025 (Reports due in 2026): Entities must disclose Scope 1 (direct) and Scope 2 (indirect) GHG emissions.
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Fiscal Year Beginning 2026 (Reports due in 2027): Entities must begin disclosing Scope 3 emissions (value chain emissions).
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By 2029: The California Air Resources
Disclosure requirements
SB-253 mandates annual public disclosure of the following:
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Scope 1: Direct GHG emissions from owned or controlled sources
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Scope 2: Indirect emissions from purchased electricity, steam, heating, or cooling
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Scope 3: Indirect emissions from upstream and downstream activities, including:
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Purchased goods and services
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Capital goods
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Waste
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Business travel
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Employee commuting
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Use of sold products
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Investments
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Disclosures must be made publicly available online in a format prescribed by CARB.
Third-party auditing
All emissions data must be verified by an independent third-party assurance provider. CARB will maintain a registry of qualified verifiers and may provide audit methodology guidelines to ensure consistency and reliability across reporting entities.
Assurance requirements
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Starting in 2026: Limited assurance required for Scope 1 and 2 emissions.
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By 2030: Reasonable assurance required for Scope 1 and 2 emissions.
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By 2027: CARB will evaluate whether assurance will be required for Scope 3 disclosures and set standards accordingly.
Penalties for non-compliance
Noncompliance may result in civil penalties of up to $500,000 per reporting year, including:
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Failure to file
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Late submissions
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Incomplete or inaccurate data
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Misleading disclosures
For Scope 3 disclosures between 2027–2030, CARB will prioritize enforcement for failure to file, while providing flexibility for companies still building capabilities.
