SB 253 scope 3 reporting from 2027

What does the law require for scope 3?

SB 253 requires reporting entities, US companies with more than 1 billion dollars of revenue doing business in California, to report scope 3 emissions from 2027, measured under the GHG Protocol. SB 219, passed in 2024, left the exact schedule to CARB. The law also provides that misstatements in scope 3 disclosures made with a reasonable basis and disclosed in good faith are not subject to penalties, that between 2027 and 2030 scope 3 penalties apply only for not filing, and that scope 3 assurance begins at the limited level in 2030. The first two points are often called the scope 3 safe harbour; see SB 253 penalties and fees. See also California SB 253 and who must report under SB 253.

What will SB 253 scope 3 reporting require?

• Deadline: 10 November each year, for scope 1, 2 and 3, covering the preceding fiscal year.
• Mandatory categories: category 1, purchased goods and services; 3, fuel- and energy-related activities; 5, waste generated in operations; 6, business travel; and 7, employee commuting. CARB has not said when the others will become mandatory.
• Methods: GHG Protocol methods, including industry-average and spend-based data for upstream emissions, with missing data and substitute methods documented and the percentage of scope 3 based on primary supplier data disclosed.
• Boundaries: the consolidation approach must be disclosed, and scope 2 reported on both the location-based and market-based methods under the 2015 guidance.

These are proposals: CARB expects to publish a draft regulation later in 2026, followed by a 45-day comment period and a Board decision. See the 15 scope 3 categories.

SB 253 scope 3: a food distributor's 2027 report

A US food distributor with 3 billion dollars of revenue prepares its first scope 3 inventory for its 2026 fiscal year, in tonnes of CO2 equivalent.

The mandatory categories total 949,000 tonnes, 91% of the distributor's scope 3, because category 1, the food it buys, dominates. Its upstream transport is significant but voluntary; it decides to report it anyway, because its customers ask for it and the data is already collected. Category 1 is estimated mostly with spend-based factors, with supplier data for its two largest meat and dairy suppliers, and it discloses the share based on primary data. Its scope 1 and 2 figures need limited assurance in 2027; its scope 3 figures do not until 2030. See the spend-based method. See purchased goods and services and supplier-specific data.

What assurance applies?

CARB proposes limited assurance of scope 1 and 2 from reports submitted in 2027, rising to reasonable assurance in 2030 as the law provides, under standards including ISSA 5000, ISAE 3000 and 3410, the AICPA attestation standards, ISO 14064-3 and AA1000AS; see GHG verification and ISO 14064-3. Scope 3 assurance starts at limited level in 2030. Because the 2027 assurance covers the whole submission, voluntary scope 3 figures in the same report should be well supported too. See limited and reasonable assurance. See ISAE 3000 and ISAE 3410 and ISSA 5000.

How does SB 253 compare with IFRS S2 and the ESRS on scope 3?

IFRS S2 and ESRS E1 expect all relevant or significant categories, with first-year reliefs, while CARB's proposal starts with five. A company reporting under several regimes should build one inventory covering every relevant category and report the CARB categories from it, rather than measuring the five in isolation. See IFRS S2 and ESRS E1.

What should companies do now?

Screen all 15 categories, then build reliable methods for the five proposed mandatory ones, starting with category 1, where spend data, supplier engagement and the choice of emission factors matter most. Document methods and data gaps, because CARB proposes to require that, and track the draft regulation expected later in 2026. See choosing emission factors and the scope 2 revision.

This guide is general information. It is not tax or legal advice for your situation.