California SB 253 puts $1bn companies on November 10 emissions-reporting clock

Thousands of finance, sustainability and accounting teams are approaching a new November 10, 2026 compliance date under California Senate Bill 253 (SB 253), the Climate Corporate Data Accountability Act, as the state begins its first cycle of mandatory corporate greenhouse-gas reporting.

The law covers US companies with total annual revenue above $1 billion that meet California’s applicable “doing business” criteria, subject to exemptions and detailed regulatory definitions. Initial 2026 submissions cover Scope 1 and Scope 2 greenhouse-gas emissions, while the California Air Resources Board has delayed the first-year deadline by three months from its earlier August 10 date.

CARB has also launched a voluntary intake platform through which reporting entities can provide contact information and submit emissions information. Companies may alternatively use the state’s designated email process, and acceptable initial formats can include existing annual reports or emissions disclosures already prepared under other programmes rather than requiring every company to rebuild its dataset using one compulsory template.

The first reporting year is intentionally more flexible than the regime expected from 2027. Limited assurance is not required for the 2026 Scope 1 and Scope 2 submission, while Scope 3 reporting and limited assurance over Scope 1 and Scope 2 are expected to begin during the next reporting cycle.

Which companies fall within California SB 253’s $1 billion threshold?

SB 253 is aimed at large businesses rather than only companies headquartered in California. A US business can fall within the regime when annual revenue exceeds $1 billion and its activities satisfy the state’s definition of doing business in California, subject to exclusions specified by CARB.

The rule applies to public and private companies, making it broader than a securities disclosure requirement targeted only at listed issuers. That means large privately owned businesses can face many of the same emissions-data obligations as public corporations if they meet the revenue and California-business tests.

Certain entities are exempt, including qualifying tax-exempt nonprofits and specified government-related organisations. Insurance companies also have specific treatment under the regulation, while companies whose only California activity falls into certain excluded categories can sit outside the reporting requirement.

The applicability analysis therefore cannot be determined simply by checking whether a company has an office in California. Revenue, legal entity structure and the precise nature of California business activity can all affect whether reporting is required.

What exactly must companies submit by November 10, 2026?

The first-year requirement focuses on Scope 1 and Scope 2 greenhouse-gas emissions. Scope 1 generally covers direct emissions from sources a company owns or controls, while Scope 2 captures indirect emissions associated with purchased energy such as electricity.

The fiscal year used for the submission depends on when a company’s financial year ends. Companies with fiscal years ending between February 2 and December 31, 2026 generally use the fiscal year ending in calendar 2025, while organisations whose fiscal year ends between January 1 and February 1, 2026 use data from the fiscal year ending in 2026.

CARB is allowing several submission formats during this initial cycle. A company can provide an existing annual report containing its Scope 1 and Scope 2 data, use information already reported through another programme or use the state’s draft reporting template.

Additional methodological information can also be supplied, including organisational boundaries, emission factors, data sources and assumptions. That context may become increasingly important as assurance begins because reviewers need to understand not only the final emissions figure but how the organisation produced it.

How much flexibility is CARB giving companies during the first reporting year?

CARB has said it will exercise enforcement discretion for companies acting in good faith during the initial cycle, recognising that not every organisation began building emissions-reporting systems at the same point.

Businesses that were not collecting or planning to collect Scope 1 and Scope 2 data when CARB issued its enforcement notice on December 5, 2024 receive additional accommodation. They are not required to manufacture a full historic emissions dataset for the 2026 submission, although CARB asks qualifying entities relying on that discretion to file a statement of non-reporting by November 10.

That flexibility should not be interpreted as cancellation of SB 253. The reporting infrastructure is being established, annual fees begin in 2026 and CARB is already developing the regulatory requirements governing the more demanding 2027 cycle.

Companies submitting incomplete data in good faith are also in a different position from entities simply ignoring the regime. CARB’s enforcement language places considerable importance on whether organisations are making genuine efforts to comply.

Why does SB 253 become a bigger accounting problem in 2027?

The 2026 exercise can often rely on sustainability information companies already collect, while 2027 begins moving emissions data closer to the control environment associated with financial reporting. Limited assurance over Scope 1 and Scope 2 information is expected to begin next year, requiring independent practitioners to evaluate whether reported emissions meet the relevant criteria.

Scope 3 is also expected to enter the reporting cycle. Those emissions can include suppliers, purchased goods, transport, business travel, product use and other activities occurring outside the company’s direct operational boundary, making data collection substantially more complicated than measuring fuel burned at an owned facility.

The challenge is particularly significant for businesses with thousands of suppliers. Finance teams may need to connect sustainability systems with procurement, ERP, utility, travel and supplier information while establishing documentation strong enough for an assurance provider to test.

This changes the nature of the project from sustainability storytelling to data governance. Accountants, internal auditors, information-technology teams and operational functions increasingly need to agree on ownership, controls and evidence behind numbers that historically may never have passed through the financial reporting process.

Does the legal challenge to California’s other climate rule stop SB 253 reporting?

No current injunction identified in the latest compliance guidance extends the separate SB 261 stay to SB 253. SB 261 concerns climate-related financial-risk reporting and has faced separate litigation, while the November 10 SB 253 emissions-reporting process continues.

The distinction matters because companies could otherwise assume that litigation affecting one California climate-disclosure law automatically pauses the other. Current guidance treats SB 253 as an active reporting obligation with its own timetable.

Legal challenges and rulemaking could still alter future implementation, and companies will continue monitoring judicial and regulatory developments. As of the current September 2026 position, however, CARB is operating the reporting intake process and preparing companies for the November deadline.

Annual fees are also beginning during this cycle. CARB is expected to notify companies of their fee amount by December 10, with payment due within 60 calendar days of notification.

What should finance teams take from the first SB 253 filing cycle?

The most important lesson is that 2026 is effectively the bridge between voluntary greenhouse-gas disclosure and a more assurance-driven reporting system. Companies can use existing Scope 1 and Scope 2 information this year, but 2027 is expected to demand much stronger processes.

Data lineage will become increasingly important. Organisations need to know where emissions information originated, how calculations were performed, which assumptions were used and who approved changes before an assurance provider can evaluate the resulting disclosure efficiently.

Scope 3 raises the stakes further because a large portion of a company’s climate footprint can sit outside its direct systems. Supplier engagement, estimation methodologies and data controls can therefore become recurring accounting and procurement workloads rather than a once-a-year sustainability exercise.

The November 10 deadline is the immediate search question, but the deeper business consequence arrives afterward. California is turning greenhouse-gas information into a recurring corporate-reporting dataset, and the companies that treat the first filing as an isolated compliance form may face a much harder transition when assurance and Scope 3 arrive in 2027.