One critical update before everything else: the brief for this post referenced August 10, 2026 as the filing deadline. That date was accurate when CARB adopted its initial regulations on February 26, 2026. However, on June 24, 2026, CARB announced it is updating the initial regulation and deferring the first SB 253 Scope 1 and 2 reporting deadline from August 10 to November 10, 2026, a three-month extension. KPMG, Watershed, and the Deloitte Sustainability Spotlight all confirmed this on or around June 24, 2026. If you are preparing your compliance calendar, the operative deadline is November 10, 2026.
Everything else in this guide remains current. The substantive requirements, what to report, who must report, and what good faith compliance means are unchanged. November 10 gives companies three additional months to prepare, but that preparation needs to start now for companies that have not already begun data collection.
This is the first mandatory GHG emissions report California has required from large companies doing business in the state. Approximately 4,200 entities are estimated to be in scope. The report covers both public and private companies. It covers US-headquartered and non-US-headquartered companies alike. And it covers not just companies based in California but any company that meets the revenue and "doing business in California" tests, regardless of where they are incorporated or headquartered.
What Is California SB 253 and Who Must File by November 10?
SB 253, the Climate Corporate Data Accountability Act, was signed into law in October 2023 and subsequently amended by SB 219 in October 2024. It requires covered companies to publicly disclose their Scope 1 and Scope 2 greenhouse gas emissions annually, beginning in 2026, and to add Scope 3 emissions beginning in 2027.
CARB, the California Air Resources Board, is the implementing agency. CARB adopted its initial regulations on February 26, 2026, establishing the August 10, 2026 deadline that has now been deferred to November 10, 2026.
The law applies to any US-based business entity that:
Meets the definition of "doing business in California" under California Revenue and Tax Code Section 23101, and
Has total annual global revenue in excess of $1 billion.
Both conditions must be met. Revenue above $1 billion alone does not trigger the obligation. Doing business in California alone does not trigger it. Both thresholds must be satisfied.
The law covers all business entity types: corporations, partnerships, limited liability companies, and other entities. It covers both public and private companies. It covers US-headquartered and foreign-headquartered companies doing business in California. There is no exemption for companies that are not incorporated in California or that do not maintain a physical presence in the state.
Approximately 4,200 entities are estimated to be in scope of SB 253 and/or SB 261 combined, according to the Persefoni SB 253 compliance guide, which cited CARB's preliminary entity list.
What Does "Doing Business in California" Mean: Are You Actually In Scope?
The "doing business in California" threshold is defined by reference to California Revenue and Tax Code Section 23101(b)(1) and (2). Under this definition, a taxpayer is considered to be doing business in California if it:
Is organised or commercially domiciled in California, or
Its California sales exceed the lesser of $500,000 or 25% of total sales. Sales include those made by agents or independent contractors and are determined using California's apportionment rules under Revenue and Tax Code Sections 25135 and 25136.
The Nelson Mullins compliance guide confirms this definition directly from the CARB initial regulation.
The practical implication: the $500,000 California sales threshold is the most common trigger for companies not based in California. A company with $10 billion in annual global revenue that has even modest product or service sales into California is almost certainly doing business in California under this definition. The threshold is not based on physical presence, employees, or offices. It is based on sales into the state.
Companies should not rely on CARB's preliminary entity list, published in September 2025 using California Secretary of State data through March 2022, as a definitive determination of in-scope status. The Persefoni guide specifically notes that CARB acknowledged the preliminary list may be missing companies. Each company must conduct its own analysis of whether it meets both the revenue and "doing business" tests.
CARB uses California Secretary of State entity registration data as a starting point, but the "doing business" test under Revenue and Tax Code Section 23101 does not require California entity registration. A company that sells into California through a national e-commerce channel, a national distribution network, or through agents or independent contractors meets the definition without having a registered California entity.
What Is the $1 Billion Revenue Threshold and How Is It Measured?
The $1 billion revenue threshold under SB 253 is total annual global revenue, not California-only revenue. A company with $2 billion in global revenue and only $10 million in California revenue meets the threshold. A company with $900 million in global revenue and $500 million in California revenue does not.
Revenue is measured at the parent company level for consolidated groups. If a parent company exceeds $1 billion in total consolidated revenue and does business in California, the parent is the reporting entity. Subsidiaries that are themselves in scope are not required to prepare separate reports if their parent files a consolidated report that includes their emissions. Sullivan and Cromwell's analysis of the initial regulations confirms this: both SB 253 and SB 261 permit reports to be consolidated at the parent level, providing that if a subsidiary of a parent company is in scope, the subsidiary is not required to prepare a separate report.
The revenue threshold applies to the most recently completed fiscal year. For the 2026 reporting cycle, the relevant fiscal year is generally the fiscal year ending in 2025 (for companies with fiscal year-ends between February 2, 2025 and December 31, 2025) or the fiscal year ending in early 2026 (for companies with fiscal year-ends between January 1 and February 1, 2026).
The $1 billion threshold is stated in US dollars. For non-US-headquartered companies, revenue is converted using the applicable exchange rate. The Sullivan and Cromwell analysis confirmed that the regulations apply to US entities specifically, but the Persefoni guide notes that the regulations apply to US-based entities, which is the term used in SB 253. Non-US-headquartered companies with US subsidiaries doing business in California should assess whether the US subsidiary's revenue, or the consolidated group's revenue, triggers the threshold.
What Must You Actually Submit: Scope 1 and Scope 2 Only, Not Scope 3 Yet
The 2026 reporting requirement is limited to Scope 1 and Scope 2 GHG emissions. Scope 3 reporting is not required until 2027.
Scope 1 emissions are direct greenhouse gas emissions from sources owned or controlled by the company. These include emissions from combustion in owned or controlled boilers, furnaces, and vehicles, and process emissions from owned or controlled manufacturing or chemical processes.
Scope 2 emissions are indirect greenhouse gas emissions from the generation of purchased electricity, steam, heat, or cooling consumed by the company. These are emissions that occur at the power plant or heat source but are attributed to the company because the company purchased the energy.
Both Scope 1 and Scope 2 must be reported in accordance with the GHG Protocol Corporate Accounting and Reporting Standard (the GHG Protocol Corporate Standard), developed by the World Resources Institute and the World Business Council for Sustainable Development. The PwC In Depth on SB 253 confirmed that CARB's regulation requires reporting in conformance with GHG Protocol standards.
The greenhouse gases that must be reported are the seven gases recognised under the GHG Protocol and the Kyoto Protocol: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulfur hexafluoride (SF6), and nitrogen trifluoride (NF3). Emissions of each gas are converted to CO2-equivalent (CO2e) using global warming potential (GWP) values.
No independent third-party assurance is required for the 2026 first-year report. The BDO guide confirms that limited assurance is not required for 2026 reporting, which is part of CARB's first-year enforcement discretion approach. Assurance requirements begin in 2027 for Scope 1 and 2 data, with limited assurance required through 2029 and reasonable assurance from 2030.
What Data Does a Scope 1 and Scope 2 Report Actually Require?
The CARB voluntary reporting template released in October 2025 provides the clearest indication of what data fields CARB expects, even though the template is not mandatory for 2026.
The template includes the following data categories based on the Terrascope SB 253 compliance roadmap and KPMG analysis:
Company identification: legal name, NAICS code (two-digit industry classification), and fiscal year covered.
Scope 1 emissions: total Scope 1 emissions in metric tons of CO2 equivalent, disaggregated by facility and by emission source type (stationary combustion, mobile combustion, process emissions, fugitive emissions) where applicable.
Scope 2 emissions: total Scope 2 emissions in metric tons of CO2 equivalent, reported under both the location-based method (using average grid emission factors) and the market-based method (using contractual emission rates from instruments such as renewable energy certificates or power purchase agreements). Both methods are required under the GHG Protocol for Scope 2 reporting.
Emissions intensity metrics: emissions per unit of revenue (metric tons CO2e per $1 million in revenue) and, optionally, other intensity metrics appropriate for the company's industry.
Methodology disclosure: the GWP values used (typically from the IPCC's Fifth Assessment Report or Sixth Assessment Report), emission factor sources (EPA eGRID, EPA Emission Factors Hub, IPCC Emission Factor Database), and organisational boundary approach (operational control or equity share).
Assurance status: for 2026, no assurance is required, but the template likely includes a field for noting assurance status to establish the framework for future years.
The practical data assembly challenge for most companies is the facility-level Scope 1 data. National and multinational companies with dozens or hundreds of facilities may have Scope 1 emission data in multiple ERP systems, utility billing platforms, and operational reporting systems that have never been aggregated for GHG reporting purposes. The Scope 2 data assembly is comparably complex for companies with many utility accounts across multiple states and countries.
What Is the CARB Voluntary Reporting Template and Should You Use It?
CARB released a draft Scope 1 and 2 GHG reporting template in October 2025 for public comment, with a comment deadline of October 27, 2025. The use of the template is voluntary for the 2026 reporting cycle.
The CARB voluntary template is designed for companies that are disclosing GHG emissions publicly for the first time, or that do not already have an existing GHG report that covers the required scope and methodology. It provides standardised data fields including emissions intensity metrics, two-digit NAICS codes for industry classification, transparent methodology disclosure through GWP values and emission factors, and materiality thresholds that allow organisations to exclude immaterial sources with documentation.
Companies that already report Scope 1 and 2 emissions through existing frameworks, such as CDP (formerly the Carbon Disclosure Project), the GHG Protocol, or through SEC climate disclosures, can submit those existing reports to CARB in satisfaction of the SB 253 requirement. CARB's FAQs explicitly confirm the following are acceptable for 2026 compliance:
An entity's annual report that includes information on Scope 1 and Scope 2 emissions.
Information already submitted through a voluntary programme or another regulatory programme (such as the EPA's Greenhouse Gas Reporting Program or the EU ETS).
Scope 1 and Scope 2 data compiled using CARB's voluntary reporting template.
Where a company has existing GHG disclosures that cover Scope 1 and 2 under the GHG Protocol, submitting those to CARB is likely the most efficient path to first-year compliance.
The Terrascope guide notes that the voluntary template introduces standardised intensity metrics and industry classification in a way that signals CARB's intent to enable cross-company benchmarking. Companies that use the template are providing data in a format that CARB can directly compare across companies in the same NAICS category, which has implications for future regulatory scrutiny and investor comparability.
Where Do You Submit the Report and Is the CARB Portal Open Yet?
CARB has stated it will open a public docket for SB 253 report submissions prior to the reporting deadline. As of July 15, 2026, the status of the CARB submission portal is evolving.
CARB's announcement on June 24, 2026 that it is deferring the deadline to November 10 was tied to CARB's withdrawal of its initial regulation from the Office of Administrative Law (which it submitted on May 20, 2026) and its plan to issue a 15-day public comment notice on the updated initial regulation. That updated regulation must be finalised before the submission infrastructure is fully established.
The BDO guide from April 2026 confirms that reports should be uploaded to a public docket that CARB will launch prior to the initial SB 253 reporting deadline. The statement for entities that were not collecting data (see the next section) should also be uploaded to that same public docket.
Companies that are preparing their reports now should monitor the CARB website at ww2.arb.ca.gov for announcements about the submission portal opening. The portal is expected to be publicly accessible and to function as a public filing system, meaning all submitted reports will be viewable by the public, regulators, investors, and media.
The public nature of the filing is a significant difference from SEC filings, which are also public, but where the audience is primarily investors and analysts. The CARB docket will be accessible to environmental groups, journalists, and others who may use the GHG data in ways that extend beyond investor relations.
What Does "Good Faith Effort" Enforcement Mean in 2026: What Is the Minimum That Qualifies?
CARB's enforcement approach for the 2026 first reporting cycle is the most practically significant element of the programme for CFOs who are uncertain whether their company has sufficient data to file a complete report.
CARB issued an Enforcement Notice on December 5, 2024, establishing the first-year enforcement posture. The BDO guide and PwC guide both confirm the key elements:
For companies that were collecting GHG emissions data at the time the Enforcement Notice was issued in December 2024 and that already have Scope 1 and 2 data, good faith compliance requires submitting that data to CARB by November 10, 2026. The fact that the data may be incomplete, unverified, or prepared using a different methodology than the full GHG Protocol standard does not exempt such companies from filing. The standard is to give what you have on hand.
For companies that were not collecting GHG emissions data and were not planning to collect data at the time the Enforcement Notice was issued, the good faith compliance path is to submit a statement on company letterhead to the CARB public docket by November 10, 2026. The statement must confirm that the company did not submit a GHG emissions report under SB 253 and that, in accordance with the Enforcement Notice, the company was not collecting data or planning to collect data at the time the notice was issued.
The key question for each company is: as of December 5, 2024, was the company collecting or planning to collect Scope 1 and Scope 2 GHG emissions data? The PwC guide is explicit: if an entity had previously published Scope 1 and Scope 2 emissions (for example, in a CDP submission, a sustainability report, or an SEC climate disclosure), it likely cannot assert that it was not collecting data or planning to collect data at the time the Enforcement Notice was issued.
The Sullivan and Cromwell analysis confirms that CARB stated at the February 26 hearing that it expects all in-scope companies to report by the deadline, but may provide relief on a "one-on-one basis" upon request for companies facing genuine compliance challenges.
What Are the Penalties for Missing the November 10 Deadline?
SB 253 authorises CARB to impose penalties for failure to comply with reporting requirements. The penalty structure includes:
Civil penalties of up to $50,000 per day per violation for knowingly or wilfully violating the law.
The law provides for a maximum penalty of $500,000 per reporting year per entity.
For the 2026 first year, CARB's enforcement discretion posture means that companies making a good faith effort to comply, including companies that submit a statement explaining non-collection if they genuinely were not collecting data as of December 2024, are unlikely to face the maximum penalty. However, good faith discretion is not immunity. A company that is clearly in scope, had existing GHG data, and simply chose not to file has no basis for good faith relief.
The Sullivan and Cromwell analysis notes that SB 253 faces ongoing litigation. A coalition led by the US Chamber of Commerce sought to preliminarily enjoin CARB and the California state attorney general from implementing both SB 253 and SB 261. The Ninth Circuit granted an injunction pending appeal for SB 261 in November 2025 but declined to do so for SB 253. SB 253 obligations therefore remain in effect while the litigation continues. Companies should not assume the litigation will result in the law being invalidated before the November 10 deadline.
In addition to the civil penalty exposure, non-compliant companies face reputational risk from the public nature of the docket. A public docket that shows an in-scope company with $5 billion in global revenue did not file a GHG report, with no explanation, is a different reputational situation from a company that filed an imperfect report or a statement explaining first-year data limitations.
How Does SB 253 Interact With SB 261 and Is SB 261 Still Paused?
SB 261, the Climate-Related Financial Risk Act, requires companies with annual revenue exceeding $500 million doing business in California to prepare and publish a biennial climate-related financial risk report, consistent with TCFD, IFRS S2, or an equivalent framework.
As of July 15, 2026, SB 261 remains enjoined. The Ninth Circuit granted an injunction pending the appeal of the Chamber of Commerce lawsuit in November 2025. CARB has stated it will not enforce SB 261's January 1, 2026 statutory deadline while the appeal is pending and will provide an alternate reporting date after the appeal is resolved. CARB has opened a voluntary submission docket for entities that choose to submit their climate-related financial risk reports voluntarily.
The practical difference between SB 253 and SB 261 for compliance planning:
SB 253 (GHG emissions): active, November 10, 2026 deadline, no injunction.
SB 261 (climate financial risk): enjoined by the Ninth Circuit pending appeal, no mandatory deadline currently enforceable, voluntary submission available.
The revenue threshold for SB 261 is $500 million, lower than SB 253's $1 billion. A company with $700 million in global revenue doing business in California is in scope for SB 261 but not SB 253. When SB 261 enforcement resumes (after the Ninth Circuit rules), those companies will need to file a climate-related financial risk report.
What Should Your CFO, Sustainability Team, and External Auditor Be Doing in the Next 26 Days?
The deferral to November 10 gives companies four additional months compared to the original August 10 deadline. But for companies that have not yet begun their Scope 1 and 2 data collection, four months is not a comfortable lead time. The following is an action sequence for the next 26 days.
Weeks 1 to 2 (now through late July): confirm scope and report structure.
Confirm the in-scope determination using the Revenue and Tax Code Section 23101 "doing business in California" test and the $1 billion global revenue threshold. Do not rely on CARB's preliminary entity list.
Determine the reporting entity: is the parent filing on behalf of all subsidiaries, or is a subsidiary filing a standalone report? Confirm this with legal counsel given the consolidated reporting permission in the initial regulation.
Determine the fiscal year to be reported: fiscal years ending between January 1 and February 1, 2026 report FY25-26 data; fiscal years ending February 2 through December 31, 2026 report FY24-25 data.
Assess whether the company was collecting or planning to collect Scope 1 and 2 data as of December 5, 2024. This determines whether the company must file a full report or is eligible to file the letterhead statement.
Weeks 3 to 4 (early August): assess existing GHG data and identify gaps.
Compile existing Scope 1 and 2 GHG data from prior sustainability reports, CDP submissions, EPA GHGRP filings, or other existing sources.
Identify data gaps: which facilities or emission sources are not currently covered by existing data? What is the estimated materiality of the uncovered sources?
Assess the GHG Protocol methodology alignment: is the existing data calculated under the GHG Protocol Corporate Standard using an operational control or equity share organisational boundary?
Initiate a conversation with the independent assurance provider even though assurance is not required in 2026, to begin the relationship for 2027 when limited assurance becomes mandatory.
Begin monitoring the CARB website for the opening of the submission portal and any further updates to the initial regulation.
Frequently Asked Questions
Who must file under California SB 253 by November 10, 2026?
Any US-based business entity, public or private, that (1) has total annual global revenue in excess of $1 billion and (2) meets the definition of doing business in California under Revenue and Tax Code Section 23101, meaning it is organised or commercially domiciled in California, or its California sales exceed the lesser of $500,000 or 25% of total sales. The filing entity is the parent company for consolidated groups; subsidiaries need not file separately if covered by a parent consolidated report.
What does "doing business in California" mean for SB 253?
The definition comes from California Revenue and Tax Code Section 23101(b)(1) and (2). A company is doing business in California if it is organised or commercially domiciled in California, or if its California sales exceed the lesser of $500,000 or 25% of total sales. The definition does not require physical presence, offices, or employees in California. A national company selling products or services into California through e-commerce, agents, or a distribution network can meet the definition.
What GHG emissions data must be reported under SB 253 in 2026?
Scope 1 emissions (direct emissions from owned or controlled sources) and Scope 2 emissions (indirect emissions from purchased energy) for the applicable reporting year, measured in metric tons of CO2 equivalent under the GHG Protocol Corporate Standard. Scope 2 must be reported under both the location-based and market-based methods. Scope 3 emissions are not required until 2027. No independent assurance is required for the 2026 report.
Is the CARB reporting portal open?
As of July 15, 2026, CARB has not yet opened the public submission portal. CARB's June 24, 2026 announcement deferred the deadline and indicated a 15-day public comment period on an updated initial regulation would precede finalisation. Companies should monitor ww2.arb.ca.gov for announcements about portal opening.
What happens if my company misses the November 10 deadline?
SB 253 authorises civil penalties of up to $50,000 per day per violation, with a maximum of $500,000 per reporting year per entity. For the 2026 first year, CARB's good faith enforcement discretion posture means companies making genuine good faith efforts are unlikely to face maximum penalties. Companies with no good faith basis for non-compliance face both civil penalties and public reputational risk from the non-filing visible on the public CARB docket.
Does SB 253 apply to private companies?
Yes. SB 253 applies to any US-based business entity meeting the revenue and doing business tests, regardless of whether it is publicly traded. Private companies with over $1 billion in global revenue doing business in California must file.
What is the difference between SB 253 and SB 261?
SB 253 requires annual GHG emissions disclosure (Scope 1 and 2 in 2026, Scope 3 from 2027) and applies to companies with over $1 billion in revenue. SB 261 requires biennial climate-related financial risk disclosures aligned with TCFD or IFRS S2 and applies to companies with over $500 million in revenue. SB 261 is currently enjoined by the Ninth Circuit pending litigation and has no currently enforceable deadline. SB 253 is not enjoined and has a November 10, 2026 deadline.
Key Takeaways
- On June 24, 2026, CARB deferred the first SB 253 Scope 1 and 2 GHG reporting deadline from August 10, 2026, to November 10, 2026. The substantive requirements are unchanged; companies have three additional months to prepare.
- SB 253 applies to US-based business entities with total annual global revenue exceeding $1 billion that do business in California under Revenue and Tax Code Section 23101. The "doing business" test is based on sales into California, not on physical presence, and the $500,000 California sales threshold captures most companies with any meaningful national sales footprint.
- Approximately 4,200 entities are estimated to be in scope. The obligation covers both public and private companies and both US-headquartered and foreign-headquartered companies.
- The 2026 report requires Scope 1 and Scope 2 emissions data only, measured in metric tons of CO2e under the GHG Protocol Corporate Standard. Scope 2 must be reported under both location-based and market-based methods. No independent assurance is required for 2026.
- CARB accepts four types of submissions for 2026 compliance: an existing annual report containing Scope 1 and 2 data, an existing regulatory or voluntary programme filing, data using CARB's voluntary reporting template, or a statement on company letterhead confirming the company was not collecting data as of December 5, 2024.
- Companies that were collecting or had previously published Scope 1 and 2 GHG data as of December 5, 2024 cannot use the non-collection letterhead statement. They must file their data.
- Civil penalties up to $500,000 per reporting year are authorised. Good faith enforcement discretion applies for 2026 for companies making genuine compliance efforts, but does not apply to companies that are clearly in scope and simply chose not to file.
- SB 261 (climate-related financial risk disclosures) remains enjoined by the Ninth Circuit. The November 10 SB 253 deadline is not affected by the SB 261 litigation. Companies should monitor both the CARB website and the Ninth Circuit for updates on both laws.
