California’s SB 253 mandates that companies with over $1 billion in annual revenue report their Scope 1 and Scope 2 emissions by August 10, 2026. Think of Scope 1 as a company’s direct emissions, like belching after a spicy burrito, while Scope 2 covers indirect emissions, akin to the emissions from power plants fueling those burritos. Accurate reporting is key, encouraging companies to measure their environmental impact. Get ready for the details to cook together as the deadline approaches!
Quick Overview
- California’s SB 253 requires entities with over $1 billion in revenue to report Scope 1 and Scope 2 emissions by August 10, 2026.
- Scope 1 emissions are direct emissions, while Scope 2 emissions refer to indirect emissions related to energy consumption.
- Reports must comply with Greenhouse Gas Protocol standards and cover emissions across the entire product lifecycle.
- Companies must prepare for accurate reporting by implementing real-time monitoring and establishing communication with subsidiaries and suppliers.
- Independent auditors are necessary for verifying reported emissions, ensuring environmental accountability and compliance with regulatory expectations.
Key Requirements of SB 253 for Scope 1-2 Emissions
When it comes to California’s SB 253, understanding the requirements for Scope 1 and 2 emissions can feel like trying to decipher the fine print on a credit card application—confusing at first glance but ultimately essential for responsible financial planning.
Reporting entities, those heavyweights with over $1 billion in annual revenue, must account for direct (Scope 1) and indirect (Scope 2) emissions. Proper disclosure requires evaluating impacts across the entire product lifecycle, from manufacturing operations to energy consumption.
Think of Scope 1 emissions as the smoke from your own barbecue, while Scope 2 is the heat from that cozy pizza place down the street. Both need to be reported in metric tons of CO₂ equivalent. Additionally, these emissions disclosures must comply with the Greenhouse Gas Protocol standards, ensuring consistency and transparency in reporting. To facilitate this process, CARB has developed a voluntary template for first-time disclosers to streamline their reporting efforts.
Compliance Timeline for SB 253: Key Dates for 2026
The countdown to compliance for California’s SB 253 is officially on, with a critical deadline looming just around the corner: August 10, 2026.
Covered entities must submit their Scope 1 and Scope 2 emissions reports by this date, a full six months after the end of their fiscal year.
While the California Air Resources Board (CARB) proposed this date as a slight improvement, clarity around regulations remains elusive. Enforcement of SB 261 legal challenges won’t pause deadlines, so companies must stay sharp. Additionally, the delay in rulemaking timeline means companies will need to adapt quickly to any last-minute changes in regulations.
Companies should recognize that these disclosure requirements align with the environmental pillar of ESG, which investors increasingly use to evaluate business sustainability practices.
The clock is ticking, and those with revenues over $1 billion should be ready to disclose their greenhouse gas emissions—no pressure!
How to Prepare for Accurate Scope 1-2 Reporting?
With the August 10, 2026 deadline fast approaching, companies are feeling the heat to guarantee their Scope 1 and Scope 2 emissions reporting is on point. To start, implement real-time monitoring systems to capture emissions data like a hawk eyeing its prey. Next, engage energy management software to track indirect emissions—think of it as tracking your calories, but for energy! Don’t forget to integrate this data with financial systems for seamless documentation. Finally, establish clear communication with subsidiaries and suppliers, ensuring everyone’s on the same emissions page. Additionally, be aware that SB 253 requires independent auditors for verification of reported emissions, highlighting the importance of accuracy. It’s crucial to note that entities with over 1 billion in revenue must comply with these regulations, which emphasizes the significance of accurate reporting. Companies should consider adopting standardized methodologies for evaluating environmental performance across their supply chains to ensure comprehensive sustainability reporting. After all, teamwork makes the dream work—especially in sustainability!
