California SB 253 – Expert advice on how to get a head start

California’s landmark climate disclosure laws, SB 253 and SB 261, have set a new standard for corporate accountability across the U.S. The Climate Corporate Data Accountability Act (SB 253) mandates comprehensive GHG emissions reporting for large public and private companies doing business in the state.

The clock is ticking on these mandates; with reporting for Scope 1, 2, and 3 beginning in 2026, the immense challenge of collecting and verifying value chain data demands a proactive strategy. For a practical guide to getting ahead, we’ve connected with Sweep’s expert, Alison Gammie, who shares her insights on why preparing now is non-negotiable.

The criteria also consider whether an entity produces business income through transactions or activities in California.

The law requires a phased approach to reporting. Companies must begin disclosing their Scope 1 and Scope 2 emissions starting in 2026, based on their 2025 fiscal year data. As part of this phased approach, companies must engage an independent third party to conduct a limited third party assurance engagement for their Scope 1 and 2 emissions disclosures. Then, in 2027, they must start reporting their Scope 3 emissions, based on their 2026 fiscal year data.

A critical component is the assurance requirement. Starting in 2026, companies will need to secure a third-party limited assurance for their Scope 1 and 2 emissions. Eventually, this will be upgraded to reasonable assurance, a level of scrutiny similar to a financial audit. For Scope 3, limited assurance will also be required down the line.

Beyond compliance, why should companies view SB 253 as a pivotal moment, not just another regulation?

That’s a great question, and it gets to the heart of what this law is all about. This isn’t just about checking a box. SB 253 is designed to help companies identify and manage climate risks, including climate-related financial risk, by requiring comprehensive disclosure of greenhouse gases. SB 253 is the first law of its kind in the US to make climate disclosure a real requirement, and that’s going to have a ripple effect. It’s moving the entire conversation from voluntary commitments to a new era of accountability

This level of transparency gives your investors, customers, and even regulators the information they need to make better decisions.

Ultimately, SB 253 turns climate action into a strategic opportunity. By tackling this head on, you’re not just avoiding penalties. Understanding and disclosing climate risk is increasingly important for investor confidence and long-term business resilience. You’re building a more resilient business, finding new efficiencies, and getting ahead of your competitors in a world that is demanding real action.

Why is getting a head start so critical, and what are the risks of waiting?

When we think about the practicalities of reporting, the deadlines for California’s climate disclosure laws might seem a little far away, but they really aren’t. The complexity of these requirements is why timely reporting implementation is so important. Companies will also need to evaluate trends in their emissions data over time to ensure ongoing compliance and continuous improvement.

The biggest challenge is simply the sheer amount of data needed, especially for Scope 3 greenhouse gas emissions. You have to gather this information from across your entire value chain, and that can be a huge effort. Emissions must be measured and reported in accordance with the Greenhouse Gas Protocol to ensure consistency and comparability. This goes for all kinds of businesses, from partnerships to limited liability companies, across a wide range of particular business sectors. It’s not a one time task. Getting a head start allows you to build a robust foundation that will stand up to scrutiny.

Ultimately, the goal of these efforts is to achieve meaningful greenhouse gas emissions reductions.

What other practical considerations, should business entities keep in mind regarding this law’s implementation and how it might evolve?

Great question. First, let’s talk about the enforcement. The California Air Resources Board (CARB) is the state agency responsible for oversight, developing, and running this whole reporting program. CARB will establish an emissions reporting organization to manage the public disclosure and verification of emissions data. CARB is empowered to enforce compliance and seek administrative penalties for violations of the reporting requirements. The program is funded through an emissions disclosure fund, which collects fees from reporting entities to support implementation and compliance activities. This is a continuously appropriated fund to ensure ongoing support for program implementation.

The goal is to make all of the information publicly accessible, so stakeholders representing consumer, environmental justice interests, and other government stakeholders can all view the data. CARB’s regulations also address criteria pollutants and toxic air contaminants, and relevant policy committees provide oversight and guidance for these regulations. CARB will also coordinate with the federal government to align state reporting frameworks with national standards and ensure consistency across agencies.