California is proposing to limit the initial Scope 3 emissions disclosures required under Senate Bill 253 to five commonly reported categories. The California Air Resources Board (CARB) presented the proposed approach during a public workshop on the state’s Corporate Greenhouse Gas Reporting Program. The regulator said stakeholder feedback had raised concerns about the cost, complexity and availability of reliable data across all 15 Scope 3 categories.
Under the proposed phase-in, covered companies would begin reporting five Scope 3 categories in 2027. Reporting on the remaining categories would initially be voluntary. The approach is not yet final. CARB plans to gather further stakeholder feedback before completing the implementing requirements.
Which Scope 3 Categories Would Be Reported First?
CARB is proposing that initial mandatory Scope 3 reporting cover purchased goods and services, fuel- and energy-related activities, waste generated in operations, business travel, and employee commuting. CARB selected these categories because they are already among the most commonly reported and generally have more established data sources and calculation methods.
The Greenhouse Gas Protocol identifies 15 Scope 3 categories covering indirect emissions across an organization’s value chain. CARB has not yet provided a mandatory reporting timeline for the remaining ten categories. Under the current proposal, companies could disclose them voluntarily during the initial phase.
Key Highlights
Five priority categories: Purchased goods and services, fuel- and energy-related activities, waste generated in operations, business travel, and employee commuting.
Phased start in 2027: The five categories become mandatory, while the remaining ten are voluntary during the initial phase.
Revised deadline: CARB plans to move the first Scope 1 and Scope 2 reporting deadline to November 10, 2026, replacing the earlier August deadline.
Limited assurance: Covered companies would obtain limited assurance over Scope 1 and Scope 2 disclosures beginning in 2027.
Why Is California Considering a Phased Approach?
CARB previously considered several options for introducing Scope 3 reporting, including requiring all 15 categories from 2027, phasing in reporting for selected industries, and phasing in reporting by Scope 3 category. Stakeholder feedback indicated that requiring every category immediately could create significant cost and data availability challenges.
Scope 3 reporting often depends on information obtained from suppliers, employees, logistics providers and other third parties. The quality, accessibility and level of detail of this information can vary considerably across organizations and value chains. CARB’s preferred approach would begin with categories for which reporting practices and calculation methods are more mature, while giving companies additional time to strengthen processes for the remaining categories.
What Does SB 253 Require?
California’s Climate Corporate Data Accountability Act, commonly referred to as SB 253, applies to certain U.S.-based entities that do business in California and have annual revenues exceeding $1 billion. Covered entities are required to report their Scope 1 and Scope 2 greenhouse gas emissions annually. Scope 3 reporting is scheduled to begin in 2027.
CARB has also announced plans to move the first Scope 1 and Scope 2 reporting deadline to November 10, 2026, replacing the earlier August deadline. The detailed Scope 3 reporting schedule, submission requirements and implementation rules remain under development.
Limited Assurance Proposed From 2027
CARB also outlined its proposed approach to assurance. Under the proposal, covered companies would be required to obtain limited assurance over their Scope 1 and Scope 2 emissions disclosures beginning in 2027. CARB identified several standards that could be accepted for assurance engagements, including the AA1000 Assurance Standard v3, AICPA AT-C Section 210, ISO 14064-3:2019, ISAE 3410 and ISAE 3000 for eligible earlier engagements, and ISSA 5000 for engagements beginning after December 15, 2026.
The final assurance requirements, accepted standards and implementation details will depend on CARB’s completed regulations.
Insurance Companies May Enter the Reporting Regime in 2027
Insurance companies were exempted from the initial 2026 greenhouse gas reporting requirement because they already report certain emissions information to the California Department of Insurance. CARB has indicated that the existing insurance reporting framework may not fully satisfy SB 253 because it does not include equivalent Scope 3 and assurance requirements.
The regulator is therefore proposing that insurance companies comply with SB 253 from 2027. They may be able to do so through a report that satisfies both regulatory frameworks or through a supplementary submission alongside their existing insurance disclosure.
What Should Companies Do Now?
The proposed reduction in initial Scope 3 categories should not be treated as a reason to delay preparation. Covered companies should begin identifying which legal entities may fall within the reporting boundary, where Scope 1, Scope 2 and Scope 3 data currently resides, and which teams and third parties own the required information.
They should also document how emissions calculations and assumptions will be captured, what evidence will be needed for review and assurance, and where reporting gaps exist across the five proposed priority categories. Companies should assess the remaining Scope 3 categories as well. CARB’s current proposal narrows only the initial mandatory disclosures; it does not necessarily remove broader value-chain reporting from the future regulatory roadmap. CARB plans to conduct further listening sessions and collect written stakeholder comments before finalizing the requirements.
How EcoActive Helps
EcoActive helps organizations build a controlled, traceable and audit-ready process for greenhouse gas and sustainability reporting.
Centralized ESG Data Management
Bring emissions data, calculation inputs, supporting documents and reporting evidence into a centralized environment while continuing to use existing Excel, Word and PDF files as source documents.
Scope 1, Scope 2 and Scope 3 Reporting
Organize emissions information by entity, facility, business unit, emissions scope and Scope 3 category. This helps teams manage the five proposed initial categories while preparing for broader reporting requirements.
Structured Data Collection
Assign data requests to internal teams and external contributors through governed workflows, with clear responsibilities, deadlines and reporting status.
Automated Validation
Apply validation checks throughout the reporting cycle to identify missing data, inconsistencies and calculation issues before disclosures reach final review.
Evidence and Calculation Traceability
Connect reported emissions to source data, methodologies, assumptions, emission factors and supporting evidence, creating a traceable record for internal review and external assurance.
Governed Review and Approval
Manage comments, approvals, version control and changes through role-based workflows supported by a complete audit trail.
California’s proposed phase-in may narrow the first Scope 3 reporting requirement, but companies will still need reliable data, documented methodologies and strong reporting controls.
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