With the end of the year approaching, many companies are preparing for California’s Climate Corporate Data Accountability Act (SB 253). Organizations in scope must disclose their Scope 1 and 2 greenhouse gas (GHG) emissions starting in 2026, using 2025 data, followed by Scope 3 in 2027.
For companies disclosing for the first time, the process may feel overwhelming. The law introduces new requirements, but also an opportunity: the chance to build scalable processes that support broader climate reporting frameworks and strengthen your business resilience. The following checklist offers step-by-step guidance to help you prepare.
? Want to go deeper? Watch our on-demand California Climate Updates webinar for expert guidance on SB 253 and related disclosure laws.
Preparing Your First SB 253 Report: A Checklist
Gathering and calculating emissions data can be complex and resource-intensive, especially in the beginning. To streamline the process, we’ve created a checklist. Following the steps below will help you save time and avoid bottlenecks as you prepare your first report.?
1. Understand the requirements and deadlines
Before you begin, take time to fully understand SB 253’s scope and obligations. The law applies to U.S. companies with more than $1 billion in annual revenue doing business in California — regardless of whether they are public or private.
- Reporting timeline:
- Scope 1 and 2 emissions must be disclosed in 2026, based on 2025 data.
- Scope 3 emissions reporting follows in 2027.
- Assurance: Companies must engage third-party assurance providers, beginning with limited assurance for Scope 1 and 2 in 2026.
- Penalties: Non-compliance may result in fines of up to $500,000 annually.
CARB (California Air Resources Board) regularly issues workshops and that clarify definitions (such as “doing business in California”), revenue thresholds, exemptions, and assurance standards. and plan to review guidance quarterly. Staying current avoids costly misinterpretation and helps you demonstrate a good faith effort — something CARB has emphasized in its enforcement approach. Using a carbon accounting platform that aligns directly with SB 253 will also help ensure you’re following the most recent guidance.?
2. Identify what data you need and where to find it
The backbone of your SB 253 disclosure is accurate, complete emissions data. Start by mapping out what data is needed, who owns it, and how reliable it is today.
- Scope 1: Direct emissions from owned or controlled sources (e.g., boilers, furnaces, company-owned vehicles). This often requires coordination with facilities and operations teams.
- Scope 2: Indirect emissions from purchased energy (e.g., electricity, heating, cooling). Utility bills and energy procurement records are the primary source.
- Scope 3: Indirect emissions across the value chain (suppliers, logistics, waste, use of sold products). Though not due until 2027, begin identifying relevant categories now. Supplier engagement takes time.
Practical tip: Create a simple inventory of potential data owners. Facilities may track HVAC systems, procurement may hold supplier contracts, finance can provide spend data, and IT may house energy-use records in systems. Documenting this early avoids bottlenecks when deadlines loom.
3. Form a cross-functional working group
Climate disclosure touches many functions. Establishing a working group early reduces bottlenecks and improves accuracy. Typical roles include:
- Sustainability: Brings subject-matter expertise on emissions calculation and reporting standards.
- Legal & Compliance: Ensures disclosures meet regulatory requirements and minimize liability.
- Finance: Provides spend data, validates accuracy, and links emissions to financial reporting.
- Procurement: Accesses supplier information needed for Scope 3 reporting and future compliance.
- Operations: Supplies activity data such as energy use, facilities, and logistics.
- IT: Supports data systems, integration, and security.
By creating clear accountability across functions, you reduce friction, build credibility in your disclosure, and pave a smoother path to assurance and submission.
4. Establish a centralized data management system
Fragmented spreadsheets or manual processes can increase risk of errors. A central repository is a key step for avoiding miscalculations and organizing information from multiple sources. Automated carbon accounting software is the best way to manage data, create scalable frameworks and processes, and prepare for assurance.
This system should:
- Store data in a consistent format across facilities, business units, and geographies.
- Record calculation methodologies, emission factors, and assumptions for auditability.
- Enable scenario updates (e.g., if CARB adjusts requirements).
- Scale to handle Scope 3 data from suppliers.
By leveraging a platform designed specifically for SB 253, you can save considerable time and ensure that your report is aligned with the latest requirements.?
5. Gather data and calculate your carbon footprint?
This is often the most resource-intensive stage. Begin with the data that is easiest to obtain — utility bills, energy invoices, fleet fuel use — then expand outward.
As you calculate:
- Define boundaries: Decide whether you are using operational control, financial control, or equity share approaches.
- Use recognized factors: Apply emissions factors from EPA, IPCC, or other recognized sources.
- Document assumptions: Whether you extrapolate data, use spend-based estimates, or apply proxies, write it down. Transparency builds trust with assurance providers.
Collecting data can take longer than expected, particularly if you are engaging suppliers. Build in buffer time for clarification and verification. You can follow our guidance here to avoid common obstacles.
6. Engage an assurance provider?
You’ll have to find a qualified third-party assurance provider who meets CARB’s criteria for experience and independence. Starting early can help avoid a last-minute scramble (and premium pricing).
Assurance providers will want to see:
- Documentation of data sources.
- Calculation methodologies.
- Evidence of internal controls and review.
If you’ve documented your data collection and calculation methods from the beginning, you’ll prevent unnecessary back-and-forth with the provider.?
7. Submit your report?
According to CARB's latest guidance, SB 253 reports will need to be:
- Hosted on your company’s website.
- Linked in CARB’s public docket, which will provide a searchable database of disclosures.
Prepare your communications team to anticipate questions from investors, customers, and the public. Transparency is both a compliance requirement and a reputational opportunity.
8. Review your process and plan ahead
After submitting your first SB 253 report, take time to assess:
- Where did bottlenecks occur?
- Was data difficult to obtain, or incomplete?
- How could processes be automated or scaled?
This reflection is critical as Scope 3 requirements phase in 2027. Reporting boundaries will expand, and data complexity will increase. A continuous improvement mindset now will save significant effort later.
Looking Ahead?
Your first SB 253 report is an opportunity to set up systems that will support future reporting—not just for California, but for other climate disclosure frameworks like CDP. It’s also a chance to uncover operational efficiencies and cost savings. By aligning the reporting process with your long-term business goals, you’ll be better equipped to adapt to an evolving regulatory and market landscape, turning compliance into a competitive advantage and building lasting business value.
