Part 4: Your California Climate Disclosure Journey – How to Report Emissions Under SB 253

California's Climate Corporate Data Accountability Act (SB 253) is moving from policy to practice with the California Air Resources Board (CARB)’s October 2025 release of a draft reporting template for Scope 1 and Scope 2 emissions. This gives in scope companies a clear starting point for their 2026 disclosures.

At SINAI, we see this as a positive step. The draft template reduces administrative burden by mirroring how most companies already collect and verify emissions data.

This post is Part 4 in our ongoing series on California's climate disclosure rules:

• 👉 Part 1: Are You "Doing Business" in California? – Understand key definitions and determine if you are in scope for SB 253 and SB 261.
• 👉 Part 2: Timelines, Assurance, and Compliance Checklists – Review key deadlines and preparation steps for SB 253 and SB 261.
• 👉 Part 3: Key Takeaways from CARB's July 2025 FAQs – See recent clarifications from CARB's guidance on the new climate disclosure laws.

‍

In this post, we’ll explore CARB’s draft template, its impact on 2026 reporting, and next steps. (You can read our formal public comment letter to CARB here.) 

Who needs to comply, and what needs to be reported?

SB 253 and SB 261 set disclosure mandates for large companies "doing business" in California, defining who must report GHG emissions and climate risks starting in 2026.

‍

• SB 253 (Climate Corporate Data Accountability Act): Applies to U.S. companies with over $1 billion in annual revenue that are doing business in California. These companies must report global Scope 1 and Scope 2 greenhouse gas (GHG) emissions starting in 2026 (using 2025 data) and include Scope 3 emissions in 2027.
  
  • Scope 1: Direct GHG emissions from owned or controlled sources.
  • Scope 2: Indirect emissions from purchased energy. 
  • Scope 3: Emissions that occur in a company's value chain, both upstream and downstream.
• SB 261 (Climate-Related Financial Risk Disclosure): Applies to companies with over $500 million in revenue, requiring a biennial climate-related financial risk report starting January 1, 2026. (This is a narrative risk disclosure separate from the GHG emissions reporting of SB 253.)

What is CARB's draft Scope 1 & 2 reporting template?

The draft Scope 1 and 2 GHG reporting template is a standardized form to guide first-year emissions disclosures under SB 253. It aims to streamline the reporting process, making it easier for companies to comply.

‍

• Purpose: The template provides a clear format and checklist for reporting, minimizing confusion.
• Voluntary First-Year Use: While using the template is optional for the 2026 filing, it offers a preview of CARB's future requirements. 

Are companies required to use the template for 2026 reporting?

No, the use of the template in 2026 is not mandatory. CARB treats it as guidance, allowing flexibility in how companies submit their reports. Future years may have specific requirements based on feedback and regulatory updates. 

What information does the draft template include?

CARB's draft template breaks down the disclosure into clear sections, covering everything from organizational details to emissions data. It mirrors how many companies already compile GHG inventories, ensuring that all key elements are reported consistently. 

‍

The main sections of the template are:

• Organization Information & Boundary: Basic identifying details about the reporting entity (name, headquarters, primary NAICS industry code, EIN, etc.) and a description of the organizational boundary for the inventory. Companies must specify which boundary approach they use – equity share, financial control, or operational control – to define which operations are included. This section also asks whether any regions or facilities are excluded from the boundary (and why), and confirms if specific sources (like stationary combustion, mobile sources, purchased electricity, etc.) are included in the Scope 1 and 2 tally. (Defining the boundary upfront clarifies the scope of your emissions report, per GHG Protocol guidance.)
• Third-Party Verification: A section to confirm whether your reported Scope 1 and 2 emissions have been assured by an independent third-party auditor. SB 253 requires at least limited assurance for emissions data, so the template asks for the verifier's name and contact details, the assurance level (e.g., limited), and the verification date. If you haven't obtained assurance yet, you can note that and explain. This ensures transparency about data quality and compliance with the assurance requirement.
• Scope 1 & Scope 2 Emissions: The core of the template focuses on your emissions totals. It has fields to report Scope 1 (direct) emissions and Scope 2 (indirect from purchased energy) emissions, typically in metric tons of CO₂-equivalent (CO₂e). The draft form organizes these by source type—for example, stationary combustion, mobile combustion, process emissions, and fugitive emissions for Scope 1, and purchased electricity, heating, steam, and cooling for Scope 2. You'll report total emissions for each scope, and you can break them down further by individual greenhouse gas (CO₂, CH₄, N₂O, HFCs, etc.) if that data is available. The template also asks for at least one emissions intensity metric – essentially a ratio that normalizes emissions to your business size or output. Most commonly, this is tons CO₂e per $ million in revenue, which is required for both Scope 1 and 2. (Providing an intensity metric helps investors compare emissions performance across companies of different sizes.) Additionally, you'll note the reporting period dates (the start and end of the fiscal year covered).
• Methodology & Emission Factors: Here, you describe how the emissions were calculated. The template prompts companies to list the sources and years of the emission factors used for Scope 1 and Scope 2 calculations. For instance, you might indicate that you used U.S. EPA emissions factors from a particular year, or IPCC factors with specific Global Warming Potentials (GWPs). You also note the source of the GWP values (e.g., IPCC AR5) and the calculation approach (e.g., "activity data × emission factor"). If you use any tools or models (such as calculation software or a spreadsheet), you can mention them as well. This methodological transparency allows CARB and other readers to gauge the rigor and consistency of your GHG accounting.

What other details does the template ask for?

Beyond the basics above, CARB's draft template includes additional fields to capture context and special cases. These ensure that the disclosure is thorough and "decision-useful" for stakeholders reviewing the data. 

‍

Notable additional sections include:

• De Minimis / Excluded Sources: The template provides a place to list any small emission sources you left out of your inventory because they are de minimis (negligible in impact). CARB allows companies to exclude de minimis sources up to a certain threshold (to keep reporting focused on material emissions). In the form, you identify what those excluded sources are and estimate the quantity of emissions associated with them. This way, even omissions are transparent.
• Emission Reduction Initiatives: An optional section allows companies to report emissions reductions achieved through specific actions, such as direct purchases of renewable electricity or renewable natural gas (RNG). If you've offset part of your emissions or cut them via projects, you can note the amount of emissions avoided or reduced (in CO₂e) from those measures. This is CARB's way of giving credit for proactive climate action – while it doesn't negate your gross emissions, it shows stakeholders that you're taking steps to lower your footprint. 
• MRR Cross-Reference: For companies that already report specific emissions under California's Mandatory Reporting Regulation (MRR) (e.g., large facilities in cap-and-trade), the template has a field to enter the facility'sMRR ID numbers. This allows CARB to cross-check your SB 253 disclosure against existing data in their databases. Including MRR Facility IDs (and Supplier IDs, if relevant) ensures consistency and can reduce duplicate reporting efforts by linking the datasets.
• Base Year and Historical Data (Optional): You can include a base-year emission total, as well as future-year projections or prior-year data. While not required, reporting a base year (e.g., 2020 or 2021 emissions as a baseline) can help demonstrate your trend over time. The template's optional fields allow you to enter a base year and track progress (percent change) in subsequent years, which can help show reductions or increases in emissions. This section is there for companies that want to provide that longer-term context or have internal targets tied to a baseline.
• Intensity Metrics & NAICS Code: As mentioned earlier, the template asks for an intensity metric, such as emissions per revenue. It also requests your company's industry sector classification (NAICS code at the 2-digit level). Providing the NAICS code helps CARB group and benchmark emissions by industry sector (for example, comparing emissions intensity of a manufacturing company against others in manufacturing). These contextual data points enhance the usefulness of the disclosure for analysts and investors, allowing apples-to-apples comparisons across similar businesses.

Does the draft template align with the GHG Protocol and other standards?

Yes, CARB's draft template is deliberately aligned with established GHG accounting standards, so it should feel familiar to companies already following the GHG Protocol or ISO 14064-1 guidelines for emissions reporting. In essence, it covers the same fundamentals as most corporate GHG inventories, without introducing any unexpected new requirements.

‍

• GHG Protocol Foundation: The structure and terms of the template mirror the GHG Protocol, the widely used international standard for corporate greenhouse gas accounting. For instance, the template uses the Scope 1, 2, 3 framework; it references operational/control boundaries; it requires emission factors and GWPs – all of which come straight from GHG Protocol principles. In fact, SB 253 explicitly requires reporting in accordance with the GHG Protocol. If your company already produces an annual GHG inventory or sustainability report, you likely categorize and calculate emissions in this same way.
• No Major Surprises: Because of this alignment, the draft template is unlikely to contain anything out of the ordinary for companies with experience in carbon footprinting. It adheres to international norms (e.g., ISO 14064-1, a global standard for organizational GHG reporting, which aligns with GHG Protocol methods). The template's sections (organization info, scopes, etc.) are standard elements you'd find in any rigorous GHG reporting framework. This means you won't need a new methodology just for California—you can leverage your existing data and processes.
• "Streamlined, Sound, and Clear": CARB's goal was to keep the reporting process straightforward and user-friendly while still meeting the law's objectives. Agency officials have described their approach as making the regulation "streamlined, sound, and clear" for reporters. By providing a template aligned with familiar standards, they reduce confusion and burden. Companies can focus on getting accurate data, rather than deciphering new reporting formats.
• Future Scope 3 Template: Notably, this draft template covers only Scope 1 and 2, since Scope 3 reporting isn't required until 2027. CARB has indicated it will likely release an updated template or guidance for Scope 3 emissions later. We expect future guidance to align with GHG Protocol Scope 3 categories as well. For now, companies can use existing value-chain accounting practices (15 Scope 3 categories defined by the GHG Protocol) to begin evaluating those emissions in preparation for the 2027 requirement.

How will the draft template impact 2026 reporting plans?

For companies in the scope of SB 253, the draft template essentially lays out a roadmap for what first GHG disclosure should include. Even if you don't strictly follow the form, it will likely shape regulators' expectations. Here's what the template means for your 2026 reporting:

• Clarity on Required Data: The template spells out all the data fields you should be ready to report—from total emissions to methods and verification. This clarity is a huge advantage. By studying the template, your team can perform an early gap analysis: Do you have data for each field? For example, can you break out emissions by source? Do you know your emission factors? Can you calculate an intensity metric? Identifying any gaps now (in 2025) gives you time to collect or calculate what's needed before the reporting deadline.
• Internal Alignment: Different departments (environmental, sustainability, finance, operations) will need to collaborate to populate this template. The finance team might provide revenue for intensity calculations; facilities may provide energy usage; EHS or sustainability teams handle emission factors and boundaries. The template can serve as an internal checklist to ensure all contributors know what information to provide. It standardizes the questions that need to be answered.
• Verification Planning: Since the template asks about third-party assurance, it's a reminder that you'll need your 2025 emissions data verified by an independent auditor (at least at a limited assurance level) by the time of reporting. Companies should plan for this in advance – e.g., engage a verification body in late 2025 or early 2026 to review your inventory. The smoothest path is to have your data organized according to the template, which will also make the verifier's job easier.
• Benchmarking and Transparency: By including metrics such as intensity and NAICS sectors, the template foreshadows a world in which regulators and investors will compare disclosures across companies. Firms that use this template will present their data in a way that's directly comparable to peers. This could put competitive pressure to have better (lower) emissions intensity over time. Being prepared to explain your intensity metric (and any improvements year-over-year) will be part of the narrative when disclosing publicly.

What steps should companies take next to prepare?

With the first SB 253 reporting deadline approaching, companies should use 2025 as a year of preparation. The draft template provides a clear checklist of items to tackle now. 

‍

Key next steps include:

• Collect and Organize Data: Ensure you can gather all necessary data for 2025 aligned with the template's categories. Start mapping your emission sources (fuel use, electricity use, fleet, etc.) and set up systems to measure or estimate emissions from each. If you haven't already, begin compiling your Scope 1 and 2 emissions for the current year so that you're ready to report them in early 2026.
• Set Your Inventory Boundary: Decide whether you will report based on operational control, financial control, or equity share approach for consolidating emissions. This will determine which subsidiaries, joint ventures, or facilities you include. Document this choice and identify all entities that fall within that boundary. Resolving any questions about organizational structure now will save headaches when it's time to report.
• Engage an Assurance Provider: Since verification is required (limited assurance for Scope 1 and 2 in the initial years), arrange a third-party verifier or auditor in advance. This could be a certified GHG verifier or an accounting firm with climate expertise. Early engagement enables the verifier to conduct an initial readiness assessment, allowing you to address any data quality issues before the formal assurance process.
• Pilot the Template: Consider doing a dry run with the draft template using your 2024 data or partial 2025 data. Fill out the sections to see where you struggle. For example, calculate an emission intensity metric, or see if you can easily pull last year's emissions factor sources and GWP info. This practice run can highlight any areas where you need clarification or help, which you can then seek before the actual report is due.
• Start Tackling Scope 3 Data (Value Chain Emissions): Even though Scope 3 reporting isn't required until the 2027 cycle, innovative companies will begin gathering that data now. Scope 3 often constitutes the majority (70% or more) of a company's carbon footprint. Begin engaging with your suppliers and estimate categories such as business travel, product use, and purchased goods emissions. By building a Scope 3 data collection plan in 2025, you'll be in a much better position to report those in the following year – and you might even discover reduction opportunities in the process.
• Monitor Regulatory Developments: Keep an eye on CARB's rulemaking process throughout late 2025 and early 2026. The agency will be refining the rules (for example, confirming the exact reporting deadline, fees, and any changes to requirements). Watch for the final adopted regulations and any updated templates CARB releases. Also, review CARB's FAQs, workshops, or guidance documents regularly to stay current on interpretations. If there are industry groups or webinars about SB 253/SB 261, consider participating to hear how others are preparing.
• Integrate with Climate Risk Disclosures: If you're also subject to SB 261, coordinate the workstreams for emissions reporting and climate risk reporting. The data from your SB 253 report (like emissions totals, scenarios for future emissions) can inform your SB 261 climate risk analysis, and vice versa. Aligning these efforts will make your overall climate disclosure more coherent. For example, the risk report might discuss transition risks to reduce emissions, linking directly to your emissions baseline from SB 253. Using frameworks like TCFD for SB 261 will ensure you consider how emissions management plays into your strategic risk outlook.

‍

By taking these steps now, companies will be well-positioned to meet California's climate disclosure requirements with confidence. The draft template is a helpful compass – using it proactively can transform what might seem like a compliance burden into a structured project plan for improving your carbon management.

Next Steps with SINAI

Need help navigating these requirements? Compliance doesn't have to be a headache. With SINAI's expert team and all-in-one platform, you can tackle SB 253 and SB 261 requirements in a fraction of the time, and generate reports that regulators and auditors trust. We've been closely involved in California's climate disclosure rule development (as a stakeholder and technology provider) and have distilled that knowledge into software that does the heavy lifting for you.

‍

With SINAI, companies can:

• Export a template-ready SB 253 report directly from their existing data
• Provide audit-ready documentation and data lineage
• Generate Scope 1-2 reports with verifier-friendly formats for assurance
• Prepare SB 261 risk disclosures aligned with TCFD and IFRS S2

‍

SINAI's methodology is TÜV Rheinland-certified and aligned with GHG Protocol and ISO 14064-1. With the right tools and partners, SB 253 and SB 261 compliance can integrate seamlessly into your climate strategy.

‍

👉 Explore SINAI's California Climate Compliance Playbook or book a 20-minute walkthrough to see how our platform streamlines SB 253 GHG reporting – from data collection to automated calculations – in one integrated solution.

‍