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

Editor’s note: This article was originally published after CARB released its draft Scope 1 and Scope 2 reporting template in October 2025. It was updated in March 2026 to reflect CARB’s approved rule, including the August 10, 2026 first-year SB 253 reporting deadline, first-year Scope 1 and Scope 2 reporting, and CARB’s good-faith enforcement approach for the initial cycle.

California’s Climate Corporate Data Accountability Act, SB 253, has moved from policy debate into execution. CARB has now set August 10, 2026 as the first reporting deadline, with first-year disclosures limited to Scope 1 and Scope 2 emissions. For companies in scope, the immediate priority is no longer interpreting the rule at a high level. It is building a reporting process that can withstand disclosure, review, and assurance-style scrutiny.

The reporting template still matters because it signals how CARB expects emissions data to be structured in practice. The stronger message now, however, is operational: companies need a complete Scope 1 and Scope 2 inventory, a clearly defined organizational boundary, documented methodology, and records that can support internal review and third-party assurance workstreams.

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 break down what companies should prepare now for SB 253 reporting, what the template still tells us about regulator expectations, and how to approach Scope 3 before it becomes a reporting requirement in 2027. You can also read SINAI’s formal public comment letter to CARB for additional detail on reporting structure and data fields.

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

SB 253 and SB 261 apply to large companies doing business in California, but they impose different disclosure obligations. SB 253 governs annual greenhouse gas emissions reporting. SB 261 governs climate-related financial risk disclosure. The workstreams are related, but they should not be treated as the same exercise.

SB 253 (Climate Corporate Data Accountability Act): Applies to companies doing business in California with more than $1 billion in annual revenue. The first filing is due August 10, 2026 and covers Scope 1 and Scope 2 emissions. Scope 3 reporting begins in 2027.

1. Scope 1: Direct GHG emissions from owned or controlled sources.
2. Scope 2: Indirect emissions from purchased energy. 
3. Scope 3: Emissions that occur in a company's value chain, both upstream and downstream.
4. SB 261 (Climate-Related Financial Risk Disclosure): Applies to companies doing business in California with more than $500 million in annual revenue and requires a biennial climate-related financial risk report. It is a narrative disclosure and should be managed separately from the emissions inventory required under SB 253.

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

CARB’s draft Scope 1 and Scope 2 reporting template is still useful because it shows the likely structure of first-year disclosures. Even where the template remains guidance rather than a mandatory filing format, it gives companies a practical checklist for the data, methodology, and contextual fields regulators are likely to expect.

• 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?

For the first cycle, the more important point is not whether companies mirror every field in the draft template. It is whether they can produce a complete and defensible Scope 1 and Scope 2 inventory, explain how the data was assembled, and support the disclosure with consistent documentation. The template remains the clearest public signal of what that disclosure structure may look like.

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: The template includes third-party verification fields, which is a signal that companies should build their inventories with assurance in mind. Even where first-year assurance expectations are still evolving, companies should assume that data lineage, methodology documentation, and reviewer-ready evidence will matter from the first cycle onward.

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, which means companies should be ready to pair absolute emissions totals with a denominator such as revenue, production, or another business-relevant metric. Most commonly, this is measured in tons of 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 covered fiscal year).

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. In practice, this means companies should be able to show which factors were used, which global warming potential basis was applied, where estimates or proxies were used, and what would trigger a recalculation in future years.

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). The draft structure suggests that excluded or minor sources should still be handled transparently. Companies should be prepared to identify what was left out, why it was excluded, and how materiality or de minimis judgments were made. 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 the cap-and-trade program), the template includes a field to enter the facility's MRR ID numbers. This allows CARB to cross-check your SB 253 disclosure against existing data in its 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, 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 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 include anything out of the ordinary for companies experienced in carbon footprinting. It adheres to international norms (e.g., ISO 14064-1, a global standard for organizational GHG reporting that aligns with the 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.

What should companies have ready before the first SB 253 deadline?

For companies in scope, the first filing is now close enough that preparation should be treated as a live reporting workstream. The template is still helpful, but the immediate objective is broader: build a complete Scope 1 and Scope 2 inventory that is organized, explainable, and ready for review by internal stakeholders, external advisors, and assurance providers.‍

1. Structured emissions data: Organize Scope 1 and Scope 2 emissions by source category, reporting period, and business boundary so the inventory can be reviewed consistently across teams.‍

2. Methodology that can be defended: Document emission factors, global warming potential basis, calculation logic, estimation methods, exclusions, and any use of contractual instruments for Scope 2.‍

3. A clearly defined inventory boundary: Select a single consolidation approach and apply it consistently across the reporting entity. Regulators and reviewers will care as much about what is included as about the totals themselves.‍

4. Records that support review and assurance: Build an evidence trail that makes it easy to trace reported numbers back to source data, assumptions, and approval steps.

What steps should companies take next to prepare?

With the first SB 253 deadline now set for August 10, 2026, companies should use the current cycle to close data gaps, finalize inventory design decisions, and build a reporting process that can hold up under scrutiny.

Key next steps include:

1. Complete your Scope 1 and Scope 2 data foundation. Make sure activity data is collected for all relevant fuel, electricity, heat, steam, cooling, fleet, fugitive, and process sources that fall within the reporting boundary.
2. Lock your organizational boundary. Choose one consolidation approach and document which entities, facilities, and operations are included.
3. Document methodology before filing season. Record factor sources, GWP basis, assumptions, estimation logic, exclusions, and any use of market-based instruments for Scope 2.
4. Build your intensity metric now. Do not wait until the filing window to decide how to express emissions intensity. Select a denominator that fits the business and can be reproduced each year.
5. Prepare for reviewer questions, not just submission. Your inventory should be easy to explain to finance, legal, sustainability leadership, external advisors, and assurance providers.
6. Start preparing for Scope 3 now: Scope 3 is not part of the first 2026 filing, but waiting until 2027 to build the process would be a mistake. Companies should use this period to identify material categories, define supplier-data workflows, and establish a realistic plan for value-chain emissions reporting.
7. Track CARB updates closely. The high-level direction is now clear, but companies should still watch for additional guidance, filing mechanics, and clarifications that affect how disclosures are assembled and submitted.

Companies that now treat SB 253 as a data design and reporting-readiness project will be in a much stronger position by the time the first filing arrives. The opportunity is not just to meet the deadline. It is to build an emissions reporting process that is repeatable, reviewable, and useful beyond a single disclosure cycle.

Next Steps with SINAI

Need help operationalizing these requirements? SINAI helps companies structure emissions inventories, maintain audit-ready records, and prepare disclosures that align with evolving California climate reporting expectations. Our team has been active in the SB 253 rulemaking process, and our platform is built to support repeatable, review-ready reporting across Scopes 1, 2, and 3.

With SINAI, companies can:

• Build a structured Scope 1 and Scope 2 inventory from existing operational data
• Maintain data lineage and records that support internal review and external assurance work
• Generate reporting outputs aligned to CARB-style disclosure fields
• Prepare for Scope 3 reporting with supplier-ready workflows and a scalable data model

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

👉 Explore SINAI's California Climate Compliance Playbook or book a 20-minute walkthrough to see how teams are preparing for SB 253 with structured data, documented methodology, and audit-ready reporting workflows.