“Everything You Want”: CARB Provides Updates on SB 253 Implementing Regulations

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As Vertical Horizon helped us understand in their 1999 smash hit, “Everything You Want,” you can get everything you have been asking for but still not be satisfied. I think some of us might feel that way after listening to the California Air Resources Board (“CARB”) virtual public workshop held on July 21, 2026, as we received detailed information regarding future reporting and assurance requirements, as discussed below, but it might not have been what we wanted to hear. The staff’s presentation (slides linked here) provided information on the regulations implementing Senate Bill 253 (The Climate Corporate Data Accountability Act), including an update on the regulation addressing initial SB 253 reports due in 2026 (the “Initial Regulation”) and proposed rulemaking concepts for SB 253 reports due in 2027 and beyond (the “Subsequent Regulation”). As a reminder, SB 253 requires U.S.-based companies doing business in California with over $1 billion in annual revenue to disclose their Scopes 1, 2 and 3 emissions. The details shared by CARB during the July 21^st workshop provide important details regarding what the reporting and assurance requirements will be going forward, but even if “[CARB] says all the right things, at exactly the right time, [it might] mean nothing to you and you don’t know why.” 

Update on the Initial Regulation

As a reminder, CARB approved the Initial Regulation on February 26, 2026 (our summary of this Initial Regulation is linked here), and the Initial Regulation included a fee structure for covered entities and set a deadline of August 10, 2026 for initial SB 253 reports. On June 24, 2026, CARB announced that it was withdrawing the Initial Regulation in order to make “limited changes to clarify certain requirements” and to delay the initial reporting deadline from August 10, 2026 to November 10, 2026. The revised Initial Regulation will be subject to a 15-day public comment period once it is issued and then re-submitted to the California Office of Administrative Law for approval.

During the July 21^st workshop, CARB announced that the staff will provide additional guidance by September 1, 2026, in order to support companies in producing their initial SB 253 reports, including a voluntary online intake platform, guidance document and instructional video.  CARB reminded attendees during the workshop that these initial reports are subject to CARB’s enforcement notice issued on December 5, 2024, which provided that the reports due in 2026 are only required to contain Scopes 1 and 2 emissions, and no reports are required if the company was not collecting such data or planning to collect such data as of the date of the enforcement notice.

Proposed Concepts in the Subsequent Regulation

Disclosure Requirements: CARB staff emphasized that the proposed rulemaking concepts for the Subsequent Regulation are grounded in the Greenhouse Gas Protocol (GHG-P), and the presentation distinguished which proposals were implementing GHG-P requirements versus GHG-P recommendations, as well as which proposals included language needed to provide clarity for the California regulatory context. Below is a brief summary of the Subsequent Regulation’s proposed disclosure requirements:

1. Greenhouse Gas Disclosure, Standards, and Guidance: Disclose gross emissions in each of the Scopes 1, 2, and 3 categories, expressed in metric tons of CO2e, with quantification and accounting based on the principles, requirements, and guidance provided by the GHG-P Corporate Standard, Scope 2 Guidance, and Scope 3 Standard (as defined and linked in CARB’s presentation).

• In accordance with the Scope 2 Guidance, companies must disclose Scope 2 emissions by source type, including electricity, steam, heating, and cooling, and a list of additional GHGs must be disclosed in CO2 equivalents. Scope 2 emissions must be calculated and reported using both the market-based and location-based methods. If emission factors are not available for a given region or energy source, the company must document that omission.
• CARB’s staff received feedback that reporting all fifteen Scope 3 categories beginning in 2027 might be difficult, so CARB proposed a phased-in approach to ease compliance burdens. Starting in 2027, companies must disclose Scope 3 emissions from the five most commonly reported categories: Purchased Goods and Services, Fuel and Energy Related Activities, Waste Generated During Operations, Business Travel, and Employee Commuting. CARB noted that companies may voluntarily report emissions from the other ten categories but did not provide additional detail regarding when those emissions disclosures will be required. This concept was one of the most contentious presented during the July 21^st workshop, as commenters said that companies should be able to choose their reporting categories or that there should not be a phased-in approach in the first place.
• It is worth noting that the Scope 2 Guidance originally published in 2015 is currently being updated, but CARB staff confirmed that the original version is being incorporated into the Subsequent Regulation. During the public Q&A session, CARB confirmed that the regulations will not automatically update to incorporate any future versions of the GHG-P guidance. 

2. Quantification Methodologies: Disclose the GHG quantification methods and measurement approaches used to calculate all emissions, including (i) consolidation approach for organizational boundaries, (ii) Global Warming Potential values and assessment report vintage, (iii) emission factor sources for all calculations with key attributes, and (iv) quantification method (e.g., direct measurement or calculation-based method).

3. Measurement Uncertainty: Assess the uncertainty associated with the quantification methods used to calculate emissions, including underlying data sources, assumptions, and models, and report confidence intervals with data points, where applicable. If quantitative estimation of uncertainty is not feasible or would impose an unreasonable burden or cost, provide an explanation and conduct a qualitative assessment of uncertainty.

4. Missing Data Protocols and Substitution Procedures: Identify missing data elements and document any substitute data sources or estimated methods used to quantify emissions in place of the missing data, including the basis for selecting the approach and any assumptions.

5. Biogenic Emissions: Emissions reports must include “biogenic emissions” from the combustion, consumption, or biodegradation of biomass and biomethane, but these will be reported separately from Scopes 1, 2, and 3 emissions totals. In contrast, the relevant Scopes 1, 2, and 3 emissions totals should include biogenic methane and nitrous oxide emissions and all fossil fuel and industrial GHG emissions that occur in the life cycle of biogenic products or activities other than at the point of combustion, consumption, or biodegradation (e.g., GHG emissions from processing or transporting biomass). There is flexibility in the reporting standards for biogenic emissions, but reported emissions are subject to the limited assurance requirement. 

6. Emissions Reductions or Removals: Voluntary investments, management activities, or other activities that result in emissions reductions or removals may be reported (separately from the Scopes 1, 2, and 3 emissions).

7. Data Prioritization: Prioritize primary data (data collected directly from specific activities) over secondary data (generalized industry averages and estimates), but CARB asked for feedback regarding how to implement this recommendation in order to encourage companies to apply the most scientifically sound approach for emissions quantification.

8. Data Exclusions: Companies may exclude GHG emissions sources, activities, Scope 3 categories, or other information where the omission or misstatement would not reasonably be expected to influence the decisions, assessments, or understanding of users of the disclosure regarding the company’s emissions or climate-related risks, opportunities, or impacts. Data exclusions must be assessed using specified factors, and companies must explain and disclose the basis for all data exclusions. For each category, source, facility, operation, or disclosure excluded, an estimate of the emissions magnitude, if quantifiable, must be provided.

9. Changes to Methodologies: Disclose any changes to GHG quantification or accounting methods made from the previous reporting year or during the current reporting period, and the reasons for those changes.

10. Recalculation of Previous Year Data: Corporate structure or accounting changes, such as changes to organizational boundaries, quantification methods, data sources, or emissions factors, will require recalculation of emissions if the cumulative effect of all changes would result in a change greater than 5% of total GHG emissions for the company’s first reporting year (the “base year”). If such a change occurs, all emissions for the affected previous years should be recalculated, and the updated emissions data must be included in the next annual emissions report.

11. Reporting Deadline: Disclose Scopes 1, 2, and 3 emissions for the preceding fiscal year in an annual report submitted on or before November 10^th of the reporting year. For the initial reports due in November 2026, if a company’s fiscal year ended on or before February 1, 2026, the company must report data from its fiscal year ending in 2026, and if a company’s fiscal year ended on February 2, 2026 or later, the company can report data from its fiscal year ending in 2025.  This timeline was meant to give companies at least six months after the end of their fiscal year to submit their initial SB 253 report, and CARB indicated during the July 21^st workshop that it was likely going to use the same February 1^st date to determine the applicable annual reporting period going forward.  During the public question-and-answer session, CARB noted that companies with a fiscal year after February 1^st are permitted to submit data for a more recent fiscal year.

12. Supplemental Information: Companies may disclose, in a separate section, additional information that adds context to their emissions disclosures.

Before introducing the proposed requirements listed above, CARB posed a question for discussion asking if the requirements offer adequate clarity for GHG-P aligned reporting or if additional clarification or specificity was needed. The presentation also included questions on various proposed requirements, such as asking if CARB should encourage or require the prioritization of certain measurement approaches, emissions factors, or quantification methods and asking if the proposed approach to data exclusions balanced the reporting burden with the objective of providing complete, decision-useful emissions information.

Assurance Requirement: Additionally, CARB’s presentation included details on the limited assurance requirement that will be contained in the Subsequent Regulation. Starting in 2027, companies must obtain limited assurance of their Scopes 1 and 2 emissions, including biogenic emissions, from an independent third-party provider. The limited assurance engagement must conform with one of five approved standards, and the assurance provider must issue and submit a written report that sets forth specified information. CARB staff mentioned during the workshop that they are seeking feedback regarding whether the assurance provider should be required to disclose the other services it is providing to the company or be required to rotate at certain intervals.

Exemption Update: The Initial Regulation approved by CARB in February 2026 exempted insurance companies from the SB 253 reports due in 2026, as these companies are required to submit emissions data to the California Department of Insurance (“CDI”). This proposed exemption was contentious, however, as many public commenters, as well as authoring lawmaker Senator Scott Wiener, questioned whether CARB had the statutory authority to exempt insurance companies from SB 253. 

During the February 2026 hearing, CARB instructed its staff to coordinate with the CDI to evaluate whether insurance companies should in fact be subject to SB 253’s emissions reporting requirements given the CDI’s disclosure requirements, keeping in mind CARB’s goal of minimizing duplicative reporting. CARB’s staff found that CDI reporting may not satisfy the requirements of SB 253, as CDI reporting does not include Scope 3 or assurance requirements. Beginning in 2027, insurance companies may submit the same report to satisfy both CDI and SB 253 requirements, but they must supplement their report to the extent it does not meet all of SB 253’s requirements.

Next Steps

During the July 21^st workshop, CARB announced six “listening sessions” in August and September during which various stakeholders, including companies in different industries, can provide feedback on the SB 253 implementing regulations. As mentioned above, CARB also plans to provide additional guidance by September 1, 2026, in order to support companies in producing their initial SB 253 reports, which will be due on November 10, 2026. Finally, the staff mentioned during the public Q&A session that it expects to release the draft Subsequent Regulation by the end of 2026, after which there will be a 45-day public comment period, and then the Subsequent Regulation will be submitted to the Board for approval. 

We will continue to closely monitor developments in rulemaking and guidance related to California’s climate reporting laws, as well as litigation. Both SB 253 and SB 261 (The Climate-related Financial Risk Act) remain subject to ongoing litigation, but currently only SB 261 is enjoined. In November 2025, the U.S. Court of Appeals for the Ninth Circuit temporarily enjoined CARB’s enforcement of SB 261 pending consideration of an appeal of a lower court’s denial of a motion to enjoin both laws. The Ninth Circuit heard oral arguments on January 6, 2026, but has not issued a decision. If the Ninth Circuit upholds the lower court’s decision and the injunction is lifted, it is unclear whether initial SB 261 reports would be due when the injunction is lifted and how CARB would approach enforcement related to a new deadline. At this time, however, CARB is not enforcing SB 261 and reporting is voluntary. 

For additional information about any of the above developments, or to discuss any questions that you may have, please contact a member of Maynard Nexsen’s Public Company Advisory Group.

This Client Alert is for information purposes only and should not be construed as legal advice. The information in this Client Alert is not intended to create and does not create an attorney-client relationship.