Under SB 253, companies with more than $1 billion in annual revenue that do business in California must report their greenhouse gas emissions and ultimately obtain independent third-party assurance over those disclosures. California Air Resources Board (CARB) guidance has provided substantial flexibility for the first reporting year. Limited assurance does not have to accompany companies' 2026 submissions. But the underlying statute still requires limited assurance for Scope 1 and Scope 2 emissions, and CARB has said a separate rulemaking will establish reporting requirements for 2027 and later years.
Corporate sustainability teams face an important shift as a result. In 2026, companies can focus heavily on getting emissions information reported. In 2027, they should expect someone independent of the company to start asking whether that information can be supported.
The First Reporting Year Is Unusually Forgiving
California's Climate Corporate Data Accountability Act requires covered companies to report Scope 1 and Scope 2 emissions annually, followed by Scope 3 emissions beginning in 2027. Scope 1 includes direct emissions from sources the company owns or controls. Scope 2 covers indirect emissions associated with purchased electricity, steam, heating, and cooling. Scope 3 extends much further into upstream and downstream activities, including purchased goods, transportation, business travel, and the use of products sold by the company.
CARB has intentionally provided flexibility during the first reporting cycle. Its implementation guidance says limited assurance is not required for 2026 data submissions. Companies can also use emissions information they already possess, or were collecting under CARB's earlier enforcement framework, rather than rebuilding their inventories solely for the first filing. That flexibility can create a misleading sense of security. SB 253 itself requires covered companies to obtain an assurance engagement performed by an independent third-party assurance provider. Both are subject to limited assurance before moving to the higher reasonable-assurance standard beginning in 2030, and CARB has continued moving forward with the rulemaking even as separate legal challenges to the broader disclosure package play out.
Assurance Changes What Counts as Good Emissions Data
Many companies have calculated greenhouse gas inventories for years, primarily for voluntary sustainability reports, customer requests, or internal target tracking. Third-party assurance changes that standard. An assurance provider may need to understand where the underlying data originated, how organizational boundaries were established, how emissions factors were selected, who approved estimates, and how changes to facilities or corporate structures were treated. That process can expose weaknesses difficult to see in a finished sustainability report, a gap already visible in what auditors elsewhere have found when they actually open up corporate emissions data.
Consider Scope 2 emissions, which offer a clear illustration. Electricity consumption across dozens or hundreds of facilities can drive that final number, along with utility bills, landlord-provided energy information, renewable-energy purchases, contractual instruments, and emissions factors. A sustainability team may assemble the inventory, but facilities, energy procurement, accounting, and real estate teams may hold much of the evidence needed to support it. For Scope 1, the same problem can emerge around natural gas consumption, fleets, stationary combustion, refrigerants, and other emission sources spread across operations. Assurance turns greenhouse gas reporting into an internal-controls issue, not simply a reporting exercise.
California Is Also Adding Scope 3
The timing gets more difficult because 2027 is also the statutory starting point for Scope 3 disclosure. A March 2026 CARB regulatory workshop considered options for how companies should report Scope 3 categories, including whether companies could identify categories as de minimis when they are not sufficiently relevant or when obtaining the information is impractical. The agency also proposed collecting information on organizational boundaries, emissions factors, and accounting methods. Those requirements are not yet final, but they show where the compliance burden is heading, a burden many companies' supply-chain data has not been built to withstand.
Procurement and supply-chain teams get drawn much more deeply into greenhouse gas accounting through Scope 3 reporting, since companies often need information about purchased goods, suppliers, transportation, business travel, and downstream product use. SB 253 also directs CARB during 2026 to evaluate third-party assurance requirements for Scope 3. CARB may establish an earlier Scope 3 assurance requirement by January 1, 2027, although limited assurance becomes mandatory under the statute beginning in 2030. That decision is worth watching closely.
An Auditor Is Not Necessarily the Only Option
Companies should also distinguish greenhouse gas assurance from a conventional financial statement audit. SB 253 refers to an independent third-party assurance provider, not exclusively an accounting firm. Providers must have significant experience measuring, analyzing, reporting, or attesting to greenhouse gas emissions; possess the competence necessary to perform the engagement; and remain independent of the reporting company, per the statute's own language. The agency is responsible for developing qualifications and an approval process while ensuring there is sufficient provider capacity.
That structure may create a market involving accounting firms, environmental verification specialists, and other qualified assurance organizations. It also creates a procurement question. If thousands of companies begin seeking assurance during similar reporting windows, provider availability and timing could become part of compliance planning instead of something companies arrange after the emissions inventory is complete.
The Reporting Team Is Getting Bigger
SB 253 is often described as a sustainability disclosure law. Operationally, it is becoming something broader. Facilities teams hold utility and fuel data. Procurement teams hold supplier information. Finance teams may need controls over the reporting process. IT teams may manage systems that consolidate emissions information. Legal teams must evaluate disclosure risk. Sustainability teams still have to turn all of it into a defensible greenhouse gas inventory, and independent assurance is what connects those functions.
Starting next year, companies will be reporting Scope 3 for the first time while California develops a more mature compliance framework for Scope 1 and Scope 2. The agency has said its first regulation was intentionally narrow and that additional rulemaking will establish reporting details and deadlines for 2027 and beyond. Companies do not yet have every technical requirement they will face next year, but they have enough information to know what needs to change. The next phase of California climate disclosure is not simply about calculating emissions. It is about being able to prove how those emissions were calculated.
