The California Air Resources Board (CARB) has set Nov. 10, 2026, as the first-year deadline for Scope 1 and Scope 2 greenhouse gas emissions reports under California’s Climate Corporate Data Accountability Act (SB 253).
The law covers U.S.-formed business entities with more than $1 billion in total annual revenue that meet California’s “doing business” test – even if they have no California office, employees, or other physical presence. The reporting deadline and coverage criteria make SB 253 relevant to companies beyond those headquartered or operating physically in the state.
Key Points
- The first-year deadline for Scope 1 and Scope 2 emissions reports is Nov. 10, 2026. CARB extended the deadline from Aug. 10,2026. This is a one-time deadline for the first reporting year.
- Coverage depends on revenue and California sales — not necessarily physical presence.
- Non-compliance carries civil penalties of up to $500,000 per reporting year, assessed by CARB.
- CARB’s fee-notice date is Dec. 10, 2026. Covered entities must pay the fee within 60 calendar days of the invoice, whether or not they submit emissions data that year.
- SB 253 is in effect and has not been enjoined. Enforcement of the related climate-risk law, SB 261, remains paused by a Ninth Circuit injunction.
Who May Be Covered by SB 253?
SB 253, codified at California Health & Safety Code § 38532, applies to a “reporting entity” – a business entity that meets the following criteria:
- Formed under U.S. law. The entity is organized under the laws of California, another U.S. state, the District of Columbia, or an act of Congress. This may include U.S.-formed subsidiaries of entities headquartered outside the United States.
- More than $1 billion in total annual revenue. Revenue is measured globally, rather than by California revenue alone, using the lesser of the entity’s total revenue for its two most recent fiscal years.
- “Doing business in California.” CARB defines this term by reference to California Revenue and Taxation Code § 23101. An entity is doing business in California if it engages in a transaction in the state for financial or pecuniary gain and either:
– is organized or commercially domiciled in California; or
– has California sales above the applicable threshold. The source materials identify the threshold as $735,019 for 2024 and $757,070 for 2025.
CARB adopted the sales-based test but did not adopt the in-state property and payroll thresholds that also appear in the tax statute. The applicable California sales threshold is adjusted over time.
Exemptions. The rules exclude certain entities, including tax-exempt nonprofits; entities regulated by the California Department of Insurance or engaged in the insurance business in another state; government entities and companies that are more than 50% government-owned; entities whose only California activity is wholesale electricity transactions; and entities whose only California business is employee compensation or payroll, including compensation for teleworking employees.
Out-of-State and Online Businesses
Physical presence in California is not required for an entity to meet the “doing business” test. A U.S.-formed entity that exceeds the global revenue threshold may be covered based on its California sales, even if it has no California office, employees, property, or commercial domicile.
For example, an entity with California sales above the applicable threshold may meet the sales-based test even if its operations and property are outside the state. An entity with more than $1 billion in annual revenue from services provided to California customers may also meet both the revenue threshold and the California-sales test, depending on its circumstances and the other coverage criteria.
The statutory definition of a reporting entity is limited to entities formed under U.S. law. A U.S.-formed subsidiary of a foreign-headquartered company may nevertheless be covered if it meets the applicable criteria.
What Covered Entities Must Report This Year
- Covered entities must submit Scope 1 and Scope 2 emissions report by Nov. 10, 2026. Companies with fiscal years ending between Jan. 1 and Feb. 1, 2026, inclusive, report fiscal year 2026 data; all other companies report fiscal year 2025 data.
- For the first report, companies may rely on information they possessed or were already collecting as of Dec. 5, 2024. CARB has stated that it will accept 2026 submissions whether or not limited assurance has been obtained.
- A company that did not possess or collect emissions data on or before Dec. 5, 2024, may submit a statement on company letterhead explaining why it is not submitting an emissions report.
- Reports may be submitted either through CARB’s reporting intake platform, which CARB identifies as its preferred method, at ca.gov/ClimateDisclosure, or by email to climatedisclosure@arb.ca.gov.
Penalties for Noncompliance
SB 253 authorizes CARB to impose administrative penalties of up to $500,000 in a reporting year on a reporting entity that fails to comply. CARB has indicated that it will exercise enforcement discretion during the first year, recognizing that companies may need time to develop emissions data-collection systems. CARB has also stated that it expects entities to submit the information available to them. CARB has indicated it will exercise enforcement discretion for first-year filers.
Program Fees
CARB will assess covered entities an annual fee to fund program administration, regardless of whether they submit emissions data or a non-submission statement. CARB has not published a final per-entity fee. The source text estimates an annual fee of $2,000 to $7,000 per entity.
CARB’s fee-notice is Dec. 10, 2026. Payment is due within 60 calendar days of the invoice. A parent company may consolidate fee payments for subsidiaries that consolidate their reporting with the parent. CARB has indicated that late payments will be subject to penalties.
Looking Ahead Requirements Scheduled for Subsequent Years
- Scope 3 emissions reporting: CARB states that Scope 3 reporting is expected to begin in 2027 and cover 2026 emissions. Scope 3 emissions data commonly involves information from a company’s value chain, including suppliers.
- Assurance requirements: CARB states that limited assurance will apply initially to Scope 1 and Scope 2 disclosures, with a transition to a reasonable assurance by 2030. Reasonable assurance is generally comparable to the assurance standard used for financial-statement audits.
- Organizational boundaries: CARB is considering whether to use an “equity share” or “control” approach to determine which emissions a company must report. The approach could affect how emissions are classified – for example, whether emissions associated with operating leases are reported as Scope 1 or Scope 2, rather than Scope 3.
SB 261 and Litigation Status
The Ninth Circuit has temporarily enjoined enforcement of SB 261, SB 253’s companion statute. The court heard oral argument in January 2026, and as of this writing it has not issued a decision. SB 253 has not been enjoined, and the Nov. 10 reporting deadline remains in effect.
Issues for Companies to Review
The coverage test turns on factors including an entity’s place of formation, revenue, California sales, and any applicable exemption. The first-year reporting deadline, fee requirements, future Scope 3 reporting schedule, assurance requirements, and ongoing rulemaking are also relevant to understanding the law’s requirements.
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* Special thanks to Law Clerk/JD Ryan Joy for contributing to this GT Alert.