CARB Workshop for California Climate Disclosure Rule (SB 253): Key Takeaways from July 21, 2026 Workshop

On July 21, 2026, the California Air Resources Board (CARB) held a public workshop providing additional clarity on the implementation of its proposed rule under SB 253, the Climate Corporate Data Accountability Act.  SB 253 requires U.S.-organized entities “doing business in California” with total annual revenues exceeding $1 billion to disclose Scope 1, 2, and 3 greenhouse gas (GHG) emissions beginning in 2027.

Earlier this year, CARB approved draft regulations—initially proposed in December 2025—establishing key definitions and reporting requirements under SB 253 and SB 261.  Although CARB submitted the regulatory package to the California Office of Administrative Law on May 20, 2026, it later withdrew the proposal to facilitate a three-month extension of SB 253’s reporting deadline to November 10, 2026, providing relief to companies preparing for compliance.

At the workshop, CARB previewed regulatory concepts for the 2027 reporting rule.  The rulemaking remains in pre-proposal stage and is subject to further changes.  A draft regulation is expected later this year, followed by a 45-day comment period before formal board consideration.

Below are six significant takeaways from the workshop.

1. Scope 3 Reporting: A Phased Approach Covering Five Categories

Acknowledging stakeholder concerns regarding cost, data availability, and methodology, CARB proposes initially requiring disclosure of only five of the fifteen GHG Protocol Scope 3 categories.  For each covered category, entities must disclose relevant activities, accounting methodologies and data types, total emissions, exclusions, the percentage of emissions calculated using primary data, and the methodology for that percentage.  The five mandatory categories—chosen for their more established data and methodologies—are:

• Purchased Goods and Services
• Fuel- and Energy-Related Activities
• Waste Generated During Operations
• Business Travel
• Employee Commuting

The remaining ten categories are voluntary for now, with no timeline given as to when they may become mandatory.

2. Reporting Deadlines Clarified

Scope 1 and 2 GHG emissions reporting for the prior fiscal year is now due November 10, 2026.  Scope 3 reporting does not begin until the 2027 reporting cycle.  If a reporting entity’s fiscal year ends between January 1 and February 1, 2026, it reports data for the fiscal year ending in 2026.  If the fiscal year ends after February 1, the entity reports data for the fiscal year ending in 2025.  The rationale: ensure entities have at least six months after fiscal year-end to prepare and submit their reports.  CARB indicated this approach may become permanent, which would extend to Scope 3 reporting once it becomes mandatory in the 2027 cycle. 

3. Limited Assurance Requirements for Scope 1 and 2

Beginning in 2027, entities must obtain limited assurance from independent third-party providers over their Scope 1 and 2 disclosures.  Assurance engagements must follow accepted standards such as ISAE (International Standard on Assurance Engagements) and ISSA (International Standard on Sustainability Assurance).  Companies should evaluate assurance readiness now—identifying qualified providers and determining the appropriate standard.

4. Insurance Companies No Longer Exempt

Earlier proposals exempted insurers to avoid duplication with California Department of Insurance (CDI) reporting.  CARB now states that CDI reporting may not fully satisfy SB 253 requirements, so insurers will be subject to emissions reporting starting in 2027.  Insurers may satisfy their obligations through a single report meeting both CDI and SB 253 requirements, or a supplemental filing addressing gaps.  Insurance industry participants should factor this change into compliance planning.

5. Interoperability with IFRS S2 and CSRD

CARB emphasized promoting interoperability with IFRS S2 (the International Sustainability Standards Board’s climate disclosure standard) and the EU Corporate Sustainability Reporting Directive (CSRD).  This is a helpful development for multinational corporations—they may leverage existing IFRS S2/CSRD reporting infrastructure and data collection processes for SB 253 compliance.  However, companies should monitor developments for California-specific nuances that may emerge in the final rules.

6. Upcoming Stakeholder Listening Sessions

CARB announced listening sessions in August and September 2026—including sector specific sessions for manufacturing, agriculture, energy, retail/tech, and banking/finance/insurance—to gather feedback on proposed SB 253 requirements and encouraged written comments during this period.  This presents an important opportunity for affected companies and industry groups to shape the final regulations—particularly those with concerns about methodologies, data availability, or timelines.

How Mintz Can Help

Mintz’s ESG practice advises companies on climate-related disclosure obligations, including SB 253 and SB 261, federal securities regulations, and international sustainability reporting frameworks.  Our team helps clients develop compliance strategies, evaluate reporting methodologies, prepare for assurance engagements, and engage in the regulatory process.  Contact a member of Mintz’s ESG team with questions about these developments or for help preparing for the November 2026 deadline.
 

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