The California Air Resources Board (CARB) has issued an Enforcement Notice offering guidance on the implementation of the Climate Corporate Data Accountability Act (Senate Bill 253). The legislation requires U.S.-based companies operating in California with annual revenues exceeding $1 billion to publicly disclose their greenhouse gas emissions annually. Scope 1 and 2 emissions reporting begins in 2026 for fiscal year 2025, with scope 3 emissions disclosures following in 2027.
In the Enforcement Notice, CARB outlined its plan to exercise enforcement discretion during the initial reporting cycle, recognising that many companies may need additional time to establish robust data collection systems. For the first reports due in 2026, companies will be allowed to submit scope 1 and 2 emissions data from their prior fiscal year based on information already available or being collected as of December 5, 2024, the date the Notice was issued.
To qualify for this leniency, companies must demonstrate good faith efforts to comply with the law, including retaining all relevant greenhouse gas emissions data for the prior fiscal year. CARB has assured entities that it will not take enforcement action for incomplete reporting during this initial phase, provided these conditions are met.
The Act requires CARB to finalise implementing regulations, originally due by January 1, 2025. However, this deadline has been extended to July 1, 2025, under Senate Bill 219. The delay, coupled with CARB’s enforcement discretion, aims to reduce the compliance burden during the compressed timeframe between regulation finalisation and the first reporting deadline.
CARB stated that details for subsequent reporting cycles will be provided as part of its ongoing rulemaking process. The approach is designed to support businesses transitioning to the new requirements while ensuring progress toward comprehensive emissions reporting.
The Climate Corporate Data Accountability Act is part of California’s broader strategy to enhance corporate transparency and drive action on greenhouse gas emissions reduction, with the ultimate goal of addressing climate change at the corporate level.
