CARB’s July 2026 workshop outlined proposed SB 253 reporting, Scope 3, and third-party assurance requirements. The article explains what covered companies should do now to prepare their GHG data, controls, documentation, and assurance processes for 2027.
July 22, 2026
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By Anisa Chowdhury, CPA, CA, Managing Director, VirentAssure
On July 21, 2026, the California Air Resources Board held a public workshop outlining proposed reporting and assurance requirements under California Senate Bill 253, the Climate Corporate Data Accountability Act.
For covered companies, the message was clear: SB 253 compliance will require more than calculating greenhouse gas emissions. Organizations will need documented methodologies, reliable source data, effective controls, and sufficient evidence to support independent third-party assurance.
Although the requirements discussed remain proposed, companies should begin preparing now.
SB 253 applies to U.S.-based entities that:
Do business in California
Have more than $1 billion in annual revenue
Meet CARB’s final applicability requirements
Covered companies must report Scope 1 and Scope 2 greenhouse gas emissions beginning in 2026, followed by Scope 3 reporting beginning in 2027. Third-party assurance will also be phased in.
CARB also clarified during the workshop that covered companies would generally report their global organizational emissions, not only emissions generated in California.
Date | Proposed development |
|---|---|
September 1, 2026 | CARB guidance for the initial Scope 1 and Scope 2 reporting cycle |
November 10, 2026 | Proposed deadline for initial Scope 1 and Scope 2 reporting |
Fall 2026 | Expected staff proposal for reporting beginning in 2027 |
Reports submitted in 2027 | Proposed start of limited assurance for Scope 1 and Scope 2 |
2027 reporting cycle | Proposed start of required reporting for five Scope 3 categories |
Beginning with reports submitted in 2027, covered companies would need independent third-party limited assurance over Scope 1 and Scope 2 emissions, including separately reported biogenic carbon dioxide emissions.
A reasonable assurance engagement would also satisfy the limited assurance requirement.
Importantly, CARB staff clarified that assurance is expected to cover the full Scope 1 and Scope 2 submission, including both quantitative data and applicable qualitative disclosures.
That means assurance providers may evaluate more than the final emissions totals. Companies should also expect scrutiny over:
Organizational boundaries
Consolidation methods
Emission factors
Calculation methodologies
Data exclusions
Missing-data estimates
Measurement uncertainty
Methodology changes
Biogenic emissions
Market-based and location-based Scope 2 calculations
The practical implication is that assurance readiness must begin during the reporting process, not after the inventory is complete.
CARB has proposed accepting engagements performed under several recognized assurance standards:
AA1000AS v3
AICPA AT-C Section 210
ISAE 3410 with ISAE 3000 (Revised)
ISSA 5000
ISO 14064-3:2019, subject to additional accreditation requirements
The engagement would need to address scope, methodology, provider qualifications, evidence gathering, independence, oversight, and reporting.
Companies should therefore assess not only cost, but also whether their assurance provider has the appropriate:
GHG assurance experience
Industry knowledge
Independence
Quality management processes
Sampling and evidence methodology
Familiarity with SB 253 and the GHG Protocol
CARB is also considering whether providers should disclose other services delivered to the reporting entity and whether rotation requirements should apply.
CARB has proposed a phased approach requiring five Scope 3 categories beginning in 2027:
Purchased goods and services
Fuel- and energy-related activities
Waste generated in operations
Business travel
Employee commuting
The remaining 10 categories could be reported voluntarily under the current proposal.
Even this narrower phase-in will require significant preparation. Companies should begin identifying:
Data owners
Source systems
Supplier data availability
Calculation methodologies
Estimation assumptions
Evidence-retention requirements
Controls over manual adjustments
CARB has also proposed requiring companies to disclose the percentage of Scope 3 emissions calculated using primary supplier or value chain data.
This could make data quality and supplier engagement increasingly important.
CARB’s proposals would require disclosure of the methods used to calculate emissions, including:
Organizational boundary approach
Global warming potential values
Emission factor sources and vintages
Measurement or calculation methods
Models and process-specific tools
Data exclusions
Missing-data substitutions
Measurement uncertainty
For many companies, the greatest assurance risk may not be the final number. It may be the absence of a clear, repeatable evidence trail connecting source data to the reported disclosure.
An assurance-ready process should clearly document:
Source data → Calculation → Review → Approval → Disclosure
CARB has proposed allowing certain data exclusions when the omission would not reasonably influence users’ understanding of the company’s emissions inventory.
However, reporting entities would need to explain the basis for the exclusion and, where possible, estimate the magnitude of the excluded emissions.
CARB has also proposed a 5% threshold for recalculating prior year emissions when changes in corporate structure, accounting methods, data sources, or emission factors materially affect the base year.
Companies should therefore establish formal processes for:
Approving exclusions
Tracking acquisitions and divestitures
Documenting methodology changes
Evaluating errors
Determining whether prior-year data must be restated
CARB continues to emphasize alignment with the GHG Protocol, IFRS S2, CSRD, and other disclosure regimes.
This may allow companies to reuse portions of their existing reporting systems, methodologies, and assurance evidence.
However, an assurance engagement completed for another framework will not automatically satisfy SB 253. Companies will still need to confirm alignment with CARB’s final requirements, including:
Reporting entity and boundary
Reporting period
Scope of emissions covered
Assurance standard
Provider qualifications
Independence requirements
Assurance report format
The goal should be to reuse existing infrastructure without assuming that other reporting automatically satisfies California requirements.
Organizations preparing for SB 253 should prioritize five actions:
Confirm applicability
Document revenue, legal entities, California business activities, and reporting boundaries.
Perform an assurance-readiness assessment
Identify gaps in data, controls, methodologies, evidence, and management review.
Document the GHG inventory process
Establish clear procedures for boundaries, factors, calculations, exclusions, missing data, uncertainty, and recalculations.
Begin preparing the five proposed Scope 3 categories
Identify data owners, suppliers, source systems, and calculation approaches.
Select an independent assurance provider early
Evaluate qualifications, capacity, sector experience, standards, and independence before the market becomes constrained.
CARB’s July 2026 workshop shows that SB 253 is moving toward a structured, evidence-based reporting regime.
Companies that begin preparing now will be better positioned to reduce late-stage corrections, manage assurance costs, strengthen reporting governance, and meet future filing deadlines.
VirentAssure supports organizations preparing for SB 253 through:
SB 253 applicability assessments
GHG assurance-readiness reviews
Scope 1 and Scope 2 limited assurance
GHG data and controls assessments
Scope 3 readiness
Sustainability reporting assurance
Integration of sustainability reporting with finance, internal audit, and governance processes
To discuss SB 253 readiness or independent third-party GHG assurance, contact VirentAssure at https://virentassure.com/services/sustainability
