What Is SB 253?

SB 253 California, or the Climate Corporate Data Accountability Act, is a California climate law passed in October 2023 that requires large companies doing business in the state to disclose their greenhouse gas (GHG) emissions annually.

This includes not just emissions from a company’s own operations, but also emissions from its supply chain and product use—collectively known as Scope 1, 2, and 3 emissions under SB 253 California.

California isn’t asking companies to “try their best” anymore. It’s mandating full-scope climate transparency—and backing that mandate with legal and financial consequences.

Who Needs to Comply with SB 253?

You must comply with SB 253 if:

• Your business earns over $1 billion in total annual revenue, and
• You do business in California (even if you’re based outside the state or the U.S.)
  

This includes public and private companies, LLCs, partnerships, and corporations across all industries—from tech and logistics to food, fashion, and finance.

If your revenue crosses the $1B threshold and you operate in California—even through a subsidiary or distribution channel—you’re likely in scope.

What Emissions Must Be Reported?

SB 253 requires disclosure of three types of emissions:

• Scope 1: Direct emissions from your owned or controlled sources (e.g., fuel combustion, company vehicles)
• Scope 2: Indirect emissions from the energy you purchase (e.g., electricity, steam, cooling)
• Scope 3: All other indirect emissions, upstream and downstream, including:
  
  • Purchased goods and services
  • Transportation and distribution
  • Employee commuting
  • Use and disposal of your products

Scope 3 is the biggest and most complex category, and it’s where most emissions usually lie.

Reporting Timeline: When Does SB 253 Start?

Until then, limited assurance applies to Scope 1 and 2 starting in 2026. Scope 3 assurance will be optional until 2030.

What Standard Does SB 253 Follow?

SB 253 uses the Greenhouse Gas Protocol as its baseline. This globally recognized standard provides consistent methods for calculating and disclosing emissions.

The law also allows for:

• Use of industry averages and proxy data for Scope 3
• Flexibility in the initial reporting years
• Future updates (post-2033) to adopt better global standards if needed
  

If your company already uses GHG Protocol to report to CDP or for voluntary disclosures, you’ll have a head start.

What Happens If You Don’t Comply?

SB 253 gives the state real enforcement power.

Penalties:

• Up to $500,000 per year for non-filing, late filing, or inaccurate reports (unless made in good faith)
• Between 2027 and 2030, penalties related to Scope 3 only apply for complete failure to file—not for errors or estimation gaps
  

Good faith matters:

Companies disclosing in good faith under SB 253 California reduce exposure to penalties, especially in early reporting years.

How Is This Different from SEC or CSRD?

If your company operates globally, you may need to harmonize multiple reporting frameworks. SB 253 adds a U.S.-based, state-level obligation that’s as rigorous—if not more than others.

Why This Law Matters

California is effectively regulating global companies through its market power.

SB 253 doesn’t just create more paperwork. It forces companies to:

• Map their full emissions footprint
• Invest in supplier data collection
• Prepare for assurance-level scrutiny
  

In return, it offers something valuable: clarity. Investors, regulators, and the public get a standardized view of corporate climate performance.

How Sprih Helps

Sprih supports enterprises at every step of SB 253 California compliance—from data collection to third-party assurance.

• Automated Scope 1, 2, 3 data collection, including integrations with logistics partners, utility systems, and ERPs
• Smart emissions calculations, aligned with GHG Protocol
• Audit-ready reporting for third-party assurance
• Supplier engagement tools to streamline Scope 3 data
• Customizable dashboards to track performance and identify hotspots
  

We’re already working with leading companies—including logistics majors and pharma giants—to help them prepare for SB 253. You don’t have to figure it out alone.