The EU’s CSRD has been years in the making—and it’s now live. California’s SB 253 is newer, narrower, and focused primarily on emissions disclosure. But if California takes notes from Europe, there’s a good chance its approach will evolve in scope, depth, and detail. Here’s what that future might look like.
The CSRD came into force in 2023, marking a new era of sustainability reporting in Europe. At the same time, California passed SB 253—requiring emissions disclosure from large companies operating in the state. Both frameworks are built for transparency and accountability. Both set the tone for future regulations elsewhere. And both are shaping how companies think about ESG reporting at scale.
If California decides to expand its mandate over the next few years, it may draw inspiration from how Europe has approached it—with broader metrics, more granular reporting, and a deeper integration with financial performance and risk.
Let’s set the baseline.
Feature | CSRD (EU) | SB 253 (California) |
Applies to | EU companies + non-EU with EU presence | Companies with $1B+ revenue doing business in CA |
Mandatory from | 2024 (phased by company size) | 2026 |
Primary focus | ESG performance across value chain | Scope 1, 2, and 3 emissions |
Framework used | ESRS (EFRAG), based on double materiality | GHG Protocol, with third-party assurance |
Format | XBRL-tagged digital filings | Public report via website |
Assurance requirement | Mandatory limited assurance, moving toward reasonable | Limited assurance by 2026; reasonable by 2030 |
Both are serious steps toward more consistent, decision-useful sustainability data. But CSRD sets a broader precedent in terms of what’s reported—and how.
If there’s a template California regulators look toward as they iterate on SB 253, CSRD is it. Here’s why:
While SB 253 starts with emissions data, there’s room to expand toward more holistic ESG metrics in the future—especially for companies already operating in both jurisdictions.
CSRD’s double materiality framework asks two questions:
This two-way lens has already shifted the conversation in European boardrooms—from reactive compliance to proactive strategy. California doesn’t mandate double materiality today, but it could follow suit by requiring disclosures that go beyond operational carbon footprints.
The European Sustainability Reporting Standards (ESRS) include sector-specific metrics—what’s material in banking looks very different from what matters in agriculture or tech.
California could move in this direction too. Especially as emissions data becomes more comparable across industries, regulators may look for disclosures that reflect the nuance of business models and operational realities.
CSRD starts with limited assurance and signals a move toward reasonable assurance in the years ahead. California mirrors that approach in SB 253—requiring limited assurance from 2026 and upgrading to reasonable assurance by 2030.
Where Europe pulls ahead for now is data accessibility. CSRD requires XBRL digital tagging for all disclosures. That means AI tools and analysts can parse it instantly. If California wants its emissions disclosures to inform capital markets, adopting a digital-first approach may not be far behind.
Both frameworks kick in around the same time—2024–2026—but the way companies sequence and consolidate data will matter. Already, multinationals are aligning reporting calendars, consolidating assurance providers, and rationalizing ESG KPIs across jurisdictions.
As global standards converge, there’s a case for California disclosures to become more interoperable with international frameworks like ISSB’s IFRS S2 or CSRD’s ESRS. The foundations are there. It’s a matter of how far regulators choose to build on them.
Category | SB 253 (California) | CSRD (EU) |
Scope | GHG emissions (Scope 1, 2, 3) | Broad ESG (environmental, social, governance) |
Applicability | Companies >$1B revenue operating in CA | EU-based and global companies with EU presence |
Framework | GHG Protocol + independent assurance | ESRS + double materiality |
Timeline | Reporting starts 2026 | Reporting starts 2024 (phased) |
Assurance | Limited (2026), reasonable (2030) | Limited now, reasonable later |
Digital Tagging | Not yet required | XBRL required |
The next chapter in California’s climate transparency story is still being written. But if history is any guide, the state doesn’t stop at the first draft. It refines, expands, and leads.
CSRD shows what’s possible when sustainability reporting is treated not just as compliance, but as strategic infrastructure. California has the regulatory ambition, the corporate base, and the climate urgency to head in that direction. If it does, the outcome could be a globally significant ESG standard—one born in the U.S., and interoperable with the world.