SB 253

SB 253, the Climate Corporate Data Accountability Act, is a California statute signed by Governor Gavin Newsom in October 2023 as part of a paired climate-disclosure package with SB 261. Authored by State Senator Scott Wiener, it requires U.S. companies with annual revenues above $1 billion that do business in California to report their greenhouse-gas (GHG) emissions annually to a designated emissions reporting organization, with the data made publicly accessible.

Covered entities must disclose:

• Scope 1 emissions (direct emissions from owned or controlled sources)
• Scope 2 emissions (indirect emissions from purchased electricity, steam, heating, and cooling)
• Scope 3 emissions (indirect value-chain emissions, including suppliers, business travel, and product use)

Reporting must follow the Greenhouse Gas Protocol standards and be independently assured by a third-party auditor, with assurance requirements phasing in over time. The California Air Resources Board (CARB) is charged with adopting implementing regulations. Initial Scope 1 and 2 reporting was originally targeted to begin in 2026 (covering fiscal year 2025 data), with Scope 3 following the next year, though CARB has indicated some enforcement discretion during the initial reporting cycle.

SB 253 is significant because it reaches an estimated 5,000+ large companies — including privately held firms — and goes substantially further than the U.S. Securities and Exchange Commission's federal climate disclosure rule, which was narrower and faced legal challenges. By tying disclosure to doing business in California rather than to securities registration, the law leverages the state's market size to set a de facto national standard.

The statute has faced litigation from the U.S. Chamber of Commerce and other plaintiffs arguing it violates the First Amendment and is preempted by federal law. For MUN and policy researchers, SB 253 is a leading example of subnational climate governance influencing corporate behavior beyond a jurisdiction's borders — a "California effect" in environmental regulation.