SB 253: California Requires Businesses with Over $1 Billion in Total Annual Revenue to Disclose Greenhouse Gas Emissions
Summary
SB 253, enacted in October 2023, requires business entities that do business in California and whose total annual revenue exceeds $1 billion to disclose greenhouse gas emissions. These "reporting entities" must make these disclosures based on three groups, or scopes, of emissions. Scope 1 refers to "all direct greenhouse gas emissions that stem from sources that a reporting entity owns or directly controls, regardless of location, including, but not limited to, fuel combustion activities." Scope 2 refers to "indirect greenhouse gas emissions from consumed electricity, steam, heating, or cooling purchased or acquired by a reporting entity, regardless of location." Lastly, scope 3 refers to "indirect upstream and downstream greenhouse gas emissions, other than scope 2 emissions, from sources that the reporting entity does not own or directly control and may include, but are not limited to, purchased goods and services, business travel, employee commutes, and processing and use of sold products." Reporting entities must annually disclose scope 1 and 2 emissions starting in 2026 and scope 3 emissions starting in 2027.
This law was amended in September 2024 by SB 219 to extend the deadline for implementing regulations and alter the process for determining the starting date for scope 3 emission disclosures.
