California weighs approaches to phase in new scope 3 GHG emissions reporting requirements

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🗞️ Driving the news: California is proposing new regulations for Scope 3 GHG emissions reporting as part of its efforts to enhance corporate climate disclosures
• The California Air Resources Board (CARB) presented three options for rolling out these reporting requirements, which will be part of the California Corporate Greenhouse Gas Reporting Program under the SB 253 regulation.
• The new rules will require large companies (with revenues greater than $1 billion) to disclose their Scope 1, 2, and 3 emissions, with Scope 3 reporting starting in 2027

🔭 The context: The proposals focus on Scope 3 emissions, which represent the vast majority of many companies' carbon footprints but are difficult to track due to their indirect nature
• The options outlined by CARB include a broad applicability requirement, a sectoral phase-in, and a category phase-in approach
• Each approach has different implications for how companies will report on their value chain emissions

🌍 Why it matters for the planet: The new regulations reflect California’s push for greater transparency and accountability in emissions reporting, especially for the hardest-to-track Scope 3 emissions that occur throughout supply chains and the use of products
• Accurate reporting of these emissions is critical for driving real change in corporate climate action

⏭️ What’s next: CARB is soliciting public feedback on these proposals until April 13, 2026
• The final regulations will shape how companies in California, and potentially across the U.S., manage their climate impacts, with Scope 3 reporting likely becoming a central focus of future corporate sustainability strategies

💬 One quote: “Reporting on Scope 3 emissions is one of the most challenging aspects of GHG disclosure regimes, but it is crucial for providing a full picture of a company’s carbon footprint.” — California Air Resources Board

📈 One stat: Estimated average annual costs for companies to comply with the new GHG reporting regulation range from $135,000 to $152,000 per entity, depending on the Scope 3 phase-in scenario

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