A Guide to SB-253

Everything you need to know to get started: Who must comply, what to report, deadlines, risks and how CarbonSync can help you stay ahead.

What Is SB-253?

• SB-253 (Climate Corporate Data Accountability Act) requires qualifying companies to publicly report their greenhouse-gas (GHG) emissions.

• The rule is administered by the California Air Resources Board (CARB).

• It’s a major shift: for the first time in U.S. history, a state law mandates carbon-footprint transparency for large businesses.

Who Must Comply?

Businesses that meet the following criteria:

• Has over US $1 billion in revenue, and

• "Doing business in California" (even if you aren't headquartered there).

A company is “doing business in California” if it's California sales exceed $757,070 per year or 25%+ of global sales coming from California.

What Needs To Be Reported?

Scope	What It Covers
Scope 1	Direct emissions from company-owned or controlled sources (e.g., factories, vehicles, fuel burning).
Scope 2	Indirect emissions from purchased electricity, heating, cooling which is energy a company purchases but doesn't directly burn.
Scope 3	Supply-chain and value-chain emissions includes purchased goods and services, supplier processes, transport by third parties, product use, disposal, etc. Often the largest share of total footprint and critical for net-zero.

Methodology- CARB’s draft template asks companies to follow the Greenhouse Gas Protocol (GHG Protocol) standards.

Important Deadlines

First mandatory report (Scope 1 & 2) due on August 10, 2026 covering fiscal-year 2025 emissions.

• Scope 3 reporting begins: 2027 (data from fiscal-2026).

• CARB recently released a draft reporting template to help companies start preparing.

What Happens If You Miss Filing?

SB-253 includes financial penalties, public-facing consequences, and assurance requirements. Here’s what companies need to know:

1. Financial Penalties

• Companies can be fined up to $500,000 per reporting year for non-compliance.

  • Companies may be fined for:

    • Failing to file

    • Missing deadlines

    • Submitting incomplete or inaccurate reports

    • Not obtaining required assurance (audit/verification)

2. Public Disclosure Penalties

CARB will publish all emissions data including late, missing, or non-compliant filings for public view.

This information is meant to provide a transparent view of a company's climate activities to:

• Investors

• Customers

• Media coverage

• ESG ratings

• Supplier relationships

3. Assurance (Audit) Penalties

Reports must include:

• Limited assurance for Scope 1 & 2 beginning in 2026

• Reasonable (full) assurance starting in 2030

Missing these assurance checks can trigger fines.

4. Scope 3 “Safe Harbor” Until 2030

• Companies cannot be fined for errors in Scope 3 emissions until 2030 if they make a “good-faith effort.”

• However, companies will be fined for failing to file Scope 3 or missing deadlines.

Why SB-253 Matters, And What It Signals?

It’s the first state-level law in the U.S. demanding full emissions disclosure. Other states are likely to follow.

• For large corporations, this makes carbon emissions a formal compliance metric, similar to financial reporting, and subject to financial penalties for non-compliance.

  
  

• Investors, ESG-focused funds, and customers will increasingly expect full transparency. Companies that adapt early will gain a clear competitive edge and earn long-term trust.

  
  

How CarbonSync Helps You Hit Compliance ?

CarbonSync offers a powerful platform built for design and manufacturing teams that makes tracking product-level and company-level emissions much easier, more accurate, and ready for regulatory reporting.

What CarbonSync Can Do

• Measure Full Product Carbon Footprint (Cradle to Grave)  Measure your full product carbon footprint from cradle to grave. Upload CAD files (.step), provide your bill of materials, or integrate your PLM/ERP system. CarbonSync then calculates the carbon footprint across the entire lifecycle, beginning with raw material sourcing and ending with end-of-life.

• AI-Powered Material & Process Recommendations The platform analyses your product designs and suggests lower-carbon material and manufacturing process alternatives. This helps teams understand the material drivers of their scope 3 emissions and prfioritize reduction.

• Compare Design Alternatives Easily CarbonSync lets you run “what-if” comparisons. You can model scenarios such as producing 10,000 units versus 1,000, or choosing material A instead of material B, and instantly see how those changes affect total lifecycle emissions. This is ideal for optimizing cost and carbon tradeoffs.

• Aggregate supplier emissions using primary data The software automates supplier emission collection for purchased goods and services (scope 3), process emissions and distribution calculations. 

• Generate Audit-Ready Carbon Reports CarbonSync creates structured reports that capture each data point, material selection, lifecycle assumption, and emission factor source, making them suitable for regulatory submissions and independent verification.

• Speed Up Time-to-Market and New Product Development CarbonSync integrates with existing design workflows and CAD files, so companies don’t have to slow down innovation to stay compliant, they can build sustainable practices into their product development workflows. 

• Bring it all together with Scope 1, 2 and 3 Reports - Automate report generation in multiple formats for your SB-253 reporting needs. 

Why This Matters Under SB-253 (and Beyond)

• CarbonSync helps companies generate verifiable, scope-aligned carbon emission data which is critical for SB-253 compliance, especially once Scope 3 is required.

• For companies with several SKUs or complex supply chains, CarbonSync ensures consistency and scalability: you don’t need a large sustainability team to track emissions across hundreds of SKUs.

Quick Checklist for Sustainability Leads

✔ Determine whether your company meets the > US$ 1 B & California-business criteria

✔ Confirm which business units, subsidiaries, and entities fall within the reporting boundary

✔ Align reporting methods with the GHG Protocol Corporate Standard

✔ Start prioritising collecting FY 2025 data for Scope 1 & 2 reporting

✔ Invest in product LCAs as a first step for scope 3 preparation

✔ Review internal controls for carbon data the same way you would for financial reporting

✔ Use software solutions (like CarbonSync) to simplify reporting, reduce manpower, and prioritise audit-readiness.

✔ Budget for third-party assurance (audit) beginning in 2026