California has established itself as a climate disclosure leader in the U.S. by passing one of the most comprehensive climate reporting laws in the country. The Climate Corporate Data Accountability Act (CCDAA). Building on SB 253 and amended by SB 219, it requires large companies doing business in California to publicly report greenhouse gas emissions and, in some cases, climate-related financial risks.
This legislation accompanies related laws on climate-related financial risk (formerly SB 261) and voluntary carbon market disclosures (AB 1305), creating a broader climate accountability framework
What Is the CCDAA/SB 253?
The Climate Corporate Data Accountability Act (CCDAA), originally enacted as SB 253 and amended by SB 219, requires covered companies to publicly disclose greenhouse gas emissions data, including direct, indirect, and value-chain emissions -according to standardised frameworks such as the GHG Protocol.
This represents a first-of-its-kind mandatory climate disclosure regime at the U.S. state level and marks a significant shift toward regulated corporate sustainability reporting in the United States.
Who Does It Affect?
Under the CCDAA, companies must meet both of the following criteria to be required to report emissions:
Emissions Reporting Threshold
Annual global revenues exceeding $1,000,000,000 (USD) applies to reporting entities
Doing Business in California
The company must do business in California. CARB is developing definitions for this term, typically aligned with California Revenue & Tax Code § 23101 criteria.
See this guidance for the most up ro date thresholds for ‘doing business’
These thresholds are measured on the basis of the entity’s previous fiscal year’s revenue.
Reporting Requirements
Covered companies must disclose greenhouse gas (GHG) emissions across the following categories:
Scope 1: Direct emissions from owned or controlled sources.
Scope 2: Indirect emissions from purchased electricity, heat, steam, etc.
Scope 3: Other indirect emissions from upstream and downstream activities (e.g., suppliers, use of sold products).
These emissions must be reported in a public disclosure format using recognised standards (like the GHG Protocol).
Updated Timelines & Implementation Phases
The reporting schedules below are based on the current statutory framework and CARB’s proposed rule-making timelines:
2026
First reporting year for Scope 1 & Scope 2 emissions (for the prior fiscal year).
CARB’s initial compliance date has been proposed for August 10, 2026.
Limited assurance requirements begin for Scope 1 and Scope 2 data (independent third-party review).
2027
Scope 3 emissions reporting begins (covering prior fiscal year data). No assurance requirement initially.
2030
Enhanced assurance requirements (e.g., reasonable assurance) for Scope 1 and Scope 2 emissions. Potential phased assurance for Scope 3.
Third-Party Verification
To ensure consistency and credibility, companies must subject their emissions data to third-party verification:
Limited assurance is required in initial years.
Assurance requirements scale over time, with reasonable assurance expected in later years.
Public Disclosure & Use of Data
All emissions disclosures will be publicly available, allowing investors, consumers, and policymakers to make informed decisions based on consistent and standardised GHG data.
This transparency is designed to:
Provide a comprehensive view of company carbon footprints.
Support evaluation of climate strategies.
Drive sustainability improvements and accountability.
Files and penalties for non-compliance:
Under SB 253, the law authorises administrative penalties of up to $500,000 per reporting year for violations (e.g., misstatement, late filing, failure to report, failure to get assurance) by a reporting entity.
Why This Matters
Benchmarking climate performance: Standardised data enables comparisons across companies and sectors.
Investor decision-making: Transparent reporting supports risk assessment and capital allocation.
Regulatory alignment: Aligns with global movements toward mandatory climate disclosures (e.g., EU CSRD).
Corporate accountability: Raises the bar for environmental stewardship and climate risk management.
How Does KEY ESG Help?
KEY ESG supports companies in navigating the California Climate Act (SB 253 / CCDAA) by translating complex regulatory requirements into a clear, structured, and auditable reporting process.
Pre-configured SB 253 / CCDAA framework
KEY ESG has the California Climate Act available as a pre-configured reporting framework, aligned with CARB’s requirements and the GHG Protocol. This removes the need for companies to interpret legislation from scratch and ensures consistency with regulatory expectations.
Streamlined data collection across Scopes 1, 2, and 3
The platform enables simple and structured data collection across all required emission scopes, including value-chain (Scope 3) data. Standardised templates help ensure completeness while reducing manual effort and errors.
Audit-ready and assurance-focused
Data captured within KEY ESG is structured to support third-party verification and assurance, helping companies prepare for limited assurance requirements in the early years and more stringent assurance over time.
Scalable for phased implementation
As SB 253 requirements are rolled out in phases, KEY ESG allows companies to start with Scope 1 and 2 reporting and seamlessly expand to Scope 3, without changing systems or processes.
Centralised, transparent reporting
All climate data is stored in one centralised system, creating a single source of truth that supports regulatory reporting, internal decision-making, and external disclosures.
By embedding SB 253 requirements directly into the platform, KEY ESG helps companies reduce compliance risk, save time, and focus on meaningful climate action, rather than regulatory complexity.