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On Friday, the California Air Resources Board published its proposed template for reporting on Scope 1 and 2 greenhouse gas emissions under California Health and Safety Code Section 38532, which is more commonly referred to as SB 253. This section requires US companies doing business in California with $1 billion of annual revenues to annually report on their greenhouse gas emissions. Scope 1 and 2 reporting is required starting in 2026 for fiscal 2025. In this post, we address ten of the most frequently asked questions we have been fielding on the template.
1. Why has CARB proposed the template?
The template is intended to streamline SB 253 reporting, especially for entities disclosing GHG emissions for the first time.
2. Are companies required to use the template?
Use of the template for the 2026 reporting cycle is voluntary. CARB will provide guidance on later reporting cycles as part of its regulatory process.
3. How do companies report if they do not use the template?
CARB has not yet indicated how reporting will occur.
4. What is included in the template?
The template questions are organized under the following categories:
- Organization information: Among other things, this includes entity name, headquarters address, primary industry NAICS code, Employer Identification Number (EIN) and website address. This section also asks for a contact person's name, title, phone and email.
- Third-party verification: The template asks for confirmation that all reported Scope 1 and 2 emissions have been assured at the limited assurance level and, if not, for an explanation to be provided.
The name, email, telephone and address of the assurance provider are to be provided. The template also asks for the date of verification.
- Inventory boundary: Reporting entities are to specify whether they use the equity share, financial control or operational control approach to define organizational boundaries.
If the equity share approach is specified, respondents are asked to provide a list of all obligated entities over which the reporting company has an equity share, financial control or operational control and the percentage of the equity share in each legal entity. If the reporting entity does not select the equity share approach, it is asked to provide a list of all obligated entities or facilities over which the reporting company has financial control or operational control.
Regions or specific facilities excluded from the organizational boundary are to be identified and clarification is to be provided for any excluded GHGs emissions within the current year's operations.
More specifically, the template asks for confirmation whether the following are included in the reporting boundary:
- Scope 1 – stationary combustion, mobile combustion, process emissions and fugitive emissions.
- Scope 2 – location-based purchased electricity, heating, steam and/or cooling and market-based purchased electricity, heating, steam and/or cooling.
- Direct biogenic emissions (e.g., stationary and mobile).
- Indirect biogenic emissions, such as all that are location- and market-based (electricity, heating, steam and cooling).
The template also asks whether there is separate subsidiary reporting and, if so, for details to be provided.
- Scope 1 and Scope 2 disclosure: The
template asks for the following information to be reported:
- Scope 1 – total direct emissions and total direct emissions from each of mobile combustion, process sources and fugitive sources (all in mtCO₂e), Scope 1 emission intensity per million dollars in revenue (in mtCO₂e/millions of dollars) and Scope 1 biogenic direct (combustion) emissions as total CO₂ (in mtCO₂).
- Scope 2 – total indirect emissions and total indirect emissions from each of purchased/acquired steam, heating and cooling (all in mtCO₂e) and Scope 2 emission intensity per million dollars in revenue (in mtCO₂e/millions of dollars).
The start and end date of the reporting period also are to be indicated.
- Methodology: These questions seek to solicit information on the matrices or indices used to calculate GHG emissions.
The Scope 1 emissions factor sources being used are to be selected from a drop-down menu, with an open text response for other sources not reflected in the drop-down. Scope 2 emissions factor sources also are to be entered. The years for the Scope 1 and 2 emissions factor sources are to be indicated.
This section also asks the reporting entity to indicate the source of the Global Warming Potential (GWP) factors it is using, its calculation approach (e.g., activity data × emission factor) and any process-specific calculations, including the tools or models used.
- De Minimis/Minor Sources: Sources that are excluded based on immateriality are to be listed. The quantity of emissions associated with sources excluded under the materiality threshold also is to be indicated.
- California MRR: This field is for reporting California Mandatory Reporting Regulation (MRR) facility identification numbers if applicable. The field is intended to help align reported data with other CARB regulatory databases.
- Emission Reductions: The draft template includes fields for emission reductions associated with direct contracts for renewable electricity and gas. If applicable, the total emission reductions from direct contracts for renewable electricity and gas are to be indicated (in mtCO₂).
- Optional Fields: The template includes optional fields for future reporting years as CARB further develops the SB 253 GHG emissions reporting program. CARB may consider requiring some of the fields to be completed in subsequent reporting years.
The template includes optional fields for Scope 1 and Scope 2 emissions disclosure by emission source and for disclosure by types of GHGs. It also includes fields to report base year emissions to support intra-organizational comparison.
5. Where can I find the template?
The draft template is available here.
6. How do I complete the template?
The template is formatted for Excel. It includes free text and dropdown responses. CARB has not yet indicated how or where the template information will be uploaded.
7. Does the template address Scope 3 reporting?
The current draft template does not address Scope 3 GHG emissions reporting. Scope 3 emissions reporting is required starting in 2027 for fiscal 2026. CARB will presumably publish an updated template that includes Scope 3 reporting sometime in 2026.
8. Is the template final?
The template is not final. It has been released in draft. CARB is seeking input on this draft to help it further refine the template.
Public comments can be submitted through October 27 here. Comments also can be submitted by email to climatedisclosure@arb.ca.gov.
CARB is seeking feedback on the template's structure, substance and alignment with SB 253's overarching objectives. Specific areas that CARB has highlighted for stakeholder feedback are disclosure by source versus by gas, organizational boundaries and emissions reduction initiatives.
9. Will CARB still be publishing rules under SB 253?
Yes. At its August 21 public workshop, CARB indicated that it intends to issue proposed rules on October 14. These rules are expected to, among other things, include scoping definitions (including what it means to do business in California for purposes of SB 253 and SB 261; the latter pertains to climate risk reporting), address the timing of SB 253 reporting and specify reporting fees.
According to the timeline indicated by CARB in August, the proposed rules will be open for comment from October 17 through November 30. On December 11 and 12, CARB will consider the proposed rulemaking at a public Board hearing.
10. Where can I find additional SB 253 and SB 261 compliance information
Ropes & Gray has published numerous resources on this topic. The following are some of our more recent publications:
- California Air Resources Board Publishes List of Companies That May Have Climate Reporting Obligations
- California Air Resources Board Publishes Draft SB 261 Guidance
- California Air Resources Board Addresses the Who, What, How and When of California's Corporate Climate Disclosure Laws at August 21 Workshop
- Five Takeaways from CARB's July 9 FAQs on California's New Corporate Climate Disclosure Requirements
- California Issues Important Enforcement Guidance for its New GHG Emissions Disclosure Requirements – Provides Additional Compliance Flexibility
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
