The California Air Resources Board (CARB) proposed limiting companies' initial, mandatory Scope 3 (indirect value chain) emissions disclosures to five of 15 categories under the state's corporate climate reporting law. CARB presented the proposal July 22 during a public workshop on the California Corporate Greenhouse Gas Reporting Program, created under SB 253.

The five categories are purchased goods and services, fuel and energy related activities, waste generated during operations, business travel, and employee commuting. CARB said the categories already have "some of the most established data sources and mature quantification methods."  CARB did not specify mandatory reporting requirements for the remaining 10 Scope 3 categories but proposed that companies report on those categories voluntarily. Scope 3 reporting begins in 2027. 

Scope 3 emissions are harder for companies to measure than Scope 1 (direct) or Scope 2 (indirect, energy-related) because they cover indirect emissions across a company's entire value chain. They include suppliers, business travel, and employee commuting, rather than emissions from sources that the company owns or directly controls. 

Companies raised concerns about the cost and availability of data needed to quantify emissions across the remaining 10 categories. This led CARB to prioritize the five categories that it said already have established data sources and measurement methods. 

Governor Gavin Newsom (D) signed SB 253 on Oct. 7, 2023. It requires companies with more than $1 billion in annual revenue that do business in California to report Scope 1, Scope 2, and Scope 3 emissions annually. CARB approved implementing regulations in February 2026 but withdrew them from the Office of Administrative Law to revise the rules. Later, CARB delayed companies' Scope 1 and Scope 2 reporting deadlines from Aug.10, 2026 to Nov. 10, 2026.

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