Introduction

On July 21, 2026, the California Air Resources Board held a public workshop that previewed how Scope 3 emissions reporting and third-party assurance will operate under SB 253 beginning in 2027. The California Corporate Greenhouse Gas Reporting Program under SB 253 requires U.S.-based companies with total annual revenues exceeding one billion dollars that do business in California to annually disclose their Scope 1, Scope 2, and Scope 3 emissions for the prior fiscal year, with Scope 3 disclosure beginning in reports submitted from 2027 onward. For companies already reporting Scope 1 and 2 data, this workshop signals exactly what additional data collection and verification work lies ahead.

Key Takeaways

• CARB proposes limiting mandatory 2027 Scope 3 reporting to five of fifteen GHG Protocol categories, with the remaining ten optional
• Companies will need independent third-party assurance for Scope 1 and 2 emissions starting with 2027 reports
• Insurance companies may lose their current SB 253 exemption beginning in 2027
• None of the July 21 proposals have been formally adopted, and CARB did not commit to a specific release date for the formal rule
• Companies should begin mapping Scope 3 data availability now, regardless of which categories end up mandatory

What Did CARB Propose at Its July 21, 2026 Workshop on SB 253?

The July 21, 2026 session was CARB’s fifth public workshop on its rulemaking to implement California’s climate reporting laws, and the second public workshop in its pre-rulemaking process regarding GHG reporting requirements for reports due beginning in 2027, ahead of a formal rulemaking process expected later in 2026. The workshop ran from 9:30 AM to 12:30 PM and solicited feedback to help CARB implement SB 253 and SB 261, both as amended by SB 219. SB 261 is California’s companion climate risk disclosure law, requiring covered companies to report on climate-related financial risk. Nothing CARB previewed at the workshop has been adopted. These remain staff concepts, with a formal draft to follow a public comment period.

The Five Mandatory Scope 3 Categories for 2027 Reporting

CARB selected the five most commonly reported of the fifteen GHG Protocol Scope 3 categories as mandatory: Business Travel, Purchased Goods and Services, Fuel and Energy Related Activities, Employee Commute, and Waste in Operations, while allowing companies to report the remaining ten categories voluntarily. This approach reflects CARB’s regulatory concepts being grounded principally in the GHG Protocol, including its Corporate Standard, Scope 2 Guidance, and Scope 3 Standard.

Do the Five Mandatory Scope 3 Categories Capture Your Largest Emissions Sources?

Companies should not assume the mandatory five represent their most material emissions. The required five do not necessarily capture a company’s largest Scope 3 sources. Financed emissions, use of sold products, and upstream and downstream transportation and distribution sit outside the mandatory category list. Financed emissions refers to the emissions tied to a company’s loans, investments, and financial services activity rather than its own direct operations. For companies in financial services, manufacturing, or logistics, this gap means voluntary disclosure of additional categories may be necessary to present an accurate emissions picture and to prepare for future rule expansions.

Third-Party Assurance Requirements Under the Proposed 2027 Rules

Assurance emerged as a central focus of the workshop. Beginning with reports submitted in 2027, reporting entities would be required to obtain limited assurance of their disclosed Scope 1 and 2 GHG emissions, including biogenic CO2 emissions, from an independent third party. Limited assurance is a lower-intensity, less costly form of independent verification than reasonable assurance, checking that reported data is plausible rather than fully audited. Biogenic CO2 emissions are carbon dioxide released from burning organic material such as biofuels or biomass, tracked separately from fossil fuel emissions. CARB indicated in response to a question that the assurance requirement would apply to the entire submission.

Which Assurance Standard Should Your Company Choose?

CARB proposed multiple acceptable assurance frameworks rather than a single mandated standard.

The limited assurance engagement would need to be conducted in full conformance with all requirements of the applicable standard, including engagement scope, methodology, provider qualifications, evidence gathering, independence, oversight mechanism, and reporting. Companies should evaluate provider availability and engagement timing against these standards well before the 2027 reporting cycle begins.

Insurance Companies and the Shifting SB 253 Exemption

Insurance companies currently occupy a distinct position under SB 253. The initial regulation exempts insurance companies for 2026 to avoid duplicating the climate disclosures they already file with the California Department of Insurance. Following Board Resolution 26-1, staff concluded that CDI reporting would not provide equivalent GHG information going forward since it does not include Scope 3 or assurance, and now propose removing the exemption beginning in 2027. Insurers could submit their CDI report to CARB but would need to supplement it with any additional information required under SB 253. There has been debate over whether SB 253 should apply to insurance companies at all, since SB 261 expressly exempts insurance companies from reporting, while a similar exemption is not explicitly written into SB 253.

What Happens Next: Listening Sessions, Formal Proposal, and Comment Period

CARB will hold six sector-specific virtual listening sessions between August 5 and September 9, 2026. Some legal analysis of the workshop anticipates a comprehensive 2027 proposal this fall carrying a formal 45-day comment period. However, one contemporaneous account of the workshop states CARB did not specify a timeframe for release of the proposed rule. Given this discrepancy between outlets, companies should treat “this fall” as an informal industry expectation rather than a confirmed CARB commitment. Separately, CARB plans to share additional guidance materials by September 1 to support 2026 reporting, including a voluntary online intake form and platform for submitting GHG emissions and fee contact information, along with an accompanying guidance document. The initial regulation and associated rulemaking documents were previously submitted to the California Office of Administrative Law for final review and approval, but were subsequently withdrawn by CARB to allow more time to make limited changes clarifying certain requirements, with a 15-day public comment period on those changes forthcoming.

How Should Your Company Prepare for 2027 Scope 3 and Assurance Requirements Now?

Waiting for the formal rulemaking process to conclude leaves limited time to build the data infrastructure these requirements demand. Companies subject to SB 253 should begin mapping data availability across all fifteen Scope 3 categories, not only the five expected to be mandatory, since the largest emissions sources may fall outside that mandatory set. In parallel, engaging an assurance provider early and evaluating which of the five proposed standards fits existing verification relationships will reduce time pressure once formal rules are adopted.

Conclusion

CARB’s July 21 workshop makes clear that 2027 SB 253 reporting will require more than an expansion of existing Scope 1 and 2 disclosures. Companies face a phased Scope 3 category structure, a new third-party assurance obligation, and a shifting exemption landscape for insurers, all while the formal rule remains unadopted and its release date uncommitted. CSOs and finance leaders should not wait for final regulatory text to begin closing Scope 3 data gaps and evaluating assurance providers. Now is the time to initiate ESG strategy planning and deploy a carbon accounting platform capable of collecting verified Scope 1, 2, and 3 data ahead of the 2027 reporting cycle. ASUENE’s carbon accounting solution supports companies preparing for exactly this kind of phased, assurance-ready reporting requirement.

Why Work with ASUENE Inc.?

ASUENE is a key player in carbon accounting, offering a comprehensive platform that measures, reduces, and reports emissions, including Scope 1-3. ASUENE serves over 56,000 clients worldwide, providing an all-in-one solution that integrates GHG accounting, ESG supply chain management, a Carbon Credit exchange platform, and third-party verification.

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