On December 5, 2024, the California Air Resources Board (CARB) published a notice of enforcement discretion under SB 253, the Climate Corporate Data Accountability Act, which requires U.S. companies that do business in California and that have total annual revenues in excess of $1 billion to report all of their Scope 1, Scope 2, and Scope 3 greenhouse gas emissions annually. CARB is mandated by the law to promulgate implementing regulations, and the initial Scope 1 and 2 emissions reports are due in 2026 on a date yet to be determined by CARB.
The notice informs covered entities that CARB will exercise its enforcement discretion to allow reporting entities to submit Scope 1 and 2 emissions reports based on information the reporting entity “already possesses or is already collecting at the time this Notice was issued.” CARB notes that reporting companies may not have time to transition to new data collection and reporting practices for the first reporting cycle. Thus, the agency will not take enforcement action for incomplete reporting during the first reporting cycle, provided that the reporting entity demonstrates a good faith effort to comply with SB 253 and retains all data relevant to emissions reporting for the prior fiscal year.
CARB does, however, warn that the December 5 notice is intended only for the transition period, and the agency encourages businesses “to use this period to move toward full compliance as quickly as possible.” CARB plans to provide details on reporting for subsequent years through its rulemaking process.