SB 253 GHG Accounting and Assurance

Understanding GHG Reporting & Assurance Under SB 253

Now that we’ve covered the basics of SB 253 and SB 261, let’s take a deeper look at what’s required for greenhouse gas (GHG) reporting and the assurance process under SB 253.

What You Need to Report and When

Under SB 253, companies must begin disclosing their Scope 1 and Scope 2 emissions in 2026, using data from the 2025 reporting year (calendar or fiscal). Reporting will be done via the CARB portal.

Scope 1 Emissions – Direct emissions

These come from sources that your organization owns or controls, such as:

• Natural gas used for heating
• Fuel used in company vehicles or equipment

Scope 2 Emissions – Indirect emissions from energy

These emissions result from the energy you purchase and consume, including:

• Electricity for buildings and operations
• Power used for electric vehicles
• District heating or steam for facility use

Assurance Requirements: Limited vs. Reasonable

Before submitting your Scope 1 and 2 data, you must have it verified through limited assurance in 2026.

What is Limited Assurance?

• A lower level of assurance compared to financial audits
• The auditor provides a negative assurance statement, meaning: “We are not aware of any material misstatements.”
• It is less rigorous than reasonable assurance, which involves deeper verification and is commonly applied to financial statements

Future Changes:

• By 2030, Scope 1 and 2 disclosures must meet reasonable assurance standards
• Scope 3 will enter the assurance process in 2030, but only at the limited assurance level

What to Expect During Limited Assurance

Auditors will conduct various reviews, including:

• Data recalculations on a sample basis
• Verification of source data used in emissions calculations
• Evaluation of your:
  • Methodologies
  • Emissions factors
  • Global warming potential (GWP) selections
  • Assumptions and any data gap filling

How to Prepare: Inventory Management Plan (IMP)

To be ready for the assurance process, companies should develop a robust Inventory Management Plan, a critical documentation tool that:

• Describes how your emissions inventory was built
• Outlines your boundary decisions (i.e., which operations and assets were included)
• Details your:
  • Calculation methods
  • Emission factors and GWP sets
  • Assumptions or estimation techniques

This plan serves as the backbone for demonstrating your methodology to auditors.

Best Practice: Start Early with a Trial Run

We recommend engaging with your auditors well before your 2026 disclosure:

• Minimum two-month lead time for the full assurance process
• Many companies are doing a “dry run” in 2024 using that year’s data to:
  • Practice the assurance process
  • Identify gaps
  • Avoid surprises when formal reporting begins in 2026

Key Takeaways

• SB 253 requires Scope 1 & 2 GHG reporting for 2026, based on 2025 data
• Reports must undergo limited assurance in 2026, progressing to reasonable assurance in 2030
• Preparation involves documenting your emissions inventory clearly and engaging your auditor early
• A trial run using 2024 data can give you a major head start