California gives first-year climate filers an on-ramp

The California Air Resources Board is letting the first class of companies reporting under SB 253 file with the data they have rather than demand a fully mature compliance system on the first try. In guidance covered by ESG Today, CARB confirmed the details for the 2026 cycle: companies may file prior-fiscal-year Scope 1 and 2 figures, omit data they were not collecting when the 2024 enforcement notice appeared, and submit without limited assurance, with initial reports due November 10.

The law applies to companies above $1 billion in revenue doing business in California, and its first reporting year asks only for Scope 1 and Scope 2 emissions, with Scope 3 following in subsequent years. CARB previewed the approach in its 2024 enforcement notice, where the agency acknowledged companies may need lead time to implement data collection before reporting Scope 1 and 2 fully, but the guidance has now turned that concession into an operating manual.

Companies already collecting or planning to collect Scope 1 and 2 data when the 2024 notice appeared can satisfy the first filing with prior-fiscal-year emissions figures; companies that were not are free to skip Scope 1 and 2 this cycle and instead submit a statement of non-reporting on company letterhead. The letterhead requirement is a small but important touch: CARB will hold a non-reporting list, and each company on it has put its name in the record.

The agency has also stripped away the procedural requirements that would slow a first-time filer, accepting data in existing annual reports, Scope 1 and 2 figures reported to other programs or voluntary initiatives, or CARB's Draft Scope 1 and 2 Template, while prescribing no particular emission factor dataset for 2026. Although the regulation calls for limited assurance, submissions will be accepted with or without it this cycle.

Read together, the accommodations are a quiet trade: first-year completeness in exchange for first-year participation. The 2024 notice conceded that companies had not yet built the systems to collect emissions data; this guidance tells companies what to do in the interim, without amending SB 253 or eliminating the assurance obligation the statute still contains. CARB is simply not enforcing those provisions against the first cohort.

That sequencing is the right regulatory instinct, and its cost should be priced in by anyone using the first filings. Had CARB demanded audited, current-year Scope 1 and 2 data from companies with no reason to collect it before 2024, it would have invited non-compliance or post hoc reconstructions of numbers that were never recorded; by accepting prior-year figures, familiar formats, and no-assurance submissions, the agency keeps the first disclosures attached to information that actually existed. The price is an uneven dataset: some companies will report prior-year numbers, some will file letterhead-only non-reporting statements, and most filings are likely to arrive without an assurance provider's scrutiny.

The accommodation also creates an indexing problem for later comparisons, since companies that file prior-year data in 2026 will have a baseline that predates the formal reporting regime while companies that file non-reporting statements will have no baseline at all. When Scope 3 arrives, data users will need to differentiate between companies with an established measurement history and those still finding their footing.

The relief is framed specifically around the 2026 cycle, and the structure of the law points to what comes afterward: Scope 3 reporting is scheduled to begin in subsequent years, and the requirement to obtain limited assurance remains in the regulation. Companies that omit data this year have bought roughly a year of lead time; the useful ones will spend it installing the collection systems the 2024 notice anticipated, while the others will carry the same data gap into a future cycle that also adds Scope 3. The cost of deferral compounds.

After November 10, the reporting population itself will show which companies filed data, which submitted the letterhead statement, and which already had processes in place to support prior-year figures. That record, not the relief package, is the test of whether CARB calibrated the first year correctly; the agency chose a broad reporting population with ragged first data over a narrow one with clean data. The second cycle will reveal who spent the grace period building.