The nearest binding climate-reporting deadline anywhere in the world is not in Brussels. It is 10 November 2026, when the first Scope 1 and Scope 2 disclosures under California’s SB 253 fall due — around fourteen weeks from now. And the document that decides how hard that filing will actually be was published on 27 July, arrived as a redline, and has been read by almost nobody outside the law firms.
On that date the California Air Resources Board published its modified initial regulation implementing SB 253 and SB 261, and opened a 15-day public comment period closing 11 August 2026. Most coverage led with the deadline deferral — from 10 August to 10 November — already known since June. Further down the text sit three first-year concessions that materially change what an in-scope company has to produce this year, each the kind of provision that vanishes in a press-release summary.
First, what this document is — and isn’t
It is a modified text out for comment, not a final rule: it still has to clear the comment period and review by the Office of Administrative Law before it binds. Treat what follows as a strong signal of CARB’s intent rather than settled law — while not planning a fourth-quarter data sprint as though none of it exists.
The scope test is unchanged: companies with total annual revenue above $1 billion that do business in California. The first report covers FY2025 Scope 1 and Scope 2 emissions, due 10 November 2026.
Relief one: the 5 December 2024 data cut-off
For initial reporting only, a company may rely on information it possessed, or was already in the process of collecting, as of 5 December 2024.
Read that slowly, because it inverts the instinct most teams are acting on. The benchmark for your first California filing is not the best inventory you could assemble by November — it is the inventory your systems were already producing more than eighteen months ago. If utility data for a set of leased sites was never metered separately in 2024, CARB’s text does not require you to reconstruct it now.
The practical effect is that the sensible first-year project is narrower than most teams have scoped it. Rather than retro-instrumenting every site, the work is to establish what you genuinely held at that date, report on that basis, and document the boundary clearly enough that it survives a later question. That is a governance and evidence exercise more than a measurement one — the same discipline that applies whenever estimated data is good enough to report: state the method, state the limitation, keep the trail.
What it does not do
It is explicitly a first-year provision. It does not waive the obligation to file, and it does not carry into the 2027 cycle — by which point the expectation is a properly built inventory. Nor is it self-executing: relying on it means being able to evidence what you held and when. A company that quietly uses the relief without recording why has taken the risk without the protection.
Relief two: intercompany revenue is out of the $1 billion test
The modified text clarifies that revenue transmitted between a parent and a subsidiary, or between different parts of the same company, is not counted as revenue when applying the $1 billion threshold.
This matters more than it sounds. Groups running captive distribution entities, internal manufacturing transfers or centralised procurement can show gross figures well above the threshold that are substantially internal turnover. An entity that looked comfortably in scope may not be in scope at all once genuine third-party revenue is isolated.
If your scoping decision was made in 2025 on a quick read of group revenue, re-run it before you commit a reporting budget. Threshold questions are cheap to answer now and expensive to answer in November.
Relief three: one consolidated report for the group
The modified regulation permits a parent company to submit a consolidated report covering its in-scope subsidiaries, rather than requiring each entity to file separately. Fees are still assessed on a per-company basis, so this is an administrative simplification rather than a financial one.
The value is in coherence. One filing means one organisational boundary, one consolidation approach, one set of emission factors and one assurance conversation — instead of several subsidiary submissions that anyone can lay side by side and find inconsistent.
One caveat: the consolidated boundary you use for California should reconcile to the consolidation approach in your GHG inventory and to whatever you publish elsewhere. A boundary chosen for administrative convenience creates a discrepancy you will spend years explaining.
What the reliefs don’t touch
Scope 3 arrives in 2027 — but only five categories
CARB has signalled a phased approach for the 2027 cycle, with initial Scope 3 reporting focused on five commonly reported categories rather than all fifteen: purchased goods and services, fuel- and energy-related activities, waste generated in operations, business travel, and employee commuting, with flexibility around de minimis categories.
That is a genuine sequencing instruction, and it is unusual to be handed one. Four of the five can be built largely from data your finance and HR systems already hold. The fifth — purchased goods and services — takes a year, because it depends on spend categorisation and supplier engagement rather than a single system. That is your critical path.
Assurance is coming, on a proposed schedule
CARB’s proposals introduce limited assurance over Scope 1 and Scope 2 from qualified independent providers, recognising several standards families — AICPA, IAASB and ISO-based frameworks among them — with a move toward reasonable assurance signalled around 2030. The detail is still in play; the direction is not. If you have been through limited assurance under CSRD, you know the real cost is not the auditor’s fee. It is having evidence attached to every number.
SB 261 is still enjoined — SB 253 is not
These two laws are routinely discussed together but sit in very different positions. The Ninth Circuit enjoined enforcement of SB 261, the climate-risk reporting law for companies above $500 million in revenue, on 18 November 2025 pending appeal; oral argument was heard on 9 January 2026 and, at the time of writing, no merits decision has been published. SB 253 was not enjoined. Its deadline is live. Anyone who paused California work on the strength of “the courts blocked it” has confused the two.
Fourteen weeks: a working sequence
- Re-run the threshold test on third-party revenue only, excluding intercompany turnover, and write down the answer with its basis.
- Establish your 5 December 2024 position. What Scope 1 and Scope 2 data did you hold, or have in collection, at that date? That list defines the scope of your first report.
- Decide the filing structure — consolidated at parent level or entity by entity — and check the boundary reconciles to your existing inventory.
- Comment by 11 August if any of the three provisions is ambiguous for your structure — the last low-cost way to influence the text.
- Separate the FY2025 filing from the 2027 build. Different projects, different standards of rigour; merging them is how first-year filings become nine-month programmes.
- Start purchased goods and services now, not in 2027. It is the only one of the five categories that cannot be delivered in a quarter.
The pattern is familiar. As we argued when the SEC’s climate rollback failed to free US multinationals, federal deregulation has not reduced disclosure obligation — it has moved it to states and to Europe, where the timetables are statutory and the reliefs are technical rather than political.
If 10 November is on your calendar, the question is not how much data you can gather — it is how much you can evidence. Horizon ESG helps teams collect emissions data once, keep the audit trail attached, and report it against SB 253, CSRD and ISSB without rebuilding the inventory each time. Book a free demo.
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