Scope 3 Under SB 253: The Data You Report in 2027 Is Being Created Now
SB 253 brings Scope 3 into scope for the 2027 reporting cycle, covering the prior fiscal year. CARB has proposed requiring five of the fifteen GHG Protocol categories, including purchased goods and services, and requiring companies to publish what percentage of each category rests on primary data. Limited assurance on Scope 1 and 2 arrives the same year. The fiscal year being measured is already running.
Most coverage of SB 253 Scope 3 reporting stops at the calendar. Scope 3 starts in 2027, limited assurance starts in 2027, here are the categories. That framing hides the part that matters operationally.
An SB 253 report covers the prior fiscal year. The 2027 report will describe fiscal 2026. For most companies, that year is already underway or closing. You cannot go back and ask a supplier for primary data covering a period that has already ended, and you cannot reconstruct a defensible Category 1 figure from a purchase ledger you never mapped.
So the useful question is not when Scope 3 begins. It is what evidence your systems are capturing right now, and whether it will survive being published next to a stated data-quality percentage and, for Scope 1 and 2, an auditor's opinion.
What CARB previewed for Scope 3 in 2027
At a public workshop on 21 July 2026, CARB staff set out how the Climate Corporate Data Accountability Act would operate from 2027 onward. SB 253 applies to US-organized entities doing business in California with total annual revenues above $1 billion.
Two points frame everything else. First, nothing previewed at that workshop has been adopted. It is a regulatory concept, not a rule, and a further rulemaking will follow. Second, CARB announced it will conform its 2027 requirements to the GHG Protocol, aligning definitions and methods with the standard most companies already use, specifically to remove ambiguity costs.
CARB also confirmed the 2026 cycle is unchanged. Scope 1 and 2 emissions for the prior fiscal year are due 10 November 2026, moved from an earlier August date, with no assurance required in the first year.
How to get started: confirm which fiscal year your 2027 report will cover, then check whether your current data capture spans it.
The five mandatory Scope 3 categories, and who the phase-in actually helps
CARB acknowledged that requiring all fifteen categories at once would create cost and data problems. Staff proposed a phased approach: five categories mandatory in 2027, the remaining ten voluntary, with no timetable for adding them.
CARB selected these five for the maturity of their methods, not for their size. The consequence is worth stating plainly: the required categories do not necessarily capture a company's largest Scope 3 sources, and the phase-in distributes relief very unevenly.
A financial institution gets financed emissions deferred. A manufacturer of durable goods gets use of sold products deferred. An industrial manufacturer gets neither. It gets Category 1, typically its dominant Scope 3 source and by a wide margin its hardest, mandatory from day one, while the categories it finds easy, business travel and commuting, are the ones formally phased in alongside it.
For carbmee's customers, in other words, "phased" means almost nothing. The work is Category 1, and it is due first.
How to get started: estimate what share of your total Scope 3 sits in the five mandatory categories. For most manufacturers it will be the large majority.
Your primary-data percentage becomes a public number
For each covered category, CARB proposes that entities disclose the relevant activities, the accounting methodologies and data types used, total emissions, any exclusions, and the percentage of emissions calculated using primary data, together with the methodology behind that percentage.
Read that again with a competitor's report open beside your own. CARB is not banning estimation. Spend-based, activity-based, supplier-specific and hybrid approaches all remain acceptable. What CARB is doing is requiring you to say, publicly and category by category, how much of your number is real.
Data quality stops being an internal caveat buried in a methodology annex. It becomes a disclosed figure, comparable across peers, sitting in a public filing that customers, investors and procurement teams can read. A Category 1 figure that is 4% primary data and one that is 60% primary data will no longer look the same on the page.
Lifting that percentage is a supplier data problem, and it is not solved by sending more questionnaires. carbmee's approach is to work the two ends at once. Supplier engagement is targeted rather than broadcast, because concentration does the work: at KWS, the top 50 suppliers accounted for 55% of total Scope 3 emissions. Engaging fifty suppliers well moves the disclosed percentage far more than surveying five thousand badly, and KWS calculated 30,000 supplier carbon footprints in the process.
How to get started: calculate your current primary-data percentage for Category 1. If you cannot produce that figure today, that itself is the finding.
The 2027 report covers fiscal year 2026
Here is the timing problem in full. Reports describe the prior fiscal year. Supplier-specific data is collected during a period, not after it. If your fiscal 2026 closes in December and you begin supplier outreach in spring 2027, the primary data you gather will describe the wrong year.
That sounds like a reason to give up on a strong first Scope 3 disclosure. It is not, and the reason matters.
Primary data is not the only evidence you already hold. Your ERP, procurement and logistics systems have been recording fiscal 2026 at transaction level all along: purchase orders, line items, materials, quantities, origins, suppliers. That record exists whether or not anyone has mapped it to emissions. The constraint is not that the data is missing. It is that it sits in systems nobody has connected to a carbon model.
This is what a transactional approach is for. At Galp, roughly 40,000 items from more than 2,000 suppliers across 140 categories were analysed and a Scope 3 baseline for categories 1 and 4 was built without contacting a single supplier, because the purchasing record already described what had been bought. Supplier outreach then raises quality from a baseline that already exists, rather than being the only route to having one at all.
How to get started: map your fiscal 2026 procurement data now, while the year is still close, and treat supplier engagement as the quality upgrade rather than the foundation.
What a defensible Category 1 number requires
The 2027 cycle also brings the first assurance requirement. Limited assurance on Scope 1 and 2 begins that year, from an independent third party, against one of five accepted standards. CARB has proposed AA1000AS v3, AICPA AT-C Section 210, ISAE 3410 applied with ISAE 3000 (Revised) for engagements commencing before 15 December 2026, ISSA 5000 for engagements commencing on or after that date, and ISO 14064-3:2019. Whether Scope 3 itself requires assurance is a separate decision CARB has said it will take later.
Scope 3 will still be read by the same auditors, in the same submission, in the year they first examine your Scope 1 and 2 figures. An assurance provider asks a narrow question: show me how this number was produced and from what.
Answering it requires four things. A defined organisational and category boundary. Traceability from the reported figure back to the underlying transaction. A method a third party can follow and reproduce. And recalculation when inputs change, since CARB has also signalled recalculation requirements.
Spreadsheets do not answer that question well, which is why 56% of firms still using them for supply chain sustainability is a more urgent statistic in 2026 than it was in 2024.
carbmee EIS™ is built around Carbontology™, a semantic AI data foundation that connects ERP records, LCA databases and supplier data at transactional level. The relevant property for SB 253 is not the modelling itself but the audit trail: every calculation documents its sources and its confidence level, so a reported figure can be traced back to the line items that produced it. That is what makes a data-quality percentage defensible rather than asserted, and it is why KWS was able to publish EY-audited Scope 3 emissions for the first time.
No software makes a filing compliant, and applicability under SB 253 is a legal and tax determination for your own advisers. What software decides is whether the evidence exists when someone asks for it.
What is still uncertain about SB 253
Two open questions should shape how much you commit and to what.
The 2027 rules are not law. Everything above comes from a workshop preview and a rulemaking still to come. Categories, assurance standards and materiality thresholds can all move before adoption.
The litigation is unresolved. In Chamber of Commerce v. Sanchez, the Ninth Circuit heard oral argument on 9 January 2026 and has not ruled. SB 261 remains enjoined. SB 253 was not enjoined and continues to operate. The panel asked directly whether Scope 3 disclosure is unduly burdensome and whether it forces companies to gather data from third parties, so the requirement discussed in this article is itself part of what the court is weighing.
That argues for building the capability rather than the filing. A transactional data foundation for Category 1 serves CSRD, CBAM and customer data requests regardless of what the Ninth Circuit decides. Building a California-specific reporting process, by contrast, is a bet on a single outcome.
What to do before your fiscal year closes
Three things carry over from this. Scope 3 arrives in the 2027 cycle covering the prior fiscal year, which for most companies is the year now running. The five mandatory categories spare manufacturers almost nothing, because Category 1 is both the largest and the first. And the primary-data percentage turns data quality into a public, comparable figure rather than a footnote.
The companies that report well in 2027 will not be the ones that started in 2027. They will be the ones whose transactional data was already mapped while fiscal 2026 was still open.
Find out what your Category 1 primary-data percentage would be today, before the fiscal year closes. Talk to carbmee about a transactional Scope 3 baseline.
