SB 253: What It Means for Businesses of Every Size — Even Outside California

California has a long track record of passing legislation that reshapes national business standards. With California Senate Bill 253 (SB 253) — the Climate Corporate Data Accountability Act — the ripple effect is already underway.

At first glance, SB 253 appears to target only large corporations. It requires companies with over $1 billion in annual revenue that do business in California to publicly disclose their greenhouse gas (GHG) emissions — including Scope 1, Scope 2, and Scope 3.

But here’s the reality: this is not just a California issue.

Scope 3 Is the Real Driver

The most significant — and disruptive — component of SB 253 is Scope 3 reporting.

Scope 1 and Scope 2 emissions are relatively straightforward: direct emissions and purchased electricity. Scope 3, however, covers emissions across a company’s entire value chain — purchased goods and services, transportation, waste, business travel, product use, and more.

For most large organizations, Scope 3 accounts for 70–90% of total emissions.

That means corporations cannot comply with SB 253 without collecting emissions data from:

• Suppliers
• Vendors
• Contractors
• Software providers
• Manufacturers
• Service partners

If you sell to a California-based corporation — or to a company that sells to one — you are part of someone’s Scope 3.

And that’s where the national impact begins.

Why Companies Outside California Will Feel It

Supply chains don’t stop at state lines. A logistics company in Ohio, a SaaS provider in Texas, or a manufacturer in Indiana may all be asked to provide emissions data simply because their customer must report under SB 253.

You may not be legally required to file a report — but your customers may require data from you.

Procurement teams are already updating vendor questionnaires. Climate disclosures are becoming part of RFPs. Companies that can provide clear, credible data will have an advantage. Those that cannot may face delays, lost contracts, or increased scrutiny.

In short: You don’t have to be regulated to be affected.

Why Early Preparation Matters

1. Stay Competitive
Being able to respond confidently to emissions requests strengthens customer relationships and positions you as a forward-thinking partner.

2. Gain Operational Insight
Tracking emissions often uncovers inefficiencies in energy use, waste, and purchasing. Many companies discover cost savings alongside sustainability gains.

3. Reduce Risk
Regulatory trends rarely move backward. Early action allows you to build processes thoughtfully instead of reacting under pressure later.

The Bottom Line

SB 253 signals a structural shift in how businesses measure and disclose environmental impact. While only the largest corporations must report directly, companies of every size will feel the effects through supply chain expectations.

Preparation is no longer optional — it’s strategic.

If you’re unsure where to start, benchmarking your environmental footprint is the first step.