California is moving forward with one of the most comprehensive climate disclosure frameworks in the United States, requiring large companies to report value-chain emissions under new climate transparency laws. The regulation targets businesses generating more than $1 billion in annual revenue that operate in California, significantly expanding corporate accountability for greenhouse gas emissions.

The requirement is part of California’s Climate Corporate Data Accountability Act (SB 253) and related climate disclosure policies. Under the framework, companies will need to disclose their Scope 1 and Scope 2 emissions beginning in 2026, followed by Scope 3 emissions reporting starting in 2027, covering indirect emissions across supply chains, logistics, and product use.

The regulation is expected to impact thousands of companies worldwide that conduct business in California, including multinational corporations headquartered outside the United States. In addition to emissions disclosures, firms with over $500 million in revenue must also publish climate-related financial risk reports outlining how climate change could affect their operations and long-term strategy.

California regulators say the initiative will enhance transparency for investors, consumers, and policymakers by providing standardized emissions data across corporate supply chains. The reporting requirements will be overseen by the California Air Resources Board (CARB), with the first major emissions disclosures expected by 2026.

While businesses have raised concerns about the complexity of measuring Scope 3 emissions, supporters argue that the regulation marks a major step toward corporate climate accountability and could set a precedent for similar disclosure rules across other U.S. states and global markets.