SB 253 rises the bar for corporate emissions accountability in California and beyond. Are you ready for it?
California’s recent law, SB 253, signifies a significant global step in the fight against climate change. Signed by Governor Gavin Newsom earlier this month, the new bill requires large California companies to publicly disclose their greenhouse gas emissions, and is poised to change how companies—not just in California, but worldwide—report emissions.
First, what is SB 253?
SB 253 (the California Climate Corporate Data Accountability Act) is part of a larger movement advocating for comprehensive climate reporting by corporations. This movement aligns with initiatives such as the proposed climate disclosure rule by the SEC in the U.S., and the Corporate Sustainability Reporting Directive (CSRD) in the EU.
What are the implications?
This legislation will affect over 5,000 public and private companies in California. By compelling companies with an annual revenue above $1 billion (who do business in California) to disclose their Scope 1, 2, and 3 emissions, this law sets a new standard for transparency and accountability.
While most Gridium customers operating under single-purpose LLCs won’t meet this threshold, many tenants will. This means that data and emissions reporting has just become mission crucial for property managers in California.
What’s the timing?
Regulators are set to establish corporate reporting guidelines by January 1, 2025, as follows:
- Starting in 2026: Phase 1, including Scope 1 (associated with on-site fuel combustion in boilers, furnaces, and vehicles) and Scope 2 emissions (associated with electricity, steam, heating, or cooling usage).
- Starting in 2027: Phase 2, including Scope 3 (associated with indirect upstream and downstream emissions related to purchased goods and services, business travel, employee commutes, etc.)
Note that all emissions disclosures must be independently verified and will be publicly accessible on a new digital registry.
How can Gridium help?
Companies, including many of the commercial real estate leaders we work with, continue to face the challenge of documenting and disclosing emissions accurately. Gridium’s best-in-class energy analytics platform is designed to minimize the pain associated with compliance reporting. Through metered utility bill data, Gridium extracts real-time and historical information from utilities across the U.S., aggregating it into an easily auditable format. This audited data can seamlessly integrate into internal business reporting and third-party platforms, ensuring effortless compliance with reporting requirements.
Gridium also automatically imports emissions factors from approved sources such as the EPA, Green-e, and utility power content labels, sparing customers this data aggregation effort. We bundle this information in our output so that auditors have all of the information they need to provide assurance around carbon numbers. Finally, we support both location-based and market-based carbon accounting methodologies, so customers can get credit for things like green power purchases and REC purchases.
By compelling corporations to be accountable for their emissions, the passage of California’s SB 253 sets a powerful precedent, and we expect additional regions to follow suit. Our team can help you get the verifiable, auditable energy data you need to meet compliance —in California and beyond.
Interested in learning more about how Gridium can help you collect and report on your energy data for compliance? Contact us below.Contact Us