SB 253 and SB 261: What Applies, and When
The two climate disclosure bills California passed in 2023 reach their first real reporting phase in 2026.
SB 253 (Climate Corporate Data Accountability Act) requires companies doing business in California with annual revenue above $1 billion to disclose greenhouse gas emissions. The first Scope 1 and Scope 2 report is due in 2026, with CARB pointing to an August 10 filing deadline. Scope 3 moves to a later phase, but preparation among covered companies has already begun.
SB 261 (Climate-Related Financial Risk Disclosure) requires companies with annual revenue above $500 million to publish a TCFD-aligned climate financial risk report. The Ninth Circuit has put enforcement on hold, and the constitutional challenge is still in litigation.
The part Korean suppliers should not miss: even with SB 261 unsettled in court, SB 253 is moving ahead on schedule. CARB continues to update its guidance and FAQs, and covered companies are building data collection systems rather than waiting for a verdict. Regulatory uncertainty is not a grace period.
Why This Reaches SMEs Nowhere Near $1 Billion in Revenue
The direct filers are large companies operating in California — including the US subsidiaries of many Korean electronics, automotive, semiconductor, battery, and food manufacturers.
The consequences travel downstream. Scope 3 Category 1 (purchased goods and services) typically accounts for 60 to 80 percent of a manufacturer's total emissions. To fill that number, large filers have no choice but to request data from suppliers — and the request does not stop at tier 1. It moves down to tier 2 and tier 3.
If your company is already fielding data requests from European customers under CSRD and CBAM, you now face a double data demand: US-driven requests layered on top of EU ones, with different templates and different definitions for the same line items. Handling each request ad hoc stops being viable.
Checklist: The Data You Will Actually Be Asked For
The cost of not responding is concrete: point deductions in supplier ESG evaluations, exclusion from new sourcing decisions, and — often overlooked — being assigned an unfavorable spend-based estimate. Spend-based methods multiply transaction value by an industry-average factor, which penalizes exactly those suppliers whose processes are more efficient than average.
A Four-Step Roadmap for SMEs
Step 1 — Map which customers' Scope 3 boundaries you sit inside. Determine what share of your revenue flows to California-covered companies or their tier 1 suppliers. Reviewing your top five accounts is usually enough to set priorities.
Step 2 — Build a Scope 1 and 2 accounting routine. Establish monthly collection of fuel and electricity data. Starting in a spreadsheet is fine; depending on one employee's memory is not. Document the collection cycle, the responsible owner, and where source records are stored.
Step 3 — Pilot a product carbon footprint on one or two flagship products. Attempting the full catalog at once is where most projects stall. Start with the product carrying the largest revenue share or the one already under customer request, using ISO 14067 or the GHG Protocol Product Standard.
Step 4 — Maintain a standing response package. Keep a data sheet, calculation basis, and reduction plan bundled together, then adapt it to each customer's template. This routinely cuts response time by more than half compared with rebuilding from scratch each time.
Pairing Disclosure Work With Korean Support Programs
Treating disclosure purely as a cost guarantees it keeps getting deferred. The practical move is to bundle equipment investment and data infrastructure into a single funded initiative.
Sequence matters. Build the inventory first, identify where reduction potential sits, and the supporting evidence for a facility investment application is already in hand.
Talk to KITIM
KITIM (Korea Institute of Technology Innovation Management) supports GHG inventory development, responses to customer data request templates, product carbon footprint calculation under ISO 14067, and medium- to long-term reduction roadmaps. If you have already received a data request from a customer — or expect one soon — start with a scoping and priority assessment. We also review how to connect the work to relevant government support programs.