With reporting for this year’s SB 253 CARB submittal in the final stretch, our team is already looking ahead to the 2027 reporting requirements. In 2026, CARB gave reporters a significant amount of flexibility in how they report their emissions but in 2027, that will change significantly. Verification will shift from optional to required, Scope 3 emissions will be included in reporting, and the number of data points included in the 2027 submissions will expand greatly.

In the face of these significant changes, many companies are asking whether their teams are ready for the expanded reporting. Have no fear! This article is designed as a roadmap to help ensure your disclosure is verification-ready, with the intent to avoid any last minute scrambling.

Use the steps below to pressure-test your reporting process before verification begins.

Step 1: Engage Your GHG Emissions Verifier Early

The first step is to engage your auditor as early as possible. If you don’t have a verifier for 2027 reporting, now is the time to reach out. Verifier calendars can fill up to a year in advance, so make sure to give them plenty of lead time. You can find our contact information at the bottom of the page.

Once you have your verifier, continue to work with them as you design procedures, collect data, and prepare reports. While verifiers are strictly prohibited from creating procedures or consulting on the preparation process, early communication can help prevent last-minute surprises and significant, costly rework. Verification is not intended to be adversarial; it is a structured process with appropriate restrictions to preserve independence.

Step 2: Assess Your GHG Emissions Data Quality

When designing your process to collect and distill data, it is vital to consider the quality of the sources you are using. Not all data is equal. In general, the hierarchy of emissions source data is as follows:

1. Direct measurements/meter data
2. Utility invoices and supplier records
3. Site-specific calculations
4. Verified regional datasets
5. Industry-average or published secondary datasets
6. Estimates and proxies

It’s important to note that the farther down the list you go, the less agency you have to reduce your reported emissions in future years. For example, if you rely on regional averages to calculate your emissions from electricity, changing utility providers won’t reduce your reported emissions. By putting in the work early to improve the quality of your underlying data, you save yourself time and heartache in future years.

Step 3: Establish an Organized GHG Reporting Process

It’s important to recognize emissions reporting as a year-long process, not something that only happens in the three months leading up to reporting. Too often, we see clients scrambling to compile data from nearly a full year ago, resulting in delays, poor data quality, and unnecessary stress.

Clients who succeed in verification compile data on a year-round basis and make sure the underlying support is clearly labeled and collected in a centralized system. Data owners participate in periodic check-ins throughout the year, and issues are identified and addressed during the reporting year, not afterward when the disclosure is being compiled.

Buy-in across all functions of the business is essential, from compliance and accounting to procurement and operations. Have conversations with those teams early in the process and align on data collection protocols to ensure you have all the resources you need at your disposal.

Step 4: Review Your GHG Emissions Inventory Before Verification

This is one of the most vital steps in an inventory calculation process, and it’s one that some clients mistakenly skip altogether.

Verification is not designed to be a company’s procedure for having an independent verifier catch errors. Outsourcing your internal review to your verifier creates unnecessary risk and can increase the time and cost of the verification process.

Instead, make sure to have clear policies in place and a timeline that allows an individual separate from the preparer to review the calculations in their entirety. Reviewers should select sections of the calculation to reperform and confirm whether they achieve the same results. In addition, there should be internal controls and reconciliations designed to catch errors related to the accuracy and completeness of the data being relied upon. Every error caught before verification can save all parties time and money by reducing last-minute rework and additional audit selections.

If you are unsure where your process stands, start by identifying the areas where your team has the least documented support, the most manual handoffs, or the greatest dependence on estimates. Focus further on the areas are material to your total disclosed emissions. Those are the places where early preparation can have the greatest impact.

Each company is unique and faces its own set of challenges and opportunities, but the roadmap described should be general enough and applicable for any company to follow. We cannot emphasize enough the importance of starting these conversations early especially with expanded GHG reporting set for 2027. Don’t hesitate to reach out to us if you have any questions about our audit process.

Insights from the 2026 EPR Think Tank West Coast

Packaging EPR is becoming an operating requirement across a growing number of states.

While packaging has long been regulated in sectors such as food and pharmaceuticals, a broader range of industries must now manage packaging as part of their regulatory scope. EPR changes that equation by making packaging data part of the producer’s compliance and financial responsibilities. Packaging decisions now affect reporting obligations, producer fees, source reduction requirements, and ultimately product economics. As a result, packaging is increasingly becoming both an operational asset as well as a compliance mechanism.

That was one of the clearest messages from the 2026 EPR Think Tank West Coast in San Francisco. Seven states have now enacted packaging EPR programs, including California, Colorado, Oregon, Minnesota, Maine, Maryland, and Washington. While the programs share a common premise, requiring producers to take greater financial and operational responsibility for packaging at end of life, the details differ significantly by state.

For companies selling products across multiple jurisdictions, the challenge is therefore bigger than complying with another environmental regulation. EPR is becoming a cross-functional business process touching packaging design, procurement, supply-chain data, finance, legal, sustainability, IT, sales, and product strategy. Companies must also determine how they will manage compliance risk as requirements vary by state.

The companies best positioned for this shift will be those that stop treating EPR as an annual reporting exercise and start building the governance and data systems needed to manage it continuously.

One EPR concept, multiple state systems

There is growing alignment across state programs, particularly around the use of producer responsibility organizations (PROs), packaging reporting, and material categories. But harmonization has limits.

Producer definitions, exemptions, covered materials, treatment of business-to-business packaging, fee structures, source-reduction requirements, recyclability standards, and enforcement mechanisms can all vary. Regulators are working together to align implementation where possible, but they remain bound by their individual state statutes.

The internal system can be harmonized even when the laws are not.

Rather than creating a separate compliance process for every state, companies can build one controlled source of truth for the packaging inventory, then translate that information into the specific requirements of each jurisdiction. However, some qualitative details like brand ownership, manufacturing, importing, distribution arrangements, private-label relationships, and even where a company sits in the supply chain can influence compliance obligations. Therefore, it is paramount that companies achieve internal agreement on these discussion points where a database might not necessarily provide all the answers.

This analysis also cannot be static and must evolve over time. Changes to products, suppliers, ownership structures, sales channels, regulations, or contracts can change the answer and processes must be put in place to account for the dynamic nature of packaging and customer demands.

Packaging data is becoming compliance infrastructure

Many of the first EPR reporting cycles exposed an uncomfortable reality: the current paradigm of packaging sales data does not meet the technical rigor for EPR compliance.

In trying to comply with EPR requirements, companies described difficulties such as information distributed across multiple vendor systems, outdated product drawings, supplier records, spreadsheets, incomplete bills of materials, and product teams that may make packaging decisions without considering future reporting requirements.

That matters because EPR reporting increasingly requires companies to understand much more than the total weight of packaging sold.

Depending on the program, companies may need to know:

• packaging component and material type
• individual component weights
• primary, secondary, tertiary, case-pack, and inner-pack packaging
• sales and distribution by state
• producer and brand-owner relationships
• applicable exemptions
• recyclability characteristics
• recycled content
• supplier assumptions and calculation methodologies
• historical packaging configurations used for baselines

The goal should therefore be to develop a packaging inventory master dataset, not assemble a new spreadsheet from various sources for each reporting cycle.

The data also needs controls. Supplier information should be checked where risk is highest, particularly for high-volume products, high-fee materials, unusual weights, multi-component or substrate complexity, or assumptions applied broadly across many SKUs.

A useful test is whether the company can clearly explain how the report was prepared, including the source records, data treatments, assumptions, calculations, and review controls.

Because EPR audit and substantiation expectations are still developing, no single test establishes that a reporting process is defensible. However, maintaining clear documentation and controls can help a company explain its methodology, evaluate data quality, and support the information it submits as regulator and PRO expectations evolve.

Governance may be one of the most important EPR controls

Managing EPR requires coordination across the business:

• regulatory and sustainability teams interpret requirements
• procurement and suppliers provide packaging information
• IT retrieves data
• packaging and R&D influence design
• finance evaluates fees
• sales data supports state allocations
• legal assesses producer responsibility and contractual obligations

Without clear ownership, gaps appear between these functions.

One of the strongest themes across the conference was therefore governance. Companies were encouraged to establish an executive sponsor, a designated EPR program owner and backup, defined data owners, review and approval responsibilities, escalation procedures, and a shared compliance calendar.

This is not administrative housekeeping. It is a risk-control mechanism.

Good governance creates evidence that a company has established a reasonable process to understand its obligations, review assumptions, correct errors, respond to notices, and maintain compliance as requirements change.

It also reduces reliance on individual institutional knowledge. If the person who prepared last year’s report leaves, the methodology should remain.

EPR costs are becoming packaging-design signals

EPR fees are also beginning to change the economics of packaging.

Initial fees may largely reflect material type and weight, but eco-modulation can increasingly reward or penalize attributes such as recyclability, recycled content, source reduction, package design, or recovery performance.

That means EPR should not sit only in a sustainability or regulatory budget.

Companies should begin modeling potential fees at the SKU or material level and connect those scenarios with procurement, pricing, product margins, packaging redesign, and capital planning.

Waiting for every final fee schedule may be tempting, but implementing packaging changes can take years. Product testing, manufacturing changes, supplier qualification, artwork revisions, and equipment investments all create long lead times.

Several discussions therefore focused on no-regret actions that companies can evaluate now, including eliminating unnecessary packaging, lightweighting, simplifying difficult material combinations, improving packaging specifications, and testing redesign alternatives.

The objective is not to redesign everything immediately. It is to understand where regulatory exposure and packaging economics are beginning to converge.

“Recyclable” increasingly means the whole system works

Another important shift is the definition of recyclability itself.

A material may be technically capable of being recycled and still fail in practice if consumers cannot access collection, facilities cannot sort it, contamination prevents processing, or no viable end market exists.

California’s SB 343, although its enforcement is currently blocked by a federal preliminary injunction, illustrates the broader policy direction of packaging recyclability and having supporting documentation for those claims rather than simply relying on technical recyclability alone.

The broader EPR infrastructure discussions reached the same conclusion.

EPR can provide stable financing for collection, processing, alternative collection systems, and infrastructure upgrades. It can help expand access and potentially create new pathways for difficult materials such as films and flexible packaging.

But regulation alone does not make a material circular.

There still needs to be a functioning chain from design to collection, processing, responsible end markets, and ultimately demand for the recovered material.

For companies considering packaging changes, this systems perspective is important. Replacing one material with another simply because it appears easier to classify as recyclable can create unintended lifecycle, climate, or customer demand tradeoffs. Packaging decisions should consider material use, functionality, greenhouse gas impacts, end-of-life performance, infrastructure availability, and market demand together.

Litigation is important, but it is not a compliance strategy

EPR laws are also being challenged in multiple jurisdictions.

Legal challenges are developing across several state packaging programs, and their outcomes could affect implementation. Companies should monitor those cases closely, but litigation should not replace compliance planning. An injunction or pending case may affect a particular requirement, enforcement mechanism, or group of regulated entities without eliminating the broader need to prepare. Companies should therefore understand exactly what a court decision changes before adjusting their compliance strategy.

Companies should stay engaged in rulemaking and implementation. Regulators repeatedly indicated that producer input can be valuable when a requirement does not reflect the technical reality of a product, packaging format, or supply chain. A detailed technical case study supported by evidence is generally more useful than simply commenting that compliance is difficult.

The next phase of EPR is operational

The most significant takeaway from the conference was not a particular deadline, fee, court case, or material classification.

It was that EPR is becoming an enterprise management discipline.

For many companies, the immediate priorities are to:

1. Determine producer responsibility by state and product.
2. Create a controlled packaging and sales dataset that can serve multiple jurisdictions.
3. Document methodologies, assumptions, exemptions, and supporting evidence.
4. Establish executive oversight and clear cross-functional responsibilities.
5. Review supplier and customer agreements for EPR responsibilities, data obligations, fees, and liability.
6. Model potential EPR costs, budget for them accordingly, and connect them to packaging and business decisions.
7. Monitor regulations, PRO guidance, litigation, and enforcement throughout the year rather than only near filing deadlines.

The strongest EPR programs will not be those that predict every regulatory change correctly. They will be the ones capable of absorbing change without losing control of their data, decisions, deadlines, or accountability.

Climate resilience requires more than identifying and disclosing risk. It requires connecting climate information to decisions about facilities, infrastructure, water, supply chains, capital investment, and long-term strategy.

It’s this connection between climate insight and real-world decision-making that GSI explores in the latest Climate Change Business Journal Adaptation & Resilience issue from Environmental Business International, Inc.

In the article, “GSI Environmental Connects Sustainability Strategy With Applied Environmental Science and Engineering,” Principal Scientist Becky Twohey, PhD, discusses how climate consulting is evolving from a primarily disclosure-focused exercise into multidisciplinary business decision support.

The interview explores:

• How climate scenario analysis can inform siting, design, and capital allocation
  • Why engineers, hydrologists, geologists, operators, and finance teams are essential to credible climate planning
  • How enterprise risk management can help move organizations from analysis to implementation
  • Why climate data fitness, governance, and transparency matter as much as data availability
  • How companies can use uncertainty to preserve flexibility and strengthen long-term competitiveness

GSI’s Sustainability and Climate group combines strategic climate expertise with applied environmental science and engineering to help clients move from identifying risks to making practical, defensible decisions.

Read the feature: https://www.gsienv.com/gsi-environmental-connects-sustainability-strategy-with-applied-environmental-science-and-engineering/

CCBJ Volume XIX, Numbers 7-8-9: Third Quarter 2026, Adaptation & Resilience 2026

What Is Due Under SB 253 on November 10, 2026?

Scope 1 and Scope 2 emissions reports under California’s Climate Corporate Data Accountability Act (SB 253) are due November 10, 2026. CARB has now issued the guidance, filing options, and intake tools companies need to determine whether they must report and how to submit for the first reporting cycle.

Below is a brief outline of everything preparers need to know in order to meet upcoming compliance deadlines, including CARB’s most significant update on September 1 containing the resources companies need to file for 2026.

Who Must Report Under California SB 253 in 2026?

Companies are in scope for California’s corporate GHG reporting requirements if they meet all three criteria below:

• The entity must be U.S.-based (formed under the laws of California, another state, the District of Columbia, or an act of Congress).
• It must have total annual revenue above $1 billion, with “revenue” using the same definition as gross receipts in California Revenue & Taxation Code § 25120(f)(2) and applicability measured against the lesser of the entity’s two prior complete fiscal years.
• It must be doing business in California under existing tax law (defined as California sales of at least $735,019 or 25% of total sales)

Each test is applied entity by entity, though parent companies may file consolidated reports covering in-scope subsidiaries (fees are still assessed individually).

Five categories of business are considered exempt: (1) tax-exempt non-profits; (2) entities regulated by the California Department of Insurance or in the insurance business in any other state; (3) government entities and companies majority-owned (more than 50%) by them; (4) entities whose only California activity is wholesale electricity transactions; and (5) entities whose only California business is employee compensation or payroll expenses, including teleworking employees.

Note that the insurance exclusion at this time applies to the 2026 cycle only. As of July 21, CARB has determined that the existing Department of Insurance reporting does not satisfy SB 253 and has proposed removing the reporting exemption beginning in 2027. For now, insurers should assume they will need to report.

Do All Companies in Scope Have to Submit GHG Emissions Data in 2026?

Being in scope does not necessarily mean submitting emissions this year. Under CARB’s December 5, 2024 Enforcement Notice, first-year reporters may submit Scope 1 and Scope 2 emissions based only on information they already possessed or were already collecting as of December 5, 2024, with or without assurance. Entities that were neither collecting that data nor planning to collect it as of December 5, 2024, are not expected to submit emissions data at all for the 2026 cycle.

Not collecting data does not exempt an entity from filing with CARB. Companies in that position must provide a short statement on company letterhead confirming that they were not collecting, and did not plan to collect, Scope 1 and Scope 2 data when the Notice was issued.

This statement can be filed through the intake platform or emailed to CARB before November 10, 2026.

How Do Companies Submit SB 253 Reports to CARB in 2026?

On September 1, CARB released its most directive guidance to date regarding how preparers should submit their filing to CARB for 2026. As part of that release, the Report Intake Platform was made public, which entities can use to provide fee-billing contact information, upload emissions, or file a non-reporting statement. Note that submittals may also be emailed directly to climatedisclosure@arb.ca.gov.

Four formats are acceptable this year: an existing annual report that already includes Scope 1 and Scope 2 emissions, data already reported to another regulatory program or voluntary initiative, CARB’s Draft Scope 1 & 2 GHG Reporting Template (posted October 10, 2025 and voluntary this cycle), or the letterhead statement of non-reporting described above.

CARB clarified that no specific emission factor dataset is required for 2026: because U.S. EPA has not released eGRID 2024 on its usual timeline, CARB will accept eGRID 2023, the eGRID 2024 dataset published by the Cornerstone Sustainability Data Initiative, or another credible source, so long as the factors and their sources are identified.

Additionally, CARB will accept submittals regardless of whether limited assurance was obtained.

What Will Change for California SB 253 Reporting in 2027?

The 2026 guidance applies only to the first cycle. Everything after is being built through a separate rulemaking, previewed at CARB’s July 21, 2026 workshop, with a draft regulation expected later this year. That being said, CARB has provided stakeholders an idea of what to expect for the upcoming year.

In addition to Scope 1 and 2 emissions reporting, CARB has proposed requiring the five most commonly reported Scope 3 categories beginning in 2027: purchased goods and services, fuel- and energy-related activities, waste generated in operations, business travel, and employee commuting (Categories 1, 3, 5, 6, and 7, respectively). The other 10 would remain voluntary.

Limited assurance is expected to shift from voluntary to mandatory, with reports submitted in 2027 requiring third-party assurance of Scope 1 and Scope 2 emissions under an approved standard.

Beyond that, expect a recurring November 10 deadline, close alignment with the GHG Protocol Corporate Standard, Scope 2 Guidance, and Scope 3 Standard, deliberate interoperability with IFRS S2 and the EU CSRD, and Scope 2 disclosure under both market-based and location-based methods.

As mentioned above, insurance companies are expected to come back into scope starting next year, with CARB proposing that they satisfy both CARB and Department of Insurance requirements through a single report, supplemented as needed to cover Scope 3 and assurance.

Note that all of these updates are contingent on a favorable outcome on the existing Ninth Circuit litigation that is continuing in the background. Until the courts rule otherwise, SB 253 is still in effect, and companies should plan on reporting.

How GSI Environmental Supports SB 253 and California GHG Reporting Compliance

GSI Environmental can support clients at each stage of the reporting process, from determining applicability and organizing emissions data to preparing disclosures and planning for assurance. Our multidisciplinary team of engineers, scientists, accountants, and MBAs includes CARB-accredited Lead GHG Verifiers serving clients across real estate, retail, manufacturing, energy, healthcare, technology, and the public sector.

Among many services, our team is equipped to calculate Scope 1, 2, and 3 inventories, develop Inventory Management Plans, and provide limited assurance and verification ahead of the 2027 requirement.

We also support Scope 3 readiness and supply-chain engagement, SB 261 climate risk reporting and scenario analysis, CSRD and CDP disclosure, and decarbonization planning.

California SB 253 and CARB GHG Reporting Resources

For further information about the status of California’s GHG Reporting Program, make sure to explore CARB’s resources page.

Missed our recent Sustainability & Climate webinar, “How to Get Ahead of CA SB 253 GHG Verification?” You can now watch the full recording on GSI’s YouTube channel.

In this session, Albert Chung, PhD, PE, and Brady Koetting, CPA, discuss what companies should know as SB 253 moves from reporting preparation toward verification, assurance, and audit-ready emissions data.

The webinar covers the current state of SB 253, what to expect from the verification process, common assurance questions, supporting documentation, materiality, internal controls, site visits, and steps organizations can take now to identify gaps before assurance begins.

Please note that regulatory guidance has continued to evolve since this webinar was recorded. Since the webinar, the California Air Resources Board (CARB) announced a proposed update that would defer the initial Scope 1 and Scope 2 greenhouse gas reporting deadline from August 10, 2026, to November 10, 2026. This proposed three-month extension is intended to provide additional clarity following final approval of the regulation. The general guidance shared in this webinar on how companies can prepare remains applicable, including the importance of organizing data, confirming reporting boundaries, engaging internal stakeholders, and preparing for verification.

Watch the recording here: https://youtu.be/Wz8AVNrWd_8

Keep an eye out for more upcoming webinars from GSI as we continue sharing insights on sustainability, climate disclosure, regulatory changes, and environmental strategy.