Guest post by: Rachel Delacour, Founder and CEO of Sweep
Here’s the question your CFO should be asking right now:
It’s not “are we compliant?” It’s “can our carbon data survive an audit?”
For years, sustainability reporting has sat comfortably within ESG teams, managed through annual reporting cycles and disconnected spreadsheets, and far from the scrutiny applied to financial statements.
California’s SB 253 just changed that equation. This is the moment carbon data moves into the same governance framework as your financials, and it will reshape how every serious US business manages its emissions data, whether they operate in California or not.
What does California’s SB 253 actually mean for businesses?
The law requires companies generating more than $1 billion in annual revenue and doing business in California to publicly disclose Scope 1, 2 and 3 greenhouse gas emissions, with independent third-party assurance attached to those disclosures. Reporting for Scope 1 and 2 emissions is set to begin in August 2026, followed by Scope 3 at the start of 2027.
While California is leading, New York and Colorado are already moving in the same direction. SB 253 is a signal of where the entire US market is heading, and the companies best positioned won’t be those who scrambled at the deadline.
Why this is fundamentally a data infrastructure problem
The hardest part of SB 253 isn’t the reporting. It’s getting your data in shape to survive scrutiny. The biggest of these data challenges is capturing Scope 3 emissions, which include indirect emissions generated across supply chains, logistics networks, business travel, product use and procurement activities.
These indirect emissions routinely account for 70 to 90 percent of a total corporate footprint, yet only about 30 percent of organizations currently have full visibility into their supply chains. Unlike Scope 1 and 2, it isn’t your data to begin with. It’s spread across suppliers, freight carriers and other third parties.
Many organizations still manage nonfinancial data through spreadsheets that are updated sporadically throughout the year. That may have worked when sustainability reporting was largely voluntary, but it won’t work now that emissions disclosures are publicly accessible and subject to independent assurance.
I’ve watched this shift play out up close. The CFOs I work with at companies like L’Oréal, Thales and Orange are no longer asking “are we compliant?” They’re asking “can this data be defended?” That shift in framing changes everything about how a company builds its sustainability infrastructure. It moves the conversation out of the sustainability team and into core finance and operations, where it now belongs.
Here’s what the compliance-only framing consistently misses: companies with strong nonfinancial data infrastructure make better decisions.
When you can see supplier emissions in real time, you can spot supply chain concentration risk before it becomes a procurement crisis. When you have auditable energy and carbon data consolidated across business units, you can identify operational inefficiencies that cut costs. When your ESG data is decision-grade, investors and customers gain the confidence that directly affects access to capital and commercial relationships.
PwC’s 2025 Global CSRD Survey found that Among companies already reporting under CSRD or ISSB frameworks, 70% are gaining measurable business value beyond compliance. The organizations getting there fastest are building governance structures now and treating each reporting cycle as an infrastructure investment, not a one-time exercise.
Sustainability data is following the same trajectory financial data followed decades ago. Investors, regulators and markets now expect emissions disclosures to be accurate, traceable and defensible. The ESG team can no longer own this alone.
On the pushback — and why it’s missing the bigger point
Yes, there’s resistance. ExxonMobil launched a lawsuit against California over its reporting requirements, and a recent Ninth Circuit injunction temporarily paused enforcement of the related SB 261 (which requires climate risk reporting at a lower $500 million revenue threshold).
Other large companies have pushed back publicly against SB 253. The operational burden is real, and I won’t minimize that. The federal direction on ESG may be increasingly hostile right now. That, however, has not reduced the market demand for high-quality climate data. If anything, it raises the bar.
But litigation may slow the regulatory timeline. It won’t reduce the demand for high-quality climate data. If anything, it raises the bar. Investors are asking. Customers are asking. And in an environment where emissions disclosures will be publicly accessible and scrutinized not just by regulators but by the market at large, the reputational exposure for companies with weak data is significant.
The window to act is now
Start with Scope 1 and 2. Build your Scope 3 infrastructure in parallel. Don’t wait for the deadline to force your hand, because by then, you won’t have enough runway.
The organizations that come out ahead of SB 253 won’t be the ones that viewed it as a compliance checkbox. They’ll be the ones that use it as a forcing function to build something durable: centralized, auditable, decision-grade sustainability data that serves the whole business, not just the reporting team.
SB 253 is ultimately about more than disclosure. It reflects a broader shift in how American businesses are expected to measure performance, manage risk and demonstrate accountability in a low-carbon economy. From where I sit, the direction of travel is clear. The only real question is who gets there first.
