The 2027 corporate climate blueprint: Scope 3 and assurance decoded 

California’s Health & Safety Code § 38532 (formerly SB 253), the Climate Corporate Data Accountability Act, is one of the most consequential corporate climate disclosure mandates in U.S. history. For all companies doing business in California with annual revenues exceeding USD 1 billion, the law requires public disclosure of Scope 1 and 2 greenhouse gas emissions, with the current deadline set for November 2026. At the start of 2027, the requirements are proposed to expand significantly: Scope 3 emissions disclosure and limited third-party assurance of Scope 1 and 2 data are both scheduled to take effect in 2027.

As of this writing, the California Air Resources Board (CARB) has not finalized the approach to Scope 3 requirements. CARB is currently weighing three approaches: a de minimis framework requiring disclosure of all material categories, a sectoral phase-in beginning with high-emitting industries, and a phase-in by emissions category starting with the most common or highest-impact sources. While the specifics remain unsettled, Scope 3 disclosure is coming, and the organizational work required to support it will be significant.

For companies unsure where to begin or how the 2027 regulation will affect their business operations, we have identified two key actions organizations can take now to prepare for the upcoming disclosure requirements.

Scope 3 emissions are everything outside of a company’s direct energy consumption, encompassing the full upstream and downstream footprint of business operations. The Greenhouse Gas (GHG) Protocol organizes these emissions sources into 15 categories spanning purchased goods, capital goods, employee commuting, business travel, and the use of leased or sold assets, to name a few. For real estate owners and investors, the most common material categories include tenant energy use, purchased goods and services, capital goods, and business travel. Materiality varies significantly by portfolio and operating model.

One of the first substantive challenges companies encounter when developing a Scope 3 inventory is determining which of the 15 categories are relevant to their organization. This requires a careful examination of the company’s operations and value chain to understand where material emissions occur. The complexity of that analysis is precisely why many companies engage experienced consultants to ensure the right categories are identified before any data collection begins.

Once materiality is established, attention turns to data availability and internal ownership. Which teams will be responsible for sourcing the necessary information, and what does that data actually look like? This step is consistently underestimated, yet navigating it successfully is just as consequential as the materiality assessment itself.

Scope 3 data is distributed across finance, procurement, human resources, legal, asset management, and leasing. Surfacing the necessary data requires deliberate cross-functional engagement, and it takes time and organizational resources to build those lines of communication. The organizations that will be well-positioned for 2027 are those that begin the internal alignment work now, before disclosure timelines make those conversations urgent.

For companies subject to Code § 38532 that have not yet undertaken a Scope 3 inventory, three early priorities will help them prepare:

1. Establish internal ownership. Scope 3 reporting requires sustained coordination across multiple business functions, and the process needs a clear internal owner from the outset. For organizations without a dedicated sustainability team, this responsibility may initially sit with operations, risk management, or finance. This is a workable starting point, provided that the individual or team is given the resources and mandate to engage colleagues across the organization. Where a sustainability team does exist, the priority becomes proactive outreach to the teams that hold material data.
2. Engage an experienced advisor early. Scope 3 calculations are rarely straightforward. They require judgment calls about materiality, methodology, and data proxies that vary based on an organization’s operating model and what primary data is realistically available. Engaging a consultant during the planning phase rather than at the point of calculation allows an organization to develop a sound methodological approach, identify data gaps with enough lead time to address them, and avoid the compressed timelines that produce lower-quality inventories.
3. Align leadership and key stakeholders on the nature of the disclosure. Carbon emissions reporting differs significantly from traditional financial and operational disclosures. The level of inherent uncertainty is higher, the methodology is less standardized, and the reputational stakes of public mischaracterization are significant. Decision-makers and legal counsel should be engaged early to establish a disclosure posture the organization is comfortable with, including whether to add safe harbor language or other qualifications in public statements. An experienced consultant can support this process by providing peer benchmarks, explaining the current state of regulatory guidance, and helping stakeholders understand what defensible disclosure looks like in practice.

There are two types of assurance under which independent third parties review a GHG inventory: limited assurance and reasonable assurance. Limited assurance, which is subject to a lighter-touch assessment than reasonable assurance, applies to Scope 1 and 2 data beginning in 2027. Reasonable assurance requirements involve greater scrutiny and will apply to Scope 1 and 2 data beginning in 2030. Many organizations are understandably treating assurance as a step to take once the inventory is finished. However, assurance readiness is a documentation discipline that needs to be embedded in the inventory process from the start.

Assurance providers will examine not just the final numbers but also the methodology behind them. They will look at the emissions factors used, the basis for any exclusions, and the traceability of each calculation. For public companies, assurance providers may also cross-reference the GHG inventory against other filings, including 10-Ks and proxy statements, to confirm that the organizational boundary is consistent across disclosures. Inconsistencies that seem minor in isolation can become findings during the review process.

To pressure-test methodology and resolve questions before they become issues, the most effective approach is to engage an assurance provider before the inventory is complete. For real estate organizations, this means seeking a provider with genuine sector experience—one that understands the complexity of utility billing, building-level data aggregation, and the operational realities of multi-tenant portfolios. This is also where the choice of consulting partner matters. A firm that has worked through the assurance process with real estate clients will know what documentation practices hold up under review, what concerns assurance providers flag most often, and how to structure an inventory that is built for scrutiny from the outset.

The organizations that navigate California’s Code § 38532 successfully will not be those that wait for regulatory certainty before acting. CARB will continue to refine its guidance, and some details will remain in flux well into the disclosure window. However, the foundational work of a materiality assessment, cross-functional stakeholder alignment, data gap analysis, documentation discipline, and early assurance engagement is clear regardless of which Scope 3 disclosure approach CARB ultimately adopts.

These requirements pose a business coordination challenge that requires teams capable of working across organizational functions, translating regulatory requirements into operational terms, and helping companies build internal capacity rather than simply delivering a report.

This article was written by Erin Hocking,Strategy & Reporting Lead and Courtney Hessler, Senior Consultant at Brightworks Sustainability. Learn more about Brightworks Sustainability here.