California Climate Accountability Package (CCAP)

Modified on Thu, 23 Oct at 3:23 PM

Introduction
Recommendations
To prepare for CCAP, companies should note that CCAP mandates:

Introduction

California’s Climate Accountability Package (CCAP) — comprising SB 253 (Climate Corporate Data Accountability Act) and SB 261 (Climate-Related Financial Risk Act) — was adopted in 2023 to bring greater transparency and accountability to companies operating in the state. The intent is twofold:

SB 253 requires large companies to disclose their Scope 1, 2, and 3 GHG emissions with phased-in third-party assurance, aligned B Lab’s Climate Action requirements 1.1 and 1.2
SB 261 mandates biennial disclosure of climate-related financial risks, structured on the TCFD/IFRS S2 pillars (Governance, Strategy, Risk Management, Metrics & Targets).

Together, these laws seek to protect investors, consumers, and markets by ensuring that businesses disclose consistent, decision-useful information on both emissions and climate risks.

By contrast, B Lab’s Standards underpin the B Corp Certification and pursue a broader systems-change intent. Certification requires companies to measure, manage, and improve across seven impact topics — including Climate Action (CA) and Purpose & Stakeholder Governance (PSG). The focus is on impact materiality, i.e. how the company affects people and planet, and embedding governance structures that integrate purpose and stakeholder considerations into decision-making. B Lab’s objective is not just disclosure, but driving companies toward a regenerative, equitable, and inclusive economy.

Element	California CCAP (SB 253 & SB 261)	B Lab Standards (CA1.1 & CA1.2)	Comparison / Alignment
Applicability by Size	SB 253: >$1B revenue; SB 261: >$500M revenue. Applies to U.S. entities (public or private) “doing business” in CA.	Applies to Large, X Large, XX Large. Medium, Small, Micro, and companies without workers are exempt.	Overlap: Both target larger companies. B Lab has no revenue threshold but limits obligations to size tiers. CCAP excludes mid-market firms < $500M; B Lab excludes Medium.
Applicability by Sector	No sector carve-outs – applies across all industries.	Disclosure (CA1.1): All sectors for Large+. Verification (CA1.2): Only Large+ in high-impact sectors (Wholesale/retail, Manufacturing, Agriculture, Service with Significant Environmental Footprint).	CCAP is broader (all sectors), while B Lab is risk-based (sectors with higher footprints).
GHG Accounting Methodology	Must follow GHG Protocol. Scope 1 & 2 annually (2026), Scope 3 (2027).	Must measure Scope 1, Scope 2 (location & market-based), and Scope 3 using GHG Protocol; PCAF required for financial institutions.	Aligned, B Lab is more specific (granularity: dual Scope 2, full Scope 3 categories with justification, sector-specific standards).
Scope 3 Treatment	Full Scope 3 disclosure required; details finalized by CARB.	Scope 3 disclosure required, with justification for exclusions and category-level breakdowns.	Aligned, B Lab more prescriptive and documented.
Disclosure Format	SB 253: Public digital registry. SB 261: Report must be published on company’s website.	Public annual disclosure of GHG inventory.	Aligned: Both require public availability.
Assurance / Verification of GHG inventory	Independent third-party assurance required. Scope 1+2: Limited assurance (2026) → Reasonable assurance (2030). Scope 3: Limited assurance (2030).	Independent third-party verification by an accredited certification body (ISO 14064-3, ISAE 3410, ISO 14065, ISO/IEC 17029, etc.). Applies only to Large+ in specified sectors.	Both require third-party independence. B Lab is stricter on assurance quality (ISO/IAF accreditation required upfront), while CCAP phases in assurance and leaves provider qualifications to CARB.
Climate- Related Financial Risks	SB 261 requires biennial TCFD-aligned reporting (Governance, Strategy, Risk Management, Metrics & Targets). Must disclose risks + mitigation/adaptation.	B Lab Standards integrate climate just transition planning and governance accountability across Climate Action and Purpose and Stakeholder Governance.	Conceptually aligned: Both cover governance, risk, and transition, but different framing (TCFD/IFRS S2 structure vs. B Lab’s broader purpose-driven governance).
Materiality	Financial materiality: focus on how climate change creates risks for financial performance and enterprise value (TCFD/IFRS S2 pillars).	Impact materiality: focus on a company's responsibility for emissions reduction, climate just transition planning, and contribution to 1.5°C.	Different materiality framing: SB 261 is risk-to-business; B Lab is impact-of-business. Companies may need to prepare two lenses of disclosure.
Governance, Strategy, Risk Management, Metrics/ Targets	Explicitly required, focused on climate financial risks (TCFD 4 pillars).	Required under PSG: governance body oversight (PSG5), purpose integrated in strategy (PSG1), risk management via impact/double materiality assessment (PSG2.3), metrics/targets on material topics (PSG2.4).	Conceptual alignment: Both require governance, strategy, risk management, and metrics/targets, but SB 261 applies to financial materiality; B Lab applies to impact/double materiality.
Oversight	CARB sets rules, collects fees, enforces compliance (penalties up to $50k for SB 261, $500k for SB 253).	Oversight through B Lab certification process; assurance providers accredited under ISO schemes.	Regulatory vs voluntary certification oversight.

Recommendations

The CCAP and B Lab Standards overlap on methodological foundations (GHG Protocol, public disclosure, independent assurance) but diverge in scope and framing: CCAP is jurisdiction-based, investor-oriented, and financially material; B Lab is global, certification-based, and impact-oriented.

To prepare for B Lab’s Standards, companies should:

Adopt stricter assurance practices – Use accredited providers (e.g. ISO 14065/14064-3) as required by B Lab, anticipating future regulatory tightening.
Apply double materiality – Go beyond SB 261’s financial materiality lens to include impact materiality, as prescribed by B Lab (PSG2.3).
Integrate governance and strategy – Leverage B Lab’s stakeholder governance requirements (PSG) to strengthen oversight, strategy, and target-setting on climate, ensuring resilience across both financial and impact domains.

To prepare for CCAP, companies should note that CCAP mandates:

SB 253 (Climate Corporate Data Accountability Act):
Requires GHG disclosures (Scopes 1, 2, 3) aligned with the GHG Protocol, with phased third-party assurance. Auditors will check:
- Methodological conformity (GHG Protocol).
- Completeness (covering all scopes, boundary definitions).
- Accuracy and consistency across years.
SB 261 (Climate-Related Financial Risk Act):
Requires a biennial report aligned with TCFD/IFRS S2 on financial materiality. Auditors (or reviewers) will check:
- Coverage of the four pillars (Governance, Strategy, Risk Management, Metrics/Targets).
- Focus on climate-related financial risks (not broader social and environmental impacts).

Taken together, CCAP compliance and B Corp certification can be complementary: one builds regulatory credibility, the other embeds long-term systems change.