Scope 3 Reporting Across California, the UK and EU: What Is Required Now and What Comes Next

Right now, in mid-2026, a multinational subject to all three regimes owes mandatory Scope 3 disclosure in precisely none of them. That is the last year this will be true.

California's first Scope 3 report lands in November 2027. EU companies begin reporting under the revised ESRS for financial year 2027. The UK's comply-or-explain obligation bites for accounting periods starting January 2028. So the sequencing gives you roughly eighteen months before the first hard deadline, and value chain data takes twelve to eighteen months to build properly. The arithmetic is uncomfortably tight.

What follows is where each regime actually stands, what they'll demand of your suppliers, and where the three quietly diverge in ways that affect how you build.

The State of Play

California. SB 253 catches US-organised entities with over $1 billion in total annual revenue doing business in the state. Scope 1 and 2 come first, the inaugural report was deferred from 10 August to 10 November 2026, with CARB releasing revised rulemaking for that change on 27 July and public comments due 11 August. Scope 3 begins with the 2027 cycle, due November 2027, covering the prior fiscal year. CARB has confirmed Scope 3 is not required at all in 2026.

United Kingdom. DBT published UK SRS S1 and S2 on 25 February 2026, and they are voluntary today. The FCA's CP26/5 proposes mandatory S2 for listed companies for accounting periods beginning 1 January 2027, but Scope 3 is expressly carved out of that. Two mechanisms land on the same date. UK SRS carries a built-in transitional relief permitting non-disclosure of Scope 3 for one year from initial application, which runs out for periods commencing on or after 1 January 2028. And the FCA proposes that from that same date, Scope 3 be required on a comply-or-explain basis only, not full mandatory reporting. So Scope 3 is effectively optional for FY2027 and comply-or-explain thereafter. The policy statement is expected in autumn 2026, so these remain proposals.

European Union. The Commission adopted the revised ESRS on 3 July 2026. They apply from financial year 2027, with voluntary early application for FY2026. Omnibus I narrowed CSRD scope sharply, companies now need more than 1,000 employees and more than €450 million turnover. Scope 3 sits within ESRS E1, which the revision expanded from nine disclosure requirements to eleven, and survived the datapoint cull intact.

Side by Side

Where they Genuinely Differ

Three divergences matter operationally. The rest is noise.

California is narrowing the categories; the UK and EU are not

This is the sharpest difference, and it emerged only this month. At its 21 July workshop, CARB acknowledged that requiring all fifteen Scope 3 categories from 2027 would create real cost and data problems. Staff proposed a phased approach starting with the five most commonly reported categories:

• Purchased goods and services
• Fuel and energy-related activities
• Waste generated in operations
• Business travel
• Employee commuting

Other categories would be encouraged voluntarily, with the mandatory set potentially expanding over time. CARB has not said how or when.

Contrast that with the UK and EU, which both require consideration of all fifteen categories and disclosure of those that are material. That sounds broader, and formally it is, but the materiality filter does similar work in practice. A retailer with trivial processing-of-sold-products emissions won't report that category under ESRS either.

The practical difference is one of default. California starts you with a defined list and lets you add. The UK and EU start you with a screening obligation across the whole value chain and let you exclude with reasons. If you're building for all three, build the screen, it satisfies the UK and EU, and California's five categories fall out of it.

Note also what California's approach does not include: use of sold products, the category that dominates footprints for energy, automotive and industrial companies. Those firms will report it in Europe and, on current proposals, not in California.

The EU's value chain cap has a hole in it shaped exactly like Scope 3

This is the detail most likely to catch people out, and it runs opposite to how the Omnibus is usually described.

Omnibus I introduced a value chain cap: companies subject to CSRD cannot require value chain partners with 1,000 employees or fewer to provide more sustainability information than the new voluntary standard for smaller companies covers. It applies from FY2026 and is presented, correctly, as protection for SMEs against unbounded data requests from large customers.

But the cap does not extend to ESRS E1-8 metrics, gross Scope 1, 2 and 3 GHG emissions. Emissions data is explicitly carved out. The same carve-out appears in the related relief allowing partial value chain reporting where data cannot be obtained without excessive cost or effort.

Read that carefully if you are on either side of a supply relationship. If you're an in-scope reporter, the cap constrains what you can ask about most sustainability topics but not about emissions, your Scope 3 data requests can still go to small suppliers. If you're a smaller supplier hoping the cap shields you from your customers' carbon questionnaires, it does not.

The UK is the only one where the explanation is the deliverable

California and the EU expect numbers. The UK, for at least the first years, will accept a reasoned account of why you haven't produced them, but the bar for that account is higher than "comply-or-explain" usually implies.

A general statement of non-disclosure won't do. The FCA sets out three specific requirements for anyone taking the explain route: identify the specific paragraphs of UK SRS S2 where Scope 3 disclosures haven't been produced; explain the reasons; and explain the steps being taken or planned to make those disclosures in future, including the timeframe. Paragraph-level, not a general narrative.

There's a sting attached. The FCA has flagged that opting to explain rather than comply could prevent an issuer from stating compliance with UK SRS at all, the standards require a full, unreserved compliance statement or none. For a company using UK SRS alignment as an investor signal, that trade-off is real and worth modelling before defaulting to the explain route.

So the UK produces a genuinely different compliance artefact. There you may need to write, defend and update a paragraph-referenced Scope 3 improvement plan with dates, as a disclosure in its own right. Under SB 253 you file a number covering five categories.

What each Regime Expects of Your Suppliers

The measurement basis is the one place all three converge cleanly: the GHG Protocol. California intends to align primarily with the Corporate Standard and Scope 2 Guidance, and CARB has explicitly stated interoperability with IFRS S2 and CSRD as a goal. UK SRS S2 imports IFRS S2, which builds on the GHG Protocol. ESRS E1 does the same.

That matters more than it sounds. One value chain inventory, built on GHG Protocol methods, substantially serves all three. You are not building three data programmes.

Where expectations differ is in rigour and direction of travel:

Primary over secondary data. CARB has recommended prioritising primary data over secondary, and addressing measurement uncertainty qualitatively or quantitatively where feasible. The GHG Protocol's own Scope 3 Standard revision, Phase 1 progress update published 31 March 2026, still draft, proposes disaggregating data by quality tier with spend-based proxies ranked lowest, a 95% coverage floor with justified exclusions, and disclosure of whether data has been verified. Nothing in that binds you yet. All of it signals that spend-based estimation across the board has a limited shelf life.

Base years and restatement. CARB proposes treating your first reporting year as the base year, with recalculation triggered where structural or methodological changes cumulatively affect more than 5% of base-year emissions. Build the change log from day one; you will restate.

Documentation of exclusions. All three regimes want to know what you left out and why. California proposes requiring explanations for excluded emissions sources. The UK requires category-specific explanation. The EU permits partial value chain reporting but expects the reasoning. An undocumented gap is the weakest thing in any of these reports.

Assurance: The Biggest Divergence of all

If you plan around one thing, plan around this. The three regimes are not converging on assurance, and Scope 3 assurance in particular is further off everywhere than the reporting obligations.

California. Limited assurance begins with reports submitted in 2027, but over Scope 1, Scope 2 and separately reported biogenic CO2, not Scope 3. CARB is proposing five acceptable standards. The statutory limited assurance requirement for Scope 3 is slated for 2030 and is expressly not part of the current rulemaking. Alongside that sits a good-faith safe harbour: Scope 3 statements made on a reasonable basis and in good faith are shielded from penalty through 2030.

United Kingdom. Assurance is not mandatory, and the FCA has said it does not consider it appropriate to require at this stage, though it may revisit. What is required is transparency: state whether third-party assurance over your UK SRS S2 disclosures, including Scope 3, has been obtained and under which standard. The relevant domestic standard, ISSA (UK) 5000, takes effect for periods beginning on or after 15 December 2026.

European Union. Limited assurance applies. Notably, Omnibus I dropped the planned escalation to reasonable assurance, and the Commission is due to publish harmonised limited assurance standards by mid-2027.

The pattern: Europe requires limited assurance and has stopped there; California phases it in from Scope 1 and 2 outward with Scope 3 at the far end; the UK requires you to disclose whether you bothered. For a group reporting in all three, the binding constraint is the strictest applicable requirement, and the practical constraint is assurance market capacity, which every large company in three jurisdictions will be competing for simultaneously.

What this Means if You Report in More than One

Build one inventory to the strictest standard you face. The GHG Protocol foundation is common. Maintaining separate California, UK and EU Scope 3 programmes is duplicated cost for no benefit. Where the regimes differ, they differ on which slice of a single inventory gets disclosed and when.

Screen all fifteen categories even if California only asks for five. The screening exercise is the expensive part. Having done it, satisfying California's narrower list is trivial; the reverse is not.

The relief periods are not idle time. California's safe harbour runs to 2030, the UK's transitional relief to 2028, the EU permits estimates where data is genuinely unobtainable. Every one of these is a runway, and all three regulators have said so in their own way. Twelve to eighteen months is the realistic build time for production-quality Scope 3 disclosure, which means the deferrals roughly match the work, provided you start now.

Watch what is still moving. California's 2027 rulemaking is a draft concept, not a rule; CARB is holding industry listening sessions in August and September before publishing draft regulations. The FCA's policy statement is due in autumn. The revised ESRS are through adoption but sit in the Parliament and Council scrutiny period. And SB 253 remains under constitutional challenge in Chamber of Commerce v. Sanchez, where the Ninth Circuit has not ruled.

Anchor on the fixed points. Two dates are not in serious doubt: California's Scope 1 and 2 report in November 2026, and Scope 3 entering the frame across all three regimes during 2027 and 2028. Between those, the supplier relationships and data pipelines you build are the only part of this that transfers cleanly across every jurisdiction, and the only part no regulator can defer for you.

Multi-Jurisdiction Checklist

1. Map which regimes catch you, thresholds differ ($1bn revenue; UK listing category; 1,000 employees and €450m turnover).
2. Screen all fifteen Scope 3 categories once, to a GHG Protocol basis, and reuse the output across all three regimes.
3. Confirm whether use of sold products is material to you, required in Europe, absent from California's proposed initial five.
4. Don't rely on the EU value chain cap for emissions data; E1-8 GHG metrics are carved out of it.
5. Prepare a category-specific Scope 3 improvement plan, a UK deliverable in its own right, and useful evidence everywhere else.
6. Prioritise primary supplier data in your highest-emission categories; spend-based proxies are being ranked lowest in the GHG Protocol revision.
7. Set your base year now and log structural and methodological changes against a 5% recalculation trigger.
8. Document every exclusion with its reason; undocumented gaps are the weakest point in any of these reports.
9. Book assurance capacity early, California requires limited assurance on Scope 1 and 2 from 2027 and the EU requires it broadly.
10. Track the three open items: CARB's 2027 draft rule, the FCA policy statement in autumn 2026, and the Ninth Circuit ruling.

Position as of 30 July 2026. CARB's 2027 requirements are proposed concepts with draft regulations still to come; the FCA's rules are at consultation stage pending an autumn policy statement; the revised ESRS are adopted but in scrutiny. SB 253 is subject to pending litigation. Verify against CARB, FCA, DBT and European Commission sources, and take professional advice for your circumstances.

Sources

K&L Gates, Ropes & Gray, Sullivan & Cromwell, Sidley Austin, Mintz, Davis Polk, Akin Gump, California Air Resources Board, FCA, Linklaters, Sustainability Reporting Standards, UK SRS, Cooley, Morrison Foerster, kShuttle, European Commission, Coolset, GHG Protocol, IFRS Foundation

This article is intended for general professional information and does not constitute legal, financial, or investment advice.