California Air Resources Board

June 1, 2026

Lauren Sanchez
Chairwoman
California Air Resources Board 1001 I St.
Sacramento, CA 95814

Submitted electronically

RE: CRA Comments on California Corporate Greenhouse Gas Reporting Program Rulemaking Including Cost Concerns for June 1, 2026 Comments Deadline (follow up from CRA Comments Submitted to CARB April 13, 2026)

The California Retailers Association (CRA) appreciates the opportunity to continue to provide comments on the rulemaking for California’s Corporate Greenhouse Gas (GHG) Reporting Program (The Program) following the California Air Resources Board’s (CARB) virtual public workshop held on March 23, 2026 to support the development of The Program authorized by Senate Bill (SB) 253 (Wiener, Stats. 2023; codified in Health & Safety Code (HSC) § 38532), as amended by SB 219 (Wiener, Stats. 2024, Chapter 766; codified in HSC §§ 38532 and 38533).

CRA is the only statewide trade association representing all segments of the retail industry including general merchandise, department stores, mass merchandisers, on-line marketplaces, restaurants, convenience stores, supermarkets and grocery stores, chain drug and specialty retail such as auto, vision, jewelry, hardware and home stores. The California Retailers Association works on behalf of California’s retail industry, a driving force of California’s economy, with over 400,000 retail establishments, an annual gross domestic product of $330 billion and one fourth of California’s total employment.

The retail industry is committed to the goals of SB 253 as amended by SB 219 and has made investments in sustainability practices and appreciates the opportunity to participate in the rulemaking process.

Below are CRA’s comments and concerns that remain following CARBs March 23 workshop, which included an update from CARB staff on additional information for the August 10, 2026, Scope 1 and Scope 2 emissions reporting deadline; the next stage in regulatory development; overview of
the development of the greenhouse gas reporting requirements for 2027-2030 under HSC § 38532; preliminary staff options for Scope 3 emissions reporting requirements for 2027-2030; solicitation of alternative approaches; and an overview of staff’s approach to the economic analysis.

These comments also follow comments CRA submitted to CARB April 13, 2026.

We look forward to ongoing dialogue and are happy to make our subject matter experts available to answer specific questions or provide additional information that may be useful as CARB moves forward with finalizing California’s Corporate Climate Reporting regulations.

Additional Cost Specific Concerns to the SB 253 Regulation
Regarding anticipated costs for GHG emissions reporting:

Scope 1 & 2 Reporting & Assurance Costs:

Based on past costs and current estimates from the Big 4 accounting firms, the California Retailers Association would anticipate individual costs to be approximately $185,000 each year for assurance over scope 1 and 2. This excludes internal resource needs and other fees associated with reporting.

Scope 3 Reporting & Assurance Costs:

The retail industry’s initial costs of individual companies is $210,000-$220,000 for reporting preparation in year 1 and information is not yet known for the additional assurance costs that will be incurred for scope 3. This also excludes internal resource needs and other fees.

Will most of the costs associated with reporting be incurred in state or through offices in other jurisdictions (e.g. headquarters in other states, countries)?

Costs associated with reporting are expected to be incurred through a retail company’s world headquarters (US) state.

GHG Accounting Feedback for CARB

ORGANIZATIONAL BOUNDARIES

Are there other approaches to organizational boundary setting that CARB should consider?

No, the California Retailers Association supports Operational Control in line with current approach and other regulatory requirements, including the Australia Sustainability Reporting Standards.

How should entities explain their choice of organizational boundary?

Entities should be free to choose their organizational boundary based on the nature of their business and in alignment with other regulatory requirements. CARB should ensure that any requirements on organizational boundaries are harmonized with requirements across other International Financial Reporting Standards-aligned jurisdictions such as Australia to avoid undue administrative burden.

ACCOUNTING METHODS

What accounting methods does your organization currently use for Scope 1, 2, and 3 GHG estimation?

Retailers currently use a hybrid approach, comprised mostly of activity-based and supplier-based. Retail companies could use spend-based in the future if they disclose certain Scope 3 categories related to energy procurement but don’t currently do so.

Should CARB consider allowing other accounting methods? If so, which ones and why?

No, CARB should not consider allowing other accounting methods to avoid double counting.

EMISSION FACTORS

What criteria should emission factors meet to be used in this program?

Below are emission factors (EFs) used by the retail industry, but CRA encourages CARB to allow companies to use other credible EFs developed by industry or sector-specific organizations where needed:

• Clean Cargo - currently used for ocean-based emissions

• International Energy Agency or IEA - used more broadly across categories

• Department for Environment, Food and Rural Affairs (DEFRA) - accounts for United Kingdon grid emissions but often used for business travel

• Higg Materials Sustainability Index (MSI) - used for materials

• Eco Impact Compass (Compass Carbon) - used for packaging Scope 3 Reporting Options

OPTION 1: BROAD APPLICABILITY

Should reporting entities be able to report as de minimis certain categories due to lack of relevance/materiality and/or feasibility?

Yes

What specific thresholds, definitions, or decision frameworks should CARB use to determine when a Scope 3 category is considered de minimis to be reported?

Decisions and rationale on which categories to report on should be based on guidance from the GHG Protocol and should reflect relevant categories (not necessary material categories).

How should CARB weigh reporting flexibility against alignment with current mandatory and voluntary practices and other international standards?

CARB should consider alignment and harmonization with other regulatory requirements, which Option 1 is most aligned with.

OPTION 2: SECTORAL PHASE-IN

Are these sectors the appropriate starting point for a phased approach to Scope 3 reporting? What factors should CARB consider in confirming or adjusting this prioritization?

Retailers would require further clarity on timing and applicability of the sectoral phase-ins in Option 2 but are not supportive as this approach would require retail companies to report on all categories regardless of relevance. If there was an option to employ a de minimis provision for Option 2, retailers would be open to supporting.

OPTION 3: CATEGORY PHASE-IN

Are these the appropriate categories to prioritize for initial reporting based on data availability and relevance across sectors?

Retailers do not support Option 3 as it doesn’t provide the ability to give investors specific insights to companies based on the relevance of Scope 3 categories.

If CARB’s Climate Disclosure Team has questions or needs additional information on the issues raised in this letter, please do not hesitate to contact me directly either at 916/443-1975 or Sarah@calretailers.com

Sincerely,

Sarah Pollo Moo

Vice President, Operations and Sustainability Compliance California Retailers Association

CC: CARB Climate Disclosure Team at climatedisclosure@arb.ca.gov

Attachments: All Previous CRA Correspondence Sent to CARB for This Rulemaking (accessible via document in file upload)