Preparing for the new greenhouse gas inventory verification regulations – Our experts answer your questions
Accurately measuring and verifying greenhouse gas (GHG) emissions has become a critical priority for businesses of all sizes working across every sector of the global economy. Evolving regulations such as California Senate Bill 253 (SB253) and the European Union’s Corporate Sustainability Reporting Directive (CSRD) underscore the need for companies to establish independent third-party verifications of their GHG inventories. Achieving compliance with these regulations not only ensures regulatory adherence, but also enhances corporate transparency, boosts stakeholder confidence, and strategically positions businesses in a market increasingly driven by sustainability metrics.
In this blog, the SCS GHG verification team outlines some of the major pieces of legislation currently driving important changes in the landscape of corporate environmental reporting and accountability. We also answer some of your most frequently asked questions related to the technicalities, processes, and timelines associated with GHG inventory verification in light of these regulations.
Regulatory Drivers of GHG Verification
A few major pieces of legislation are driving increased attention to and scrutiny of GHG inventory and verification. Also known as the Climate Corporate Data Accountability Act, California’s SB253 entered the scene in early 2024 and applies to both public and private companies doing business in California that bring in a total annual revenue greater than 1 billion US dollars. This legislation requires independent third-party verification and is expected to utilize the GHG protocol as criteria.
The California Air Resources Board (CARB), which serves as the governing body for SB253, has until July 1, 2025, to publish official disclosure requirements for GHG verification. In terms of more immediate timing, the reporting period for SB253 is set to open in 2026. Importantly, this initial reporting period will be under a limited level of assurance and will assess a company’s 2025 data. Eventually, reporting under SB253 will graduate to a reasonable level of assurance, and in 2027, scope 3 emissions will be included under limited assurance.
EU CSRD is mobilizing significant climate action across diverse sectors and applies to a broad range of both EU and non-EU companies. EU CSRD’s reporting period (as written in the current legislation), will begin in 2026 and — similar to California’s SB253 — will utilize 2025 data and require limited assurance for scope 1, 2, and 3 emissions.
It is also important to consider the proposed changes aimed at simplifying sustainability requirements. On February 26, 2025, the European Commission introduced an "Omnibus" package proposing significant changes to key EU laws on sustainability reporting. The package includes three legislative proposals targeting the Corporate Sustainability Reporting Directive (CSRD), Corporate Sustainability Due Diligence Directive (CSDDD), and Carbon Border Adjustment Mechanism (CBAM). The Commission has shared a draft proposal for public feedback to update rules under the EU Taxonomy Regulation and plans to revise the regulation that created the first European sustainability reporting standards (ESRS).
The Commission's proposed changes will undergo the EU's legislative process, potentially taking several months and resulting in final rules that may differ from the current regulations. The new proposal suggests using employee numbers as the primary indicator for qualifying companies. Only companies with over 1,000 employees would need to meet one of the financial metrics (€50 million turnover or €25 million balance sheet). This change could reduce the number of companies in scope by nearly 80% and delay compliance deadlines for large EU undertakings and listed small and medium enterprises (SMEs) to 2028, aiming to simplify reporting requirements and administrative efforts to compile these data.
The Experts Answer Your Frequently Asked Questions
What is the difference between limited and reasonable levels of assurance?
Verification of a company’s GHG inventory culminates in a comprehensive report and statement from the third party, affirming the degree of confidence in the reported results. This degree of confidence is defined by either limited or reasonable levels of assurance.
A verification conducted at a limited level of assurance has a higher acceptable risk threshold and is less rigorous in nature, timing, and scope compared to a reasonable level of assurance. Limited assurance verifications assume the following, as detailed in ISO 14064-3: 2019:
- Data systems and controls are assumed to be reliable unless material evidence is discovered that suggests otherwise.
- The scope of work related to evidence-gathering activities is deliberately reduced but still results in meaningful assurance for intended users. If the verifier identifies potential material misstatements, evidence-gathering activities will be designed to address those potential misstatements.
- The risk assessment is based on the GHG statement as a whole and material errors are assessed at the statement level.
- The verification opinion asserts that no evidence was found that the GHG statement is not materially correct or not prepared in accordance with reporting criteria.
As regulatory requirements evolve, companies may need to transition to reasonable assurance, which assumes a high level of assurance and has a lower acceptable risk threshold compared to a limited level of assurance verification. Reasonable assurance verifications assume the following, as detailed in ISO 14064-3: 2019:
- Data systems and controls are not assumed to be inherently accurate, and evidence-gathering activities are designed to test the reliability of these processes. A review of primary data records is typical at a reasonable assurance level.
- The evidence-gathering plan is continuously updated until sufficient and appropriate evidence is collected that allows the verifier to reach a conclusion.
- The verification opinion asserts, with a high level of confidence the GHG assertion was prepared in all material respects with the reporting criteria.
The distinction between these levels of assurance is significant: limited assurance offers a preliminary review, while reasonable assurance involves a comprehensive audit of GHG inventories. Determining the level of assurance is a necessary step towards ensuring that companies not only comply with regulatory mandates, but also acts as a chance to demonstrate robust environmental stewardship and commitment to sustainability.
What is the process for GHG inventory verification?
The process for GHG inventory verification includes the following steps:
- Pre-engagement activities
At this first stage, we are working with the company (client) to define the project, determine your organizational boundaries, level of assurance, and clarify the scope of the project. During pre-engagement activities, we assess our internal timelines as well as confirm that there is no conflict of interest between the client and our verifying team. - Verification planning
Verification planning entails a kickoff meeting, any initial data requests to the client, and performing high-level overview of the initial inventory for a risk assessment where we can start to identify those key areas that have the highest potential for error within a company’s inventory. - Verification activities
Once we complete the verification plan, we proceed to our verification activities. Here, we perform all of our evidence gathering tasks as well as recalculating a sample of a company’s data. Also in this stage, any findings are reported back to the client so that any errors or discrepancies have the chance to go through those necessary corrective actions and then be resubmitted for final approval. - Drafting the final report
In step four of the verification process, we draft the findings into a detailed report and statement, and then it moves into the final stage of independent review. - Final independent review
In keeping with ISO requirements, independent review is a critical stage. During this process, another team member who has not been involved in any of the previous stages of verification will determine whether the project has been conducted according to the objectives of the verification process and if the results are deemed to be correct.
Each stage is designed to assess the accuracy and completeness of a company's GHG emissions data. Early engagement with a third-party verification body is crucial, given that the entire process can span a minimum of eight weeks and is influenced by factors such as organization size, complexity, and data readiness.
Does a reasonable level of assurance require a site visit?
Not necessarily. During step two of the verification process outlined above — when we conduct a risk assessment and note any major discrepancies within a company’s inventory — we would discuss a site visit if necessary. Generally speaking, though, most projects evaluated under this GHG protocol typically can fall under a desk review. Usually, we can resolve any major issues without a site visit.
This question serves as a useful reminder for when the ISO Standard 14064-3:2019 comes into play. Entitled “Specification with guidance for the verification and validation of greenhouse gas statements,” ISO 14064 outlines “a comprehensive framework for the validation and verification process, including the qualifications, competence and responsibilities of the validation and verification teams, the data and information that must be collected and analyzed, and the documentation and reporting requirements.” By turning to the specifications outlined in the Standard, SCS leads organizations through the complex reporting requirements and responsibilities depending on the size and type of business. (For an expanded discussion of the ISO 14064 Standard, see: CarbonRegistry.com.)
What is the timing for reasonable vs. limited assurance?
Reasonable verifications are generally more time intensive for the verification teams due to a more rigorous review process involved, as outlined earlier. A standard reasonable assurance verification is typically planned for a 10-week timeline — compared to an eight-week timeline for a limited assurance verification.
Several factors can impact the project timeline, however, including the complexity of the inventory and the scope of the project. The process may also be accelerated or delayed depending on the quality of the data, the methodology provided, and the responsiveness to findings and information requests, among other factors.
Will the CSRD require GHG verification?
Yes; the Corporate Sustainability Reporting Directive (CSRD) will require GHG verification as part of its broader ESG reporting requirements. It's important to consider the proposed changes under the Omnibus package. The proposed bill could impact GHG reporting through the reduction of scope, raised reporting thresholds, and time delay. These specific changes, however, would also streamline the GHG requirements, thus simplifying the verification process.
Is an inventory management plan required for verification?
Yes; the GHG protocol requires a documented inventory management plan detailing methodologies and assumptions.
When is the right moment to start the verification process?
The earlier, the better. We recommend reaching out to establish a relationship with our GHG verification team early to ensure readiness. We do not begin projects until data are submitted and ready to be reviewed. Once your company’s teams have completed the inventory, then our teams can get started with the kick-off.
Does SCS Global Services provide service level and product level emissions verification?
Yes; we offer both service level and product level emissions verification.
What are the accreditation requirements for SB253?
The final requirements of SB253 are still pending, however, SCS Global Services is an ANSI National Accreditation Board (ANAB) accredited verification body and highly experienced in working under these complex regulatory requirements. Plus, SCS has a strong working relationship as a verification body for other CARB schemes — this means once the accreditation requirements are made public, we will be prepared to work with businesses seeking to establish compliance under SB253.
Will verification be required annually?
Yes; it is likely to be required annually, aligning with current voluntary reporting practices such as CDP. Most of our current clients who operate in the voluntary space already — either reporting to CDP or stakeholders — do so on an annual basis so that they can verify and keep track of their emissions and reductions year over year.
Do I need to have my scope 3 inventory for CDP or SB253?
Scope 3 is not required by CDP, but reporting on it does help to improve your overall score.
For SB253, scope 3 will not be required in the first iterations of the regulations but is projected to be required starting in 2027 for 2026 inventories. Generally, we find that most of the companies we work with benefit from establishing their scope 3 emissions inventory and obtaining verification in preparation for the future regulation of scope 3. It would be important to start that process in 2025 so that scope 3 information can be documented for all of 2026 to report in 2027.
Is there a platform for publishing verified inventories?
CARB may be developing a submission platform, which is part of a series of decisions that CARB will be making in July of this year.
Does SCS offer a re-verification service in conjunction with inventory verification, or would we need to go through an entirely new verification process?
We often incorporate verification or re-verification of a baseline year within your annual project scope. Often companies will seek re-verification of a specific year due to acquisition, divestiture, or other changes to their overall inventory. Per GHG protocol, it’s important to establish a baseline year and a plan for re-baselining.
For those with specific questions about the technicalities of re-baselining, we recommend you reach out to the GHG verification team at SCS.
SCS Global Services is your trusted GHG verifier
SCS Global Services is an ANSI National Accreditation Board (ANAB) accredited third-party verification body under ISO 14065. SCS has provided third-party GHG verification for over 15 years with more than 300 verifications for organizations of all sizes including some of the largest Fortune 500 companies. We regularly work across industry sectors including food and agriculture, apparel, manufacturing, technology, airlines, retail, building materials, municipalities, utilities and many more. SCS auditors employ the most current accounting principles and GHG calculation methodologies, including the complex verifications for scope 3 categories. Positive verification statements can be shared publicly on your website, in your annual CSR reporting, and with reporting frameworks to underline your commitment to accuracy in GHG accounting. SCS boasts a 90% customer return rate based on our consistent customer service and on-time delivery.
Where can I learn more about the GHG verification process?
Be sure to watch our webinar replay where we discuss the latest climate and sustainability reporting regulations, the GHG verification process, and answer even more audience questions than we cover here in this blog. You can also visit our website to learn more and begin the GHG verification process: https://www.scsglobalservices.com/services/greenhouse-gas-verification.
More questions? Please get in touch with us today: Penlyn Crawford, Program Manager, GHG Profiling; [email protected]