California SB 253 · Costco Supplier Requirements

The Scope 3 deadline
is coming for your buyers

California's Climate Corporate Data Accountability Act requires companies with over $1 billion in revenue to publicly disclose Scope 3 emissions — including what they buy from you. If your product is on a Costco shelf, a Whole Foods end-cap, or a Target planogram, this deadline is already yours.

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SB 253 First Report Due
17
months remaining
August 2027
The law

California SB 253 — what it actually requires

Signed into law October 2023. First Scope 1 + 2 reports due 2026. Scope 3 reports due 2027. The fines are real — $500K per year for non-compliance.

The Climate Corporate Data Accountability Act (SB 253) requires any U.S.-based company with annual revenues exceeding $1 billion that does business in California to publicly disclose their greenhouse gas emissions across all three scopes — including their full supply chain.

Scope 3 is where it gets difficult — and where small brands become part of a larger compliance problem. Scope 3 Category 1 (Purchased Goods & Services) means every company in scope must account for the emissions embedded in everything they buy. That data has to come from their suppliers.

If you supply to Costco, Target, Whole Foods, Amazon, or any large retailer, you are part of their Scope 3 footprint. Retailers who cannot source primary emissions data from their suppliers use EEIO models — which almost always produce higher emission estimates than actual measured data, making the supplier look worse in the retailer's reporting.

Getting your own data right is not just good practice. It is competitive positioning — giving your buyer accurate, defensible numbers that reduce their compliance burden and improve your standing in their supply chain evaluation.

$500K annual penalty
Maximum fine per year for companies that fail to file required emissions disclosures. California Air Resources Board enforces compliance.
$1B revenue threshold — but the pressure flows down
The law applies to large companies. But those companies need Scope 3 data from every supplier. Small brands that can't provide data get penalized through estimated (higher) emissions in retailer reports.
Primary data beats EEIO every time
Suppliers who provide actual measured emissions data — rather than letting their buyers estimate — consistently show lower footprints and stronger retailer relationships.
SB 261 doubles the exposure
California's companion bill (SB 261) requires financial climate risk disclosure from $500M+ companies — adding investor pressure on top of regulatory pressure.
The 15 Scope 3 categories

Which categories matter for your business

SB 253 requires disclosure across all 15 Scope 3 categories where material. For food, beverage, and wine producers, four categories dominate the footprint and the compliance burden.

Category 1
Purchased Goods & Services
For food and beverage brands, this is almost always the largest Scope 3 category — covering raw ingredients, packaging materials, and agricultural inputs. Grapes, grain, dairy — all of it lives here. Your retailers need this number from you.
High materiality
Category 4
Upstream Transportation & Distribution
Freight from vineyard to facility, bulk transport, cold-chain logistics. Wineries with regional sourcing have lower exposure here; brands importing internationally have significant Category 4 footprints.
Medium materiality
Category 5
Waste Generated in Operations
Pomace, lees, wastewater treatment, solid waste to landfill. Often underestimated — wineries generate significant organic waste with measurable methane potential if landfilled.
Medium materiality
Category 12
End-of-Life Treatment of Sold Products
Glass bottles are heavy and energy-intensive to produce and recycle. Aluminum cans fare better. No winery in the scored dataset discloses this — it is the universal SB 253 gap in the wine category.
High materiality
Category 2
Capital Goods
Equipment, tanks, barrels, facility investments. Typically one-time events amortized over asset life. Material for rapidly expanding producers; lower for stable operations.
Low — disclose if material
Category 3
Fuel & Energy-Related Activities
Upstream emissions from producing the energy used in operations. Calculated as a multiplier of Scope 1 and 2 consumption. Renewable energy purchasing reduces this significantly.
Calculated from Scope 1+2
Category 6
Business Travel
Flights, hotels, ground transport for staff. Typically low for small producers but increasingly tracked by major retailers in supplier questionnaires.
Usually immaterial
Category 7
Employee Commuting
Staff travel to work. Relevant for producers with large seasonal harvest workforces. Remote-based sales teams reduce this. Typically tracked via employee survey.
Usually immaterial
Categories 8–11, 13–15
Downstream & Financial Categories
Downstream leased assets, processing of sold products, use-phase emissions, franchises, investments. Most are not applicable for independent wine and food producers. Disclose as N/A with reasoning.
Typically N/A
The Costco effect

How a $240B retailer's compliance
becomes your problem

Costco Wholesale had $240B in revenue in FY2024. They are firmly in scope for SB 253. Their Scope 3 Category 1 requires emissions data from every significant supplier. This is how the obligation flows downstream.

CAL
California SB 253
Requires companies with $1B+ revenue doing business in California to disclose Scope 1, 2, and 3 emissions publicly. First Scope 3 report: August 2027.
↓
$240B
Costco — In scope
Must disclose Scope 3 Category 1 (purchased goods). This requires emissions factors for every product they buy — including your SKUs.
↓
YOU
Your brand — not in scope, but affected
Costco needs your Category 1 emissions per unit. If you can't provide it, they estimate using EEIO database averages — which typically run 30–60% higher than actual supplier data.
Risk: estimated emissions used
↓
QST
Supplier questionnaires — already happening
Major retailers are distributing supplier sustainability surveys now. Costco's 2025 supplier questionnaire asks for GHG data. The brands who answer get preferred status. The brands who can't, get flagged.
Risk — Do nothing
Costco uses EEIO estimates for your product. Your category shows inflated emissions in their disclosure. You become a compliance liability rather than an asset in their supplier evaluation. Delisting risk increases.
Risk — Partial disclosure only
You report Scope 1 and 2 but not Scope 3. Retailers accept this for now but it signals incompleteness. As disclosure expectations tighten through 2026–2027, partial data loses its protective value.
Opportunity — Full Scope 3 data provider
You provide measured Category 1 emissions per SKU, Category 4 freight data, and Category 12 packaging end-of-life. Your buyer's compliance burden drops. You become a preferred supplier by reducing their audit complexity — and your YKO score moves accordingly.
Opportunity — Early mover advantage
Most small food and wine brands will not have Scope 3 data by August 2027. Brands that do will have a differentiated value proposition with every retailer who needs it — not just Costco. Whole Foods, REI, Target, and Sprouts are all watching.
Roadmap for small brands & wineries

How to get to Scope 3 readiness
as a $5M–$50M producer

You don't need a dedicated sustainability team. You need a clear sequence, the right data sources, and someone to tell you what actually matters for your category.

1
Start here · 1–2 weeks
Get your Scope 1 and 2 numbers
Utility bills, propane or natural gas invoices, fuel for owned vehicles and equipment. This is the foundation — and it's nearly always possible from existing records. Most wineries can complete this in an afternoon with their bookkeeper.
Utility invoices Natural gas / propane Fleet fuel records Refrigerant logs
2
Within 30 days
Map your Category 1 inputs
List everything you buy that becomes product: grapes or fruit, glass bottles, corks or closures, labels, capsules, secondary packaging. Estimate tonnage for each input per year. You don't need emissions factors yet — the input list comes first. Procurement records almost always have this.
Grapes / fruit by source Glass tonnage Packaging materials Cleaning chemicals
3
Within 60 days · Most brands here now
Apply emission factors to your inputs
Convert your physical inputs to CO2e using published emission factors. GHG Protocol databases, EPA EEIO factors, and wine-specific factors from the Wine Institute and ADEME are publicly available. This is where YKO helps — we've mapped the relevant factors for food, beverage, and wine categories so you're not starting from scratch.
GHG Protocol factors EPA EEIO tables Wine Institute LCA data ADEME / ecoinvent
Within 90 days
Close the Category 12 packaging gap
Glass bottle end-of-life is the largest untracked Scope 3 category for wine producers. Calculate by volume sold × bottle weight × regional glass recycling rate × landfill emission factor. Most producers can estimate this with one data source: annual case sales and bottle weight specs.
Bottle weight (g) Annual case volume Regional recycling rate
Before your first retailer questionnaire
Package your disclosure for buyers
Produce a one-page supplier emissions summary: total Scope 1+2, Scope 3 categories covered, methodology statement, and data year. This is what Costco and major retailers actually need — not a full carbon management plan, just defensible, cited numbers they can pull into their disclosure without needing to estimate for you.
Emissions summary doc Methodology statement Data vintage year Third-party verification
Long term · 2026–2027
Move toward SBTi or third-party verification
Science Based Targets initiative (SBTi) approval is the gold standard for emissions commitments. It moves a brand from "disclosing" to "committed" — the highest tier in retailer evaluations and in YKO scoring. Verification by a qualified third party (Lloyd's Register, Bureau Veritas, SGS) adds defensibility if regulatory enforcement intensifies.
SBTi submission Third-party verification Annual reporting cadence
What YKO provides

The intelligence layer between
your data and your buyer's requirement

We don't do audits. We do the analysis work that makes an audit unnecessary at the small-brand scale — and we surface exactly where you stand relative to your category.

SB 253 Readiness Assessment
A structured gap map across all 15 Scope 3 categories: which apply to your business, what data you have, what's missing, and what your current compliance exposure is. Delivered as a working document you can use with buyers.
Category Emission Factor Library
Pre-mapped emission factors for food, beverage, wine, dairy, and apparel — sourced from GHG Protocol, EPA EEIO, Wine Institute LCA data, and ADEME. No starting from scratch. We give you the calculation templates.
Buyer-Ready Disclosure Package
A formatted supplier emissions summary document — the actual artifact that Costco, Whole Foods, and Target supplier questionnaires are asking for. Includes methodology statement, data vintage, and category coverage map.
Competitive Benchmarking
Your YKO score positions your brand against your category. See exactly where you land on all 6 dimensions — and which one single change would move your score the most. Used by brand sales teams in retailer conversations.
What's coming

Producer-level data, globally

The missing layer:
vineyard, farm, and facility data
Brand-level compliance is step one. The deeper problem — and the real intelligence opportunity — is producer-level data across the global supply chain. Wineries buy grapes from dozens of growers. Food brands source from farms across multiple countries. Each of those inputs carries its own emissions profile, water stress score, and certification status.
YKO is building the infrastructure to track producer-level sustainability data globally — starting with North American wine regions and California agricultural supply chains, then expanding to major producing regions in Europe, South America, and Oceania. The goal: give every brand the ability to tell their full story, not just the aggregate.
California wine regions Pacific Northwest Argentina · Chile France · Italy · Spain Australia · New Zealand South African cooperatives Southeast Asian commodity crops
15K+
Wineries in target regions
40+
Commodity crop categories
2027
Initial producer DB target
One offer

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Show your buyers.

A 30-minute intake call and your procurement records. We do the mapping, score your brand, benchmark your competitors, and give you a live page and a gap report — in 5 business days.

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