California Climate Disclosures: A Guide for the Aviation Sector

California’s SB 253 and SB 261 require large companies to disclose greenhouse gas emissions and climate risks starting in 2026. Despite delayed regulations, these deadlines are firm, and California Air Resources Board (CARB) expects good faith compliance. California leads U.S. corporate climate transparency efforts ^1,2.

This guide covers:

• What Are the California Sustainability Disclosure Standards?
• Who Is Impacted?
• Key Milestones and Reporting Timeline for California’s Climate Disclosures
• What Still Needs to Be Finalised by CARB?
• How does it align with Global Standards?
• How to Prepare for California’s Climate Disclosures?
• Aviation Sector Considerations

What Are the California Sustainability Disclosure Standards?

California’s sustainability disclosure standards are established primarily by two landmark laws:

• SB 253 (Climate Corporate Data Accountability Act): Requires large U.S.-based companies with over $1 billion in annual revenue doing business in California to publicly disclose annual greenhouse gas (GHG) emissions, including Scope 1 (direct emissions), Scope 2 (indirect emissions from purchased electricity), starting with 2026 reports (covering 2025 data), and Scope 3 (value chain) emissions beginning with 2027 reports (covering 2026 data). These reports must be assurance-ready and submitted on a platform designated by the California Air Resources Board (CARB) ^1,3,4.
• SB 261 (Climate-Related Financial Risk Act): Mandates companies with revenues over $500 million to report biennially on climate-related financial risks and mitigation/adaptation strategies aligned with the Task Force on Climate-Related Financial Disclosures (TCFD) or a comparable framework, beginning January 1, 2026 ^1,2,8.

CARB is the implementing and enforcing agency responsible for developing detailed regulations, defining the reporting platform, and overseeing compliance. Although CARB has delayed finalising the regulatory framework beyond the original July 2025 deadline, the statutory deadlines remain firm and enforceable. CARB has emphasised that companies demonstrating good faith efforts in their disclosures during early enforcement phases will not face penalties in 2026 ^2,3,4,5.

Who Is Impacted?

These laws apply to companies doing business in California with the following revenue thresholds:

• For SB 253, U.S.-based public and private companies, subsidiaries, partnerships, or other entities with annual revenues exceeding $1 billion must publicly report detailed GHG emissions covering Scopes 1, 2, and 3 ^3,5.
• For SB 261, companies with annual revenues above $500 million must publicly disclose biennially their climate-related financial risks, mitigation, and adaptation measures 12.
  The definition of “doing business in California” generally aligns with California Revenue & Taxation Code §23101, including meeting thresholds based on sales, property, or payroll in California or conducting financial transactions for gain within the state ⁵.

There are no specific carve-outs or exemptions for the aviation sector; thus, airlines and aviation companies meeting these revenue and operational criteria must comply fully. This involves comprehensive emissions reporting and climate risk disclosures in line with the laws ^1,3.

Key Milestones and Reporting Timeline for California’s Climate Disclosures

• July 1, 2025 (Missed Deadline): CARB was statutorily required to finalise implementing regulations for SB 253 by this date but missed it. Now, draft regulations are expected by the end of 2025, with final rules possibly adopted in late 2026 ^1,2,3,6.
• January 1, 2026: The first biennial climate-related financial risk disclosures as mandated by SB 261 are due. Companies with revenues over $500 million doing business in California must publicly report on climate risks and mitigation aligned with TCFD or equivalent standards ^1,2,3,8.
• 2026 (Exact Date To Be Announced): Reporting of 2025 Scope 1 (direct) and Scope 2 (indirect from purchased electricity) GHG emissions under SB 253 begins. CARB has not yet set specific submission deadlines within 2026 but affirms reporting will occur that year. Companies should prepare for filings accordingly ^1,2,3,4.
• 2027: Reporting of 2026 Scope 3 emissions (value-chain emissions upstream and downstream in the company’s value chain) under SB 253 begins ^1,3,4.
• 2026 Enforcement Notice: CARB confirmed in a December 2024 enforcement notice and reiterated in 2025 workshops and FAQs that no penalties will be imposed in 2026 if companies demonstrate good faith efforts in preparing and submitting their SB 253 disclosures ^3,4.

What Still Needs to Be Finalised by CARB?

Implementing Regulations for SB 253 that specify:

• Detailed reporting deadlines within 2026 and subsequent years.
• Reporting formats, data fields, and definitions (e.g., “doing business in California,” organisational boundaries).
• Verification and assurance requirements, including third-party independent validation standards.
• Disclosure platform details for public access to reports.
• Enforcement mechanisms and penalties for noncompliance (with good faith grace period in 2026)^1,2,3,5.

Guidance or Regulations for SB 261:

While formal regulations are not explicitly required, CARB must issue guidance or rules to:

• Define content, format, submission, and timing of climate-related financial risk disclosures.
• Establish a public registry or docket by December 1, 2025, to host links to these disclosures ^1,2,6.

Reporting Platforms: Technical and administrative infrastructure for public disclosure must be finalised and operational by late 2025 or early 2026 ^1,2,4.

Ongoing Stakeholder Engagement: CARB continues public workshops and consultations throughout 2025 and 2026 to finalise these frameworks^1,3.

How does it align with Global Standards?

California’s SB 253 and SB 261 climate disclosure requirements also align closely with the International Sustainability Standards Board’s (ISSB) global IFRS S1 and IFRS S2 standards, which form an international baseline for sustainability and climate-related financial reporting ⁷.

IFRS S1 sets out overarching principles for sustainability-related financial disclosures, while IFRS S2 focuses on climate-related reporting covering governance, strategy, risk management, metrics, and targets. Both emphasise transparency, comparability, and assurance-readiness, reflecting California’s similar phased requirements and TCFD alignment. IFRS S2 has been effective since January 2024, helping global companies provide consistent, decision-useful climate disclosures comparable to those mandated by California laws.