California Climate Disclosure Laws: Ninth Circuit Temporarily Pauses Climate Risk Reporting Law (SB-261)

The Ninth Circuit today issued an order temporarily pausing California’s biennial climate risk reporting law (SB-261), the first reports under which are due January 1, 2026. The order does NOT similarly halt the annual GHG emissions reporting law (SB-253), which requires reporting later in 2026. During the California Air Resources Board’s (CARB) public workshop today, staff proposed an August 10, 2026 reporting deadline for SB-253, delayed from the initial June 30, 2026 date due to its rulemaking process extending into Q1 2026.

SB-261 requires public and private U.S. companies (other than insurance companies) that “do business” in California with total annual revenue in the prior fiscal year exceeding $500 million to post a climate-related financial risk report to their website by January 1, 2026, with biennial updates thereafter (i.e., once every two years).

SB-253 requires public and private U.S. companies that “do business” in California with total annual revenue in the prior fiscal year exceeding $1 billion to annually report on Scopes 1 (direct) and 2 (indirect from purchased energy) GHG emissions (including third-party limited assurance over those metrics) beginning in 2026 covering fiscal year 2025 information and on Scope 3 (value chain) emissions beginning in 2027 covering fiscal year 2026 information, regardless of materiality.

Background

In August, the district court denied a preliminary injunction motion filed by a business coalition led by the U.S. Chamber of Commerce seeking to block both laws during the underlying First Amendment litigation.

In September, the coalition requested an injunction pending appeal from the Ninth Circuit, citing “imminent, irreparable harm” from the laws’ rapidly approaching compliance deadlines. The coalition requested a ruling by November 3 to allow time for potential U.S. Supreme Court review.

Today’s Ninth Circuit Ruling

The Ninth Circuit granted the coalition’s motion for an injunction pending appeal, but only for SB-261 (climate risk reporting). The motion was denied for SB-253 (GHG emissions reporting). SB-261 enforcement is now paused while the Ninth Circuit considers whether to reverse the district court’s August decision.

The case is scheduled for oral argument on January 9, 2026 — after the January 1 compliance date — though this date could change or the court could decide on the briefs. During today’s CARB workshop, staff indicated they are reviewing the order, and it remains unclear whether updated SB-261 guidance will be issued.

Coalition Response

The U.S. Chamber of Commerce welcomed today’s ruling, stating that “[s]topping this law before its January 1 deadline was critical to businesses and the protection of their First Amendment rights. We look forward to continuing our appeal and securing an injunction of both climate disclosure laws, which result in massive compliance costs for companies and their supply chains. One state should not have the ability to impose this kind of burden on the entire country.”

Withdrawal of Supreme Court Application

On November 10, the business coalition filed an emergency application with the U.S. Supreme Court seeking an injunction pending appeal for both laws. In light of today’s Ninth Circuit decision, the coalition withdrew the application “without prejudice to renewing their request for relief if necessary at a later stage of the litigation.”