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We continue to closely follow the litigation brought by the U.S. and California Chambers of Commerce, the American Farm Bureau Federation, the Los Angeles County Business Federation, the Central Valley Business Federation, and the Western Growers Association challenging California's climate disclosure laws — Senate Bill 253 (the Climate Corporate Data Accountability Act) and Senate Bill 261 (the Climate-Related Financial Risk Act). The plaintiffs have advanced several constitutional arguments, including First Amendment claims, and the challenge is now before the Ninth Circuit.
On November 18, 2025, the Ninth Circuit issued an emergency injunction staying enforcement of SB 261 while the appeal proceeds, but it declined to enjoin SB 253. In response, on December 1, 2025, CARB announced that it will not enforce SB 261's January 1, 2026, reporting deadline and will establish a new deadline after the appeal is resolved. Also on December 1, 2025, CARB opened a public docket for companies that wish to voluntarily submit SB 261 reports. Oral argument before the Ninth Circuit is currently scheduled for January 9, 2026. Although the Court may ultimately uphold SB 261, it is also possible that the law may be invalidated. This decision will ultimately determine both the timing and scope of the law's climate-risk reporting obligations.
In the meantime, companies subject to SB 253 should continue preparing for compliance, including developing emissions inventories and reporting systems in advance of the current August 10, 2026, deadline for submitting greenhouse gas emissions disclosures. Although SB 261 is temporarily on hold and its ultimate scope remains uncertain, companies would be well served to continue to internally consider their climate-risk assessments and governance frameworks. This approach preserves flexibility so that organizations are positioned to comply if the Ninth Circuit upholds the reporting requirements in whole or in part, or to adjust quickly if the Court substantially modifies or invalidates the law.
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