A federal appeals court has temporarily blocked a pair of flagship California emissions reporting laws, introducing significant uncertainty for companies preparing to comply with the landmark requirements.
On November 18 the U.S. Court of Appeals for the Ninth Circuit issued an injunction preventing enforcement of SB 261, a statute that would have required large businesses operating in California to publicly disclose every two years how climate change might affect their finances.
Under SB 261, companies with revenues exceeding $500 million doing business in the state would have been required to report by January 1, 2026.
The injunction, issued without explanation, halts the law’s implementation while the court reviews the appeal.
At the same time, the companion measure (SB 253), which obliges firms with annual revenues over $1 billion to report greenhouse-gas emissions (including so-called Scope 3 emissions) remains in effect for now, since the court declined to block it.
Business groups, led by the U.S. Chamber of Commerce, applauded the ruling, arguing that the law infringed companies’ First Amendment rights and would impose burdensome compliance costs.
California regulators, meanwhile, say that the laws reflect standard financial-disclosure norms and do not compel ideological speech.
For the roughly 4,100 companies that had expected to prepare risk-reports under SB 261, the injunction creates ambiguity: whether a delayed deadline will follow, or whether state regulators may adjust their timeline, remains unclear.
The outcome is being closely watched as a barometer of how far states may go in mandating climate-related disclosures, and whether such mandates survive constitutional challenge.
Read more: Why Is Exxon Suing California Over Climate Disclosure Rules?
