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This week, the U.S. Court of Appeals for the Ninth Circuit granted an injunction pausing enforcement of SB 261 (Stern; D-Sherman Oaks)—California’s climate-related financial risk disclosure mandate for companies with more than $500 million in revenue—while litigation continues. SB 261 would require covered entities to publicly report climate-related financial risks and mitigation strategies beginning in 2026.
SB 261 is one of two major climate-disclosure laws passed in 2023. The second, SB 253 (Wiener), mandates that companies with over $1 billion in annual revenue publicly disclose their Scope 1, 2, and eventually Scope 3 greenhouse gas emissions starting in 2026–2027. The Ninth Circuit’s order allows SB 253 to move forward for now, even as both laws remain under legal challenge.
CBPA extends our appreciation to the California Chamber of Commerce and the U.S. Chamber of Commerce for leading the coalition litigation effort challenging SB 253 and SB 261. Their leadership has been critical in highlighting the enormous compliance burdens, supply-chain impacts, and constitutional concerns raised by these laws.
The injunction on SB 261 provides meaningful relief for thousands of companies that were facing looming reporting deadlines while the underlying First Amendment and jurisdictional questions remain unresolved. The business community’s challenge continues as the case proceeds at the Ninth Circuit in 2026.
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