Ninth Circuit Temporarily Blocks California Climate Risk Disclosure Law (SB 261) While Allowing Greenhouse Gas Reporting Law (SB 253) to Proceed

On November 18, 2025, the US Court of Appeals for the Ninth Circuit issued an order temporarily enjoining enforcement of California’s Climate-Related Financial Risk Act (SB 261), which requires public and private companies that do business in California and have annual gross revenues over US$500 million to publicly disclose their climate-related financial risks and mitigation strategies. The injunction was granted pending appeal by a coalition of business groups challenging the law on First Amendment grounds. The Ninth Circuit’s order prevents the state from enforcing SB 261 while the litigation continues, with oral arguments scheduled for January 9, 2026. The first disclosure deadline under the bill was previously set for January 1, 2026.

The Ninth Circuit denied the business groups’ request for a similar injunction against California’s Climate Corporate Data Accountability Act (SB 253), which mandates disclosure of greenhouse gas emissions by public and private companies that do business in California and have annual gross revenues above US$1 billion. SB 253 is scheduled to take effect later in 2026. The exact timing remains uncertain while the California Air Resources Board (CARB) continues to develop its implementing regulations, but CARB recently announced a tentative initial reporting deadline under SB 253 of August 10, 2026. 

The Ninth Circuit did not provide an explanation for its decision in the one-page order. The plaintiffs, including the Chamber of Commerce of the United States of America and various state chambers of commerce and industry groups, initiated legal proceedings against the state in January 2024, asserting that the disclosure requirements under SB 253 and SB 261 compel speech on a contentious issue and thereby violate First Amendment rights. The US District Court for the Central District of California dismissed the majority of the plaintiffs’ claims in February, as discussed in our prior alert, and the plaintiffs appealed the dismissal to the Ninth Circuit.

Following the Ninth Circuit’s order, the plaintiffs withdrew a pending emergency application to the US Supreme Court seeking to block enforcement of the laws.

The Ninth Circuit’s injunction as to SB 261, and its denial of an injunction as to SB 253, leave the future of California’s climate disclosure regime uncertain. Companies subject to these laws should closely monitor developments and prepare for potential compliance obligations as the litigation proceeds.