On Tuesday, November 18, the U.S. Court of Appeals for the Ninth Circuit paused implementation of California’s Senate Bill 261, the Climate-related Financial Risk Act (SB 261), pending appeal.
SB 261 requires companies “doing business” in California with revenues exceeding $500 million, to publicly disclose their climate-related financial risks and countermeasures. This decision came days after the U.S. Chamber of Commerce and other business groups filed an emergency application with the U.S. Supreme Court, as entities covered by SB 261 are expected to submit their reports on climate-related risks by January 1, 2026. The plaintiffs withdrew the emergency appeal to the Supreme Court, citing the Ninth Circuit’s decision.
The law is part of the California Climate Accountability Package, which also includes SB 253, or the Climate Corporate Data Accountability Act. SB 253 requires business entities operating in California with annual revenues exceeding $1 billion to annually report their greenhouse emissions. Though the plaintiffs requested implementation of both climate disclosure laws to be halted, the Ninth Circuit only granted the motion for injunction pending appeal to the enforcement of SB 261 and allowed enforcement of SB 253, to proceed. The one-page decision came out the same day the California Air Resources Board held a public workshop in which it provided additional guidance on SB 261 and SB 253 and answered questions regarding its implementation.
Lindsay Buckley, a spokesperson for the California Air Resources Board, which is drafting rules to implement the laws, said the agency was reviewing the ruling and could not comment further.
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