What's Happening?
The U.S. Court of Appeals for the Ninth Circuit has halted the implementation of California's Senate Bill 261, which mandates business entities with revenues exceeding $500 million to disclose their climate-related
financial risks and countermeasures. This decision follows an emergency application filed by the U.S. Chamber of Commerce and other business groups with the U.S. Supreme Court. The Ninth Circuit initially denied a request for a preliminary injunction to pause two complementary climate reporting laws but agreed to hear the case next year. The court's decision allows enforcement of another climate disclosure law, SB 253, to proceed. SB 261 is part of the California Climate Accountability Package, which includes SB 253, requiring businesses with annual revenues over $1 billion to report their greenhouse emissions.
Why It's Important?
The Ninth Circuit's decision to block SB 261's implementation is significant as it addresses concerns about the constitutionality and economic impact of California's climate disclosure laws. The U.S. Chamber of Commerce argues that these laws impose massive compliance costs on companies and their supply chains, potentially affecting businesses nationwide. The ruling highlights the tension between state-level environmental regulations and national business interests, with implications for how climate-related financial risks are managed and reported. The decision may influence future legislative efforts and legal challenges related to environmental accountability and corporate transparency.
What's Next?
The case will be heard by the Ninth Circuit next year, which could lead to further legal battles over the enforcement of California's climate disclosure laws. Companies covered by SB 261 are expected to submit their reports on climate-related risks by January 1, 2026, while SB 253 requires emissions reporting starting in 2026. The California Air Resources Board continues to develop and enforce these rules, holding public workshops to support their implementation. The outcome of the appeal could set a precedent for other states considering similar environmental regulations, impacting how businesses nationwide approach climate risk disclosure.
