A federal appeals court granted an injunction against one of California’s climate reporting laws. The Chamber of Commerce and other business groups have challenged the laws on First Amendment grounds and have sought to block implementation of the laws while their lawsuit proceeds.
On August 18, 2025, the Ninth Circuit Court of Appeals granted a request from the Chamber of Commerce for an injunction against SB 261, known as the Climate-Related Financial Risk Act, but denied a request for an injunction against SB 253, known as known as the Climate Corporate Data Accountability Act.
SB 261 requires companies with annual revenue of more than $500 million and that do business in California to disclose publicly the climate-related financial risks to their company and how they will address them. (see Climate Reporting Laws: Comparison of Key Provisions.)
SB 261 was scheduled to take effect January 1, 2026. SB 253 is still in effect, and its scope 1 and scope 2 emissions reporting requirements are scheduled to take effect in June 2026.
Ongoing Challenge
The Ninth Circuit injunction is the latest legal development in an ongoing challenge that began in January 2024. A coalition of business groups contend that the laws violate the First Amendment by compelling speech on a “politically controversial” topic and that the Clean Air Act preempts California’s “de facto regulations of greenhouse-gas emissions nationwide.”
In November 2024, the court denied a motion for summary judgment from the groups on their claim that the laws violate the First Amendment. In February 2025, the court dismissed the claims that the Clean Air Act preempts the two laws and that the laws burden interstate commerce.
In August 2025, a U.S. district judge denied a motion for a preliminary injunction against the two laws on First Amendment grounds. More recently, on November 15, 2025, the groups filed an emergency appeal to the U.S. Supreme Court, requesting that it put California’s climate reporting laws on hold while legal challenges continue.