Executive Summary
- What’s new: On November 18, 2025, the Ninth Circuit granted an injunction pending appeal staying the enforcement of a California law requiring certain companies to publish a climate risk report.
- Why it matters: The law, SB 261, would have otherwise required such reports to be publicly disclosed by January 1, 2026.
- What to do next: The Ninth Circuit did not stay a second California disclosure law, SB 253, that requires certain companies to disclose their Scope 1 and 2 greenhouse gas emissions by a yet-undetermined date in 2026. Since the Ninth Circuit declined to also stay SB 253, companies should continue to plan for compliance with that law.
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On November 18, 2025, the U.S. Court of Appeals for the Ninth Circuit granted an injunction pending appeal, which stays enforcement of California Senate Bill 261 (Greenhouse Gases: Climate-Related Financial Risk) (SB 261). The law requires certain companies to publicly publish a report identifying their financial risks associated with climate change and their efforts to mitigate such risks.1
The plaintiffs, including the U.S. Chamber of Commerce, California Chamber of Commerce, American Farm Bureau Federation and other business groups, sued the California Air Resources Board (CARB) in January 2024.
The business groups challenged SB 261 as well as California Senate Bill 253 (Climate Corporate Data Accountability Act) (SB 253) on multiple grounds, including the First Amendment, federal preemption and extraterritoriality. Early in the case, the court dismissed the Supremacy Clause and extraterritoriality claims and deferred a motion for summary judgment on the First Amendment claim until after discovery.
Subsequently, the business groups sought a preliminary injunction to block enforcement of SB 253 and SB 261 on First Amendment grounds. On August 13, 2025, the U.S. District Court for the Central District of California denied a motion for an injunction pending resolution of the legal challenge to the laws.2
Next, the plaintiffs appealed to the Ninth Circuit and sought an injunction pending appeal. After that injunction was denied, the plaintiffs filed an Emergency Application for Injunction Pending Appeal with the U.S. Supreme Court on November 14, 2025.
Before the Supreme Court ruled, the Ninth Circuit issued an injunction. No opinion was issued, and the court’s two-sentence order stated that:
The motion for injunction pending appeal (Dkt. No. 6) is GRANTED IN PART and DENIED IN PART. The motion is granted as to the enforcement of Senate Bill 261 and denied as to the enforcement of Senate Bill 253.
On the same day, the plaintiffs withdrew their application for an emergency stay from the Supreme Court.3
Scope of the Injunction
The plaintiffs requested an injunction against enforcing SB 253 or 261 “as to their members” or against “[p]laintiffs’ members pending resolution of appeal.” The injunction, as requested, would apply to members of any of the organizations that signed on as plaintiffs.
Nevertheless, the Ninth Circuit did not limit the injunction to enforcement against members of the plaintiff organizations. And given that the U.S. Chamber of Commerce alone has an estimated 300,000 members, it seems unlikely that the law will be enforced against any covered entity pending resolution of the plaintiffs’ appeal.
SB 253 – The Waiting Game Continues for Implementing Regulations
CARB still has not issued the regulations implementing SB 253, but it is expected to continue the rulemaking process. Those regulations are anticipated to provide clarity on important questions about the applicability of the law, including:
- What it means to be “doing business in California.”
- How the revenue thresholds will be applied, particularly in the context of parent corporations that are not doing in business in California and have organization-wide revenues above the thresholds, but have subsidiaries that are doing business in California and have revenues below the statutory thresholds.
For now, companies should consider CARB’s FAQ, which were updated on November 17, 2025.
The lack of clarity on these fundamental questions has been a source of uncertainty for companies. Whether companies will be required to disclose their greenhouse gas emissions in 2026 will likely depend on the Ninth Circuit’s ultimate resolution of the plaintiff’s appeal.
The appeal is set for hearing in January 2026. Unless it is successful, it appears that SB 253 remains on track to require certain companies to disclose their greenhouse gas emissions sometime in 2026.
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1 We discussed the proposed legislation in our October 28, 2024, client alert “State of Play: California Amends Climate Disclosure Rules” and our September 26, 2023, client alert “California Poised To Adopt Sweeping Climate Disclosure Rules.”
2 We discussed the denial of the injunction in our August 19, 2025, client alert “Injunction To Block California Environmental Disclosure Laws Denied.”
3 It appears the application was withdrawn in its entirety, notwithstanding that the Ninth Circuit did not enjoin enforcement of SB 253, and the emergency application applied to both laws.
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