Court Halts California Climate-Risk Reporting Rule
Companies covered by California's climate laws must still report direct emissions while SB 261 risk disclosures stay on hold.
Updated on Nov. 9, 2026 in Public Companies
The Ninth Circuit Court of Appeals on Monday, November 9, 2026, blocked enforcement of California's SB 261, a law requiring biennial reports on financial risks from climate change, while allowing part of SB 253's greenhouse gas emissions reporting requirement to proceed. Companies doing business in California face a split outcome, with direct and purchased-energy emissions reporting still in effect under SB 253.
Why it matters
The split ruling leaves businesses with a mixed compliance picture: climate-risk disclosure under SB 261 remains halted, while emissions reporting under SB 253 continues. The court's view that SB 253's indirect supply-chain disclosure requirement is likely unconstitutional signals that the scope of California's climate reporting mandates may narrow further.
The extraction provides no quantitative figures, dollar amounts, or company counts associated with the ruling. The reporting requirements apply to direct and purchased-energy emissions under SB 253 and to biennial climate-risk reports under SB 261.
The players
Ninth Circuit Court of Appeals
The federal appellate court that issued the ruling blocking SB 261 and allowing part of SB 253 to proceed.
The details
SB 253 requires companies to report direct and purchased-energy greenhouse gas emissions, and that requirement remains in effect following the ruling. SB 261 requires biennial reports on financial risks from climate change, and its enforcement is halted pending the litigation. The court found that SB 253's requirement to disclose indirect supply-chain emissions is likely unconstitutional, which would remove that obligation from the reporting regime if the finding holds.
Timeline
November 9, 2026: Ninth Circuit issues its ruling on California's climate reporting laws.
Market Landscape
California's SB 253 and SB 261 are among the first state-level climate disclosure mandates to face direct federal appellate review. The partial ruling sets an early precedent on how far state climate reporting requirements can reach into supply-chain data.
Companies subject to SB 253 should continue preparing direct and purchased-energy emissions reporting, since that requirement remains in effect. Finance and legal teams should consult qualified counsel on whether any supply-chain reporting obligations are affected by the likely unconstitutionality finding.
The takeaway
The ruling leaves SB 253's direct and purchased-energy reporting in force while the broader SB 261 climate-risk disclosure is paused. Operators should track the litigation's next rulings and route compliance-scope questions to qualified counsel.
Further reading
For context on how these disclosure rules affect listed firms, see Public Companies coverage.
