Dive Brief:
- The California Air Resources Board published an enforcement advisory on Senate Bill 261 on Monday, confirming a pause in its implementation following a preliminary injunction the U.S. Court of Appeals for the Ninth Circuit issued last month.
- CARB said due to the appeals court’s decision on SB 261 — which requires large businesses operating in California to publicly disclose their climate-related financial risks — it would not enforce the law against covered entities that fail to submit their reports by the Jan. 1, 2026, statutory deadline.
- But the agency, which is tasked with enforcing the state’s climate disclosure rules, announced on the same day it had opened a public docket for entities that want to voluntarily submit their climate-related financial risk reports as outlined under SB 261.
Dive Insight:
SB 261, or the Climate-related Financial Risk Act, requires business entities with revenues exceeding $500 million to publicly disclose their climate-related financial risks and countermeasures. 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.
Both climate disclosure rules were signed into law in October 2023 by California Gov. Gavin Newsom.
CARB said in its enforcement advisory that it would provide further guidance to stakeholders, including an alternate reporting date, once the appeal being considered by the Ninth Circuit is resolved.
The federal appeals court’s Nov. 18 decision to halt enforcement of SB 261 came after the U.S. Chamber of Commerce and other business groups filed an emergency application with the U.S. Supreme Court. The Ninth Circuit initially denied a request for a preliminary injunction to pause both climate laws prior to their implementation and said it would hear the case next year. The emergency application, filed earlier last month, asked the nation’s top court to stop enforcement of SB 261 and SB 253, pending the outcome of their appeal filed in the appellate court.
Though the group requested for the 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 said it would allow enforcement of SB 253 to proceed.
Arguments in the appeal are scheduled for Jan. 9, 2026, after companies complying with SB 261 were expected to submit their reports on climate-related financial risks.
In its Dec. 1 notice announcing the public docket, CARB asked companies to follow a naming convention when submitting their voluntary reports and to provide a consolidated report that included subsidiaries. The agency also said the climate-related financial risk reports should be posted on companies’ websites and be made publicly available.
