The Ninth Circuit Court of Appeals has stayed California SB 261 California’s Climate-Related Financial Risk Disclosure Act pending appeal of the district court’s denial of a preliminary injunction. As a result, covered companies do not need to comply with SB 261’s climate-related risk disclosure requirement, which had a reporting deadline of January 1, 2026. The stay came shortly after the Chamber of Commerce filed an emergency petition with the United States Supreme Court. SB 261 mandates disclosure of climate-related financial risks, focusing on resilience and risk assessment. It applies to companies with over $500 million in annual revenues that do business in California. Companies will now need to decide whether it is in their best interest to report notwithstanding the injunction. That decision may vary depending on how far the company has progressed in gathering the applicable data, drafting the report, and weighing the opportunities and challenges that reporting would entail.

However, the Court of Appeals denied a stay of SB 253, the Climate Corporate Data Accountability Act. The Court of Appeals provided no reasoning, but it may be that the court reasoned that it lacked sufficient information to make a decision, given that the California Air Resources Board has not yet finalized implementing regulations or a reporting deadline. SB 253 requires annual disclosure of Scope 1 and Scope 2 emissions starting in 2026 and disclosure of Scope 3 emissions starting in 2027.

We will be following the court’s actions closely in the coming days and months and will continue to provide updates as they occur.