As previously reported, California’s SB 261 would have required U.S. companies (public and private), other than insurers, with more than $500 million in annual revenue that do business in California to publish their first climate-related financial risk report on or before January 1, 2026. See California’s Health and Safety Code Section 38533 (as adopted by Senate Bill 261 and subsequently amended).
This is no longer the case:
- On November 18, 2025, the U.S. Court of Appeals for the Ninth Circuit enjoined the law pending an appeal by a coalition of leading business organizations challenging its constitutionality in the ongoing legal proceeding. The case is Chamber of Commerce of the United States et al. v. Sanchez et al., No. 25-5327 (9th Cir.).
- On December 1, 2025, the California Air Resources Board (“CARB”), the state agency responsible for enforcing SB 261, responded to the injunction by posting an enforcement advisory stating it would not enforce the law “against covered entities for failing to post and submit reports by the January 1, 2026, statutory deadline.” Instead, CARB “will provide further information—including an alternate date for reporting, as appropriate—after the appeal is resolved.”
This advisory resolves any question as to whether the court’s injunction applied only to the parties to the case and their members by stating that all in-scope companies are no longer expected to publish a climate-related risk report by the original January 1, 2026 deadline. CARB has posted a docket and instructions for companies who nonetheless wish to voluntarily submit a report.
Notably, the court did not enjoin California’s Health and Safety Code Section 38532 (as adopted by Senate Bill 253 and subsequently amended), which requires U.S. companies with more than $1 billion in annual revenue that do business in California to submit greenhouse gas emissions to the state beginning in 2026. CARB must establish the particular reporting deadline and has most recently proposed August 10, 2026.
Argument in the Chamber appeal is set for January 9, 2026. In the meantime, companies should continue to monitor the ongoing litigation and CARB website for further developments on both laws. We will also cover all of these and any future related developments in our monthly ESG: Risk, Litigation, and Reporting Updates.
Gibson Dunn’s lawyers are available to assist with any questions you may have regarding these developments. To learn more, please contact the Gibson Dunn lawyer with whom you usually work, any leader or member of the firm’s Securities Regulation and Corporate Governance or Environmental, Social and Governance practice groups.