Court Ruling Clears Path For California's Climate Disclosure Laws

On September 11, 2025, a California federal court denied business groups' request to enjoin two California climate disclosure laws pending their appeal to the Ninth Circuit from the court's earlier denial of their request for an injunction.

Plaintiffs the U.S. and California Chambers of Commerce as well as the American Farm Bureau Federation, Los Angeles County Business Federation, Central Valley Business Federation, and Western Growers Association brought the action challenging California's two climate disclosure laws, Senate Bill 253 (the Climate Corporate Data Accountability Act) and Senate Bill 261 (the Climate-Related Financial Risk Act), on constitutional grounds including the First Amendment. Adopted in October 2023, these laws require large businesses doing business in California to disclose their greenhouse gas emissions (SB 253) and their climate-related financial risk (SB 261). The first compliance deadline for disclosure (SB 261) is fast approaching on January 1, 2026.

The plaintiffs moved for an injunction pending their appeal of the court's August 20 denial of their motion for preliminary injunction. U.S. District Court Judge Otis D. Wright II denied this new effort to block the climate disclosure laws finding that the plaintiffs (1) did not raise "serious questions going to the merits" based on their inability to demonstrate a likelihood of success on the merits and (2) failed to show that a balance of hardships tipped sharply in their favor.

For now, businesses should expect to comply with California's climate disclosure requirements. Businesses should be diligently developing a compliance plan, including gathering information to comply with the laws and becoming familiar with the California Air Resources Board's September 2nd reporting guidance under SB 261.

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