Ninth Circuit Halts California Climate Risk Disclosure Law
The appeals court kept a freeze on SB 261 while allowing part of the companion emissions reporting law SB 253 to proceed.
Updated on Nov. 9, 2026 in Public Companies
The Ninth Circuit ruled Monday to preserve the freeze on California's climate risk disclosure law SB 261, which requires biennial reports on financial risks from climate change. The court allowed part of the companion law SB 253 to proceed, keeping direct and purchased-energy emissions reporting in effect.
Why it matters
Companies doing business in California face a split regime: emissions reporting under SB 253 continues while climate financial risk reporting under SB 261 remains on hold. The ruling shapes how public companies prepare disclosures in the state.
The Ninth Circuit kept SB 261 halted while letting SB 253 proceed for direct and purchased-energy emissions reporting. The court signaled that SB 253's requirement to disclose indirect supply-chain emissions is likely unconstitutional, a question the extraction does not resolve further.
The players
Ninth Circuit Court of Appeals
The federal appeals court whose ruling determined which parts of California's climate disclosure laws may take effect while litigation continues.
The details
The Ninth Circuit ruled on Monday, November 9, 2026, leaving SB 261 halted while allowing SB 253 to remain in effect for direct and purchased-energy emissions reporting. The panel's ruling indicates the indirect supply-chain disclosure requirement in SB 253 is likely unconstitutional.
Timeline
• November 9, 2026: The Ninth Circuit issued its ruling on California's climate reporting laws.
Market Landscape
The split ruling on SB 253 and SB 261 places California's mandatory climate disclosure regime at the center of a national fight over how far states can require public companies to report emissions and climate risk. Companies operating in California must now track one reporting obligation while the other remains suspended.
Public companies with California operations must continue direct and purchased-energy emissions reporting under SB 253 while SB 261 climate risk reports are not currently required. Compliance teams should monitor the ongoing litigation for any change to the supply-chain disclosure requirement.
The takeaway
Companies in California should plan for a split compliance picture, since emissions reporting continues while climate risk disclosure is paused. Watching the pending litigation will determine whether the supply-chain requirement survives.
Further reading
Explore more on Public Companies coverage for California-specific corporate disclosure developments.
