Ninth Circuit halts California SB 261 climate disclosure enforcement

On November 18 2025, the Ninth Circuit Court of Appeals issued an injunction halting CARB's enforcement of California SB 261, removing the January 1 2026 climate-risk reporting deadline, while SB 253 emissions reporting was extended to August 10 2026. Indian companies doing business in California must maintain flexible data systems amid heightened regulatory uncertainty.

On November 18 2025, the Ninth Circuit Court of Appeals issued an injunction halting the California Air Resources Board's enforcement of Senate Bill 261, which requires companies exceeding $500 million in revenue to disclose climate-related financial risks. The injunction, granted without explanation, removes the January 1 2026 reporting deadline and stems from a challenge by the U.S. Chamber of Commerce and business groups arguing SB 261 and SB 253 are unconstitutional. CARB separately extended SB 253 Scope 1 and Scope 2 reporting from June 30 2026 to August 10 2026.

Companies with over $500 million revenue 'doing business in California' are affected by SB 261, while SB 253 covers Scope 1, 2 and eventually Scope 3 emissions reporting. The 'doing business' criteria include entities whose California sales exceeded $735,019 or 25% of total sales; revenue uses 'gross receipts' including consolidated subsidiary revenue for unitary-business filers. Non-profits, government entities, and Department of Insurance-regulated companies are exempt. Indian multinationals with California operations fall within scope where thresholds are met.

Despite the SB 261 injunction, companies should continue preparing SB 261 content on governance, strategy and risk management, as CARB reaffirmed these requirements and allows early reporters to disclose gaps and assumptions. SB 253 filers must prepare for the August 10 2026 Scope 1 and Scope 2 deadline. Firms not collecting emissions data when the December 2024 enforcement notice issued may submit a formal statement instead of a report in 2026 under CARB's enforcement discretion. Maintain flexible data systems amid the ongoing appeal.

Key figure — SB 253 deadline: initial Scope 1 and Scope 2 reporting moved to August 10 2026