Companies must report under California’s climate disclosure laws SB 253 and SB 261, starting January 1, 2026. With reporting requirements imminent, legal challengers are throwing a “Hail Mary” to pause reporting pending the outcome of litigation. After being denied a preliminary injunction at both the trial and appellate levels, the U.S. Chamber of Commerce is attempting to appeal directly to the Supreme Court. ESG Today reports:
“In an emergency application filed with the Supreme Court, the Chamber of Commerce argued that the new laws violate First Amendment free speech rights by compelling companies ‘to speak on the deeply controversial topic of climate change.’… the group argued that the case is likely to succeed on its merits, contending that the new laws compel speech on a controversial climate topic – noting that California lawmakers have stated that the laws aim to embarrass companies into taking climate action – and that the state will fail in treating the mandated climate reporting as ‘commercial speech,’ which would have a lower First Amendment threshold.
The Supreme Court’s decision on the emergency injunction will not be dispositive of the legitimacy of the California laws. It will only determine whether the laws will be allowed to go into effect pending the outcome of the trial court’s proceedings. Regardless of the Supreme Court’s actions, a trial will be held in January to determine the constitutionality of the laws. Though the outcome of that trial is likely to be appealed as well. We may still be a ways off from knowing the future of California’s climate reporting laws, but decisions in the coming weeks will have a major impact on in-scope companies.
Our members can learn more about California’s climate disclosure laws here. Members also have access to our Generic Climate Change Sample Disclosure created and vetted by PracticalESG and TheCorporateCounsel.net staff to help you in crafting or reviewing your own draft disclosure.
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