California climate bills SB 253 and SB 261 were sailing along towards implementation. Despite litigation challenging the laws, the lower courts initially refused to issue injunctions against them. Plaintiffs were appealing to the Supreme Court for an emergency injunction that seemed like a long shot. Then, somewhat unexpectedly, the Ninth Circuit Court of Appeals enjoined SB 261, staying the law pending the outcome of litigation. However, confusion remained as to whether this injunction applied to all in-scope companies, or only those parties to the lawsuit. The California Air Resources Board (CARB) clarified this week that it would not enforce SB 261 against any companies at this time. A recent Gibson Dunn memo discusses CARB’s statement:
“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.'”
SB 261 is now in limbo, meaning companies will not be required to report on climate-related financial risk. Its counterpart, SB 253, has not been enjoined and is still set to come into force. SB 253 requires disclosures of emissions data, and the first reports are due on August 10, 2026. It’s unclear if and when SB 261 will be enforceable, but if the law survives its court challenges, then we’ll likely hear more from CARB regarding compliance timelines.
Our members can learn more about SB 261 and SB 253 here.
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