Enacted in 2023 as part of the California Climate Accountability Package, Senate Bill 261 was originally expected to require covered businesses to begin making climate-related financial risk disclosures as early as January 1, 2026. However, legal challenges and regulatory delays have left that deadline in the past without any mandatory disclosures being required. Similarly, the California Air Resources Board (CARB) deferred Senate Bill 253’s climate disclosure reporting requirements by three months, further postponing implementation of California’s climate disclosure requirements. As a result, businesses continue to face significant uncertainty regarding both their disclosure obligations and compliance deadlines. Despite this uncertainty, due to the scope of the disclosure requirements and time required to gather necessary data, businesses should continue preparing for compliance.
Status of California’s Climate Disclosure LawsSenate Bill 261 (the Climate-Related Financial Risk Act) originally required companies doing business in California and generating more than $500 million in annual revenues to disclose their climate-related financial risks and information on how the company is addressing such risks by January 1, 2026. However, that date passed without mandatory regulatory reporting due to legal challenges and regulatory delays.
In November 2025, the Ninth Circuit enjoined enforcement of SB 261 in Chamber of Commerce v. Sanchez, Case No. 25-5227, a case challenging the climate disclosure laws on constitutional grounds. As a result of the Ninth Circuit ruling, in December 2025, CARB issued an Enforcement Advisory stating that it will not enforce the law against covered entities for failing to report. To date, CARB has not established a new mandatory reporting deadline. Instead, entities have the option to voluntarily report.
Senate Bill 253 (the Climate Corporate Data Accountability Act) has faced similar delays. The law requires companies doing business in California and generating more than $1 billion in annual revenues to publicly disclose Scope 1 and Scope 2 greenhouse gas emissions this year and Scope 3 emissions in 2027. Companies face penalties up to $500,000 per reporting year for failure to comply.
Companies expected to begin reporting their initial Scope 1 and Scope 2 greenhouse gas emissions by August 10, 2026. However, on June 24, 2026, CARB announced that it intends to extend the reporting deadline to November 10, 2026, while it makes targeted revisions to its proposed implementing regulations. CARB intends the three-month deferral to provide reporting businesses with additional time to prepare their disclosures after the regulations become final.
Key Takeaways
California’s climate reporting laws are on hold, but not invalidated. The pending legal challenges will certainly shape the future of California’s climate disclosure requirements and could impact other states developing similar disclosure requirements, such as New York. CARB’s three-month reporting extension provides additional time for the Ninth Circuit to rule on the pending constitutional challenges currently before it. Despite this uncertainty, covered businesses should continue preparing for compliance. Companies should also carefully monitor developments from both CARB and the Ninth Circuit because upcoming regulatory requirements and judicial decisions will determine the scope, timing and viability of California’s climate disclosure requirements.
