The Ninth Circuit Court of Appeals issued an injunction blocking enforcement of California’s Climate-related Financial Risk Act (SB 261), which has a statutory deadline of January 1, 2026. SB 261 requires companies doing business in California with revenues that exceed $500 million to submit biennial public climate-related financial risk reports to the state beginning January 1, 2026. The Court’s injunction means that SB 261 cannot be enforced while the appeal is pending. Arguments for the appeal are set for January 9, 2026. 

As a result, the California Air Resources Board (CARB) issued an enforcement advisory stating that the agency will not take enforcement action against covered entities for failing to post and submit reports by the January 1, 2026, statutory deadline. CARB will provide further information (including an alternate date for reporting) once the appeal is resolved. Meanwhile, CARB has opened a public docket for entities that may choose to voluntarily submit their Climate-Related Financial Risk Reports while the injunction is in effect. 

The case being considered is brought by the U.S. Chamber of Commerce, which is challenging the constitutionality of SB 261 and SB 253 (which requires companies with revenues that exceed $1 billion and do business in California to report their Scope 1, 2, and 3 emissions).The Court did not enjoin SB 253, likely because its first reporting deadline falls later in 2026. As ISPA previously reported, CARB is behind its rulemaking timeline for SB 261 and SB 253.  

On December 9, CARB announced a public hearing scheduled for February 26, 2026. During this hearing, the draft regulations for SB 261 and SB 253 will be considered for approval. The public comment period for this regulatory action will begin on December 26, 2025, and close on February 9, 2026. Interested members of the public may present comments orally or in writing during the February 26th hearing. The draft regulations contain key definitions, including CARB’s interpretation of what it means to be “doing business in California.”  

ISPA anticipates more developments related to both SB 261 and SB 253 in the near future and will keep its membership apprised of any significant updates.