Ninth Circuit Denies Request to Block California Climate Acts

If you were hoping for a clean, dramatic courtroom momentgavel slam, sweeping music, instant claritywelcome to the
glamorous reality of climate-disclosure litigation: a split decision, a moving compliance target, and a whole lot of
spreadsheet therapy.

In a fast-moving dispute over California’s corporate climate disclosure laws, the U.S. Court of Appeals for the Ninth
Circuit refused to hit the big red “STOP” button for all of California’s climate “acts.” Instead, it drew a line:
it allowed one law to keep marching forward while temporarily halting enforcement of the other. In practical terms,
the request to block California’s climate acts was denied in partmeaning businesses still have real obligations on
the table, even while the legal fight continues.

What the Ninth Circuit actually did (and why it matters)

The legal headline can sound confusing because the dispute covers two separate California statutes that often get
discussed as a package. The challengersled by business groupsasked the Ninth Circuit for emergency relief to stop
enforcement while their appeal plays out. The court’s response was not “yes” or “no,” but “some of each.”

Here’s the plain-English version:

• SB 261 (climate-related financial risk reporting) was temporarily paused through an injunction pending appeal.
• SB 253 (greenhouse gas emissions reporting) was not pausedmeaning the court declined to block it.

That partial denial is the heart of this story. When a court denies a request to block a law, it doesn’t mean the
law is permanently “safe,” constitutional, or unstoppable. It usually means the challengers didn’t clear the high
bar required for emergency reliefespecially when the court is being asked to freeze a democratically enacted statute
before the full appeal is decided.

For companies, the takeaway is less philosophical and more operational: you may not have to file one kind of report
right now, but you still need to prepare for the otherand you need to do it while the legal and regulatory timelines
keep evolving.

Meet the two California “climate acts” at the center of the fight

California’s climate disclosure laws are often described as some of the most expansive state-level corporate climate
reporting requirements in the U.S. They target large companies “doing business” in California, including many that
are headquartered elsewhere. That reach is a big part of why the laws are both influential and controversial.

SB 253: Climate Corporate Data Accountability Act (emissions reporting)

SB 253 is the emissions lawthe one that’s still standing (for now) without an emergency judicial pause. It requires
certain large companies to publicly report greenhouse gas emissions using recognized reporting approaches and
standards.

The big idea: if you’re a covered company, you don’t just report what comes out of your own smokestacks. You’ll also
have to deal with indirect emissionselectricity use (Scope 2) and, over time, value chain emissions (Scope 3). Scope 3
is the part that can make even the most unflappable operations leader stare into the middle distance, because it can
include emissions tied to suppliers, logistics, business travel, and product use depending on the reporting boundary.

SB 253 is aimed at very large companies (generally tied to revenue thresholds) and requires annual reporting. In
other words: this is not a “nice-to-have sustainability page” exercise. It’s a structured disclosure obligation with
timing, methodology, and verification expectations that are meant to move corporate climate claims out of the realm
of vibes and into the realm of auditable numbers.

SB 261: Climate-Related Financial Risk Act (risk reporting)

SB 261 focuses on climate-related financial riskhow climate impacts could affect a company’s finances, strategy, and
risk management. Think of it as the narrative (and governance) cousin of emissions reporting: it asks covered companies
to explain what climate risks mean for the business and what they’re doing about it.

SB 261 contemplates a public report on a recurring schedule (every two years), and it leans on established climate
risk disclosure frameworks and concepts. This is where you’ll see discussions around physical risks (storms, heat,
floods, wildfire exposure) and transition risks (policy shifts, litigation, market changes, changing consumer behavior).

The key point for this moment: SB 261 was temporarily halted by the Ninth Circuit’s injunction pending appealso the
immediate “publish this by the next deadline” pressure was reduced. But a pause is not a repeal. A paused requirement
can come back fast, and companies that wait until the last minute often discover that climate risk reporting is not
something you can crank out between two earnings calls.

Why business groups sued: the core legal arguments

The challengers’ arguments are a familiar playlist in modern disclosure litigation, especially where climate policy
meets corporate speech. While the fine print varies, the themes tend to sound like this:

• Compelled speech / First Amendment concerns: The claim is that the laws force companies to publish
  state-required statements and analysespotentially including judgments about climate impactsrather than letting
  companies choose their own messaging.
• Burden and feasibility: Particularly with Scope 3, businesses argue that the data can be difficult
  to obtain, inconsistent across suppliers, and costly to verify.
• Extraterritorial effects: Because California is such a large economy, the laws can shape reporting
  practices far beyond the state’s borders. Critics argue that one state shouldn’t set quasi-national disclosure
  expectations for companies operating nationwide.

California’s response (again, in general terms) is that these are disclosure requirements tied to doing business in
the state, and that commercial disclosure rules often receive different treatment than pure ideological speech. The
state also points to market realities: investors, lenders, insurers, and customers increasingly demand standardized
climate-related information, and inconsistent voluntary claims can create confusion and greenwashing risk.

The Ninth Circuit’s split response to the emergency request doesn’t resolve those constitutional questions. It just
tells us the courtat least for nowwas willing to pause the risk-reporting law while letting emissions reporting
continue moving toward implementation.

What “denies a request to block” means for real-world compliance

Legal headlines can make it sound like companies either “win” or “lose.” But compliance doesn’t live in a binary.
It lives in calendars, budget approvals, data systems, and the awkward moment when procurement realizes it now needs
emissions information from a supplier that still sends invoices by fax.

Because SB 253 was not blocked, companies that may be covered should treat emissions disclosure readiness as a
current-year problemnot a future-year hobby. Even if reporting deadlines shift, preparation work takes time:
defining organizational boundaries, selecting calculation methods, choosing tools, validating data flows, and building
review controls that won’t collapse the first time a facility manager changes a meter.

Meanwhile, SB 261’s pause can create a psychological trap: “Great, we can ignore climate risk reporting.” That’s how
teams end up scrambling later. Climate risk reporting requires cross-functional input (finance, enterprise risk,
legal, operations, insurance, sustainability), and it benefits from early governance decisions: Who owns the report?
Who signs off? What assumptions will the company consistently use across years?

Timeline: what happened, what’s happening now, what’s next

The court’s injunction pending appeal created immediate consequences for SB 261 enforcement. After that order,
California regulators issued guidance acknowledging the enforcement pause. At the same time, regulatory development
for implementation continued, with California’s Air Resources Board (CARB) working through rulemaking steps, public
workshops, and proposals on key dates, definitions, and fee structures.

In other words, the litigation didn’t freeze the entire ecosystem. It just changed the urgencyand shifted attention
to SB 253 readiness, where the denial of blocking relief means the train is still at the platform with doors open and
an impatient conductor checking their watch.

Companies should watch for:

• Appellate developments: briefing, oral argument, and eventual merits decisions that could reshape
  or uphold the laws.
• CARB rulemaking: practical definitions (like “doing business”), reporting mechanics, verification
  requirements, and how fees and enforcement will work.
• Deadline adjustments: proposed dates for initial reporting, especially for early-year emissions
  reporting milestones.

How to prepare for SB 253 without turning your company into a carbon-counting monastery

The smartest approach is to treat emissions reporting like any other serious disclosure: build a repeatable system,
not a one-time heroic sprint. Here’s what that looks like in practice.

1) Identify whether you’re coveredand document your logic

“Doing business in California” can be straightforward for some companies and annoyingly nuanced for others (especially
complex corporate groups). Start with a defensible internal memo that explains why you believe you areor are notcovered,
using consistent revenue calculations and entity mapping.

2) Build a clean Scope 1 and Scope 2 foundation first

Scope 1 and 2 are usually more controllable because they relate to your own operations and purchased energy. Map your
data sources: fuel invoices, utility bills, fleet records, refrigerants, and facility energy systems. Then decide on
calculation methods and internal controls so the numbers can be recreated and reviewed.

3) Start Scope 3 as a “priority lanes” project, not a single giant bucket

Scope 3 is broad. Don’t start by trying to calculate “all the Scope 3” at once. Start by identifying your biggest
driversoften purchased goods and services, transportation and distribution, and use of sold products depending on
business model. Then build supplier engagement processes that are realistic: standardized questionnaires, phased data
requests, and clear rules for when estimates are acceptable.

4) Treat verification like a design requirement

If your report will eventually need assurance or verification, build that expectation into your system now. Document
sources. Keep audit trails. Use consistent assumptions. The point isn’t perfectionit’s defensibility and repeatability.

5) Coordinate messaging: avoid accidental contradictions

Emissions disclosures, sustainability reports, marketing claims, and investor presentations should not tell different
stories. The fastest route to a reputational headache is a glossy brochure that says “net-zero soon!” while a formal
disclosure shows rising emissions with no clear plan. Align your narrative with your data.

Why this case matters beyond California

California’s disclosure laws sit in a larger national tug-of-war over climate reporting. At the federal level, the
U.S. Securities and Exchange Commission’s climate disclosure rule has faced major litigation and shifting regulatory
posturecreating uncertainty for companies trying to plan multi-year disclosure strategies.

That broader context matters because companies don’t want to build five different reporting systems for five different
regimes. When federal and state rules diverge, businesses either standardize upward (to the most demanding requirements)
or they fragment reporting in ways that increase cost and reduce comparability. Either way, the market pressure for
consistent climate information isn’t going away, even if the legal landscape keeps doing cartwheels.

Experiences from the trenches: what this looks like inside companies (about )

Talk to the people actually doing the workcontrollers, sustainability leads, risk managers, internal audit teams
and you’ll hear the same theme: the hardest part isn’t the math, it’s the choreography.

One common experience is the “Where does the data live?” scavenger hunt. Energy data might sit with facilities.
Fleet fuel receipts might live in procurement. Refrigerant logs might be a mix of contractor PDFs and handwritten
notes. Finance wants numbers that tie out; operations wants minimal disruption; legal wants language that won’t age
poorly in court. The first month of any serious emissions project often looks less like climate strategy and more
like group therapy with spreadsheets.

Then comes supplier engagementwhere optimism meets email reality. Companies find that even well-run suppliers may not
have consistent emissions data. Some vendors share credible product-level figures; others respond with “We don’t track
that.” So teams learn to build a ladder: start with primary data when available, use industry averages where necessary,
and document assumptions so improvements can happen year over year. A lot of companies report that a phased approach
keeps the project moving: top suppliers first, then broader categories, then deeper detail.

Another real-world experience is governance whiplash. A court order pauses one requirement, and suddenly leadership
asks whether the whole program can be “deprioritized.” But the teams closest to the work know the truth: pausing a rule
doesn’t pause the complexity. So many companies adopt a “no regrets” strategykeep building the data foundation and
controls that will be useful under any regime. Even if timelines move, the underlying capability (clean data, consistent
boundaries, documented methodology) still pays off for customers, lenders, insurers, and internal decision-making.

Climate risk reporting brings a different kind of challenge: translating climate impacts into business language without
drifting into fortune-telling. Risk teams describe a learning curve around scenario thinkinghow to discuss physical
risks (heat, floods, wildfire exposure) and transition risks (policy, litigation, market shifts) in a way that’s honest,
not alarmist, and consistent with broader enterprise risk practices. Many companies run pilot exercises: one business
unit, one geography, one risk category. The goal isn’t to predict the future perfectly; it’s to show that the company
has a process to identify, assess, and manage climate-related risks like any other strategic risk.

Finally, there’s the communications experience: the relief of replacing vague “we care about the planet” statements
with real, trackable metricsand the discomfort of discovering that your baseline isn’t flattering. Companies that
lean into transparency tend to do better long-term: they can explain changes, show progress, and avoid the trap of
overpromising. In a world where courts and regulators are scrutinizing climate claims, credible reporting becomes less
about PR and more about staying out of trouble while building trust.

Bottom line

The Ninth Circuit’s decision to deny blocking relief for SB 253while pausing SB 261creates a mixed compliance moment:
one foot on the gas, one foot hovering over the brake. If you’re a large company doing business in California, the
practical move is to keep building emissions reporting readiness now, and treat climate risk reporting as paused but
not gone. Legal fights take time. Data systems take time tooand they don’t care what the headline says.