On November 18, 2025, the Ninth Circuit Court of Appeals issued an injunction temporarily halting enforcement of California’s Senate Bill 261 (SB-261), which had required companies with over $500 million in annual revenue doing business in California to publish climate-related financial risk reports by January 1, 2026. This pause will remain in effect while the court reviews a First Amendment challenge to the law, with oral arguments scheduled for January 9, 2026. Notably, this injunction does not affect SB-253, California’s greenhouse gas emissions disclosure law, which remains on track for its first reporting deadline in August 2026.
What Does This Mean for Businesses?
- The January 1, 2026, SB-261 deadline is currently not enforceable. Companies are not required to publish climate-risk reports until the court issues a decision.
- The pause could be short-lived. If the Ninth Circuit upholds SB-261, reporting obligations may be reinstated immediately, leaving little time for compliance.
- Legal uncertainty remains. The injunction only delays enforcement; it does not invalidate the law. Companies should monitor developments closely.
Malk’s Perspective
Despite the temporary reprieve, we strongly recommend that in-scope companies continue preparation efforts:
- Completing a scenario analysis and developing TCFD-aligned reporting takes significant time and resources.
- If SB-261 is upheld, companies that have prepared will avoid last-minute compliance risks.
- Even if SB-261 does not move forward, TCFD-aligned reporting offers enduring benefits:
- Provides a clear, investor-recognized framework for communicating climate-related risks and opportunities.
- Strengthens decision-making and builds stakeholder confidence.
- Positions companies for similar disclosure requirements emerging in other jurisdictions.
Next Steps
- Stay informed: Watch for updates from the Ninth Circuit and California Air Resources Board (CARB).
- Keep preparing: Treat this pause as an opportunity to refine your climate-risk strategy rather than a reason to delay.
- Leverage best practices: Align with TCFD or ISSB standards to future proof your reporting.