Climate-Related Financial Risk Act in California gets temporarily blocked

Appeals court issues order ahead of scheduled oral arguments.

California will not be able to implement Senate Bill 261 (the state's Climate-Related Financial Risk Act) whilst appeal litigation related to the law is ongoing, as per the order issued by the US Court of Appeals for the Ninth Circuit.

Originally scheduled to take effect come 2026, the law is being challenged separately by the US Chamber of Commerce and Exxon Mobil Corporation. The US Chamber of Commerce's lawsuit was filed in 2024; that of Exxon's is a recent filing. The appeals court order is in response to the US Chamber of Commerce case, which previously saw a win for California at the district court level.

SB 261 was passed in 2023, requiring firms with annual gross revenues of more than $500m to disclose their climate-related financial risks and mitigation strategies. Impacted companies are arguing that it's a breach of First Amendment rights. Oral arguments in the appeal are slated for 9 January 2026.

Meanwhile the Climate Corporate Data Accountability Act in California will proceed as planned, after the Ninth Circuit decided not to grant the same temporary injunction against SB 253. This other piece of legislation relates to greenhouse gas emissions.

Daryl Joseffer, lawyer for the US Chamber of Commerce, commented: "We look forward to continuing our appeal and securing an injunction of both climate disclosure laws, which result in massive compliance costs for companies and their supply chains."

The Associated Press went on to cite Joseffer as saying that one state should not have the ability to impose "this kind of burden" on the US.