Overview

• On August 13, Judge Otis D. Wright II rejected a motion by the U.S. Chamber of Commerce and other business groups to preliminarily enjoin SB 253 and SB 261.
• SB 253 will require companies with over $1 billion in annual revenue to report Scope 1 and 2 emissions by 2026 and Scope 3 emissions by 2027.
• SB 261 obligates firms with more than $500 million in revenue to publish biennial climate-related financial risk disclosures beginning January 1, 2026.
• The court applied the Zauderer standard to factual emissions reporting under SB 253 and imposed intermediate scrutiny on the subjective risk assessments mandated by SB 261.
• California Air Resources Board has issued phased enforcement guidance and ‘good faith’ accommodations to ease initial compliance as the lawsuit moves into discovery.