California’s climate disclosure landscape shifted quickly yesterday. The Ninth Circuit Court of Appeals issued an unexpected order temporarily pausing enforcement of SB-261, the state’s biennial climate-risk reporting law, just weeks ahead of its first January 1, 2026 deadline. Importantly, the court did not pause SB-253, California’s annual greenhouse gas (GHG) emissions reporting law, which will still come into effect later in 2026 with expanded requirements in 2027.

During the California Air Resources Board (CARB)’s workshop held the same day, staff proposed moving the first SB-253 deadline to August 10, 2026—a shift from June 30 due to rulemaking extending into early 2026. This new date would cover Scope 1 (direct) and Scope 2 (purchased energy) emissions from fiscal year 2025, with Scope 3 (value chain) reporting beginning in 2027 for fiscal year 2026, regardless of materiality.

SB-261 applies to public and private U.S. companies with over $500 million in annual revenue that “do business” in California. SB-253 captures companies with over $1 billion in revenue meeting the same threshold, and includes third-party limited assurance requirements for Scope 1 and 2 metrics. CARB has signaled that rulemaking and template updates for both laws will continue despite the injunction.

Today’s ruling partially reverses an earlier decision by the district court, which denied the business coalition’s request for a preliminary injunction. The Ninth Circuit agreed to pause SB-261 while it evaluates whether the law violates the First Amendment by compelling climate-risk disclosures—an argument the U.S. Chamber of Commerce is leading. However, the court found no similar urgency for SB-253, given that its first compliance deadlines occur months later. Oral arguments are currently scheduled for January 9, 2026, though the timeline could change.

The U.S. Chamber welcomed the pause, emphasizing concerns about compliance costs and the potential for California to set de facto national standards. The coalition has withdrawn its emergency application to the U.S. Supreme Court for now but may refile later depending on the appeal.

For companies, this ruling creates uncertainty similar to the EU “stop-the-clock” moment under CSRD. While the SB-261 pause provides near-term relief, SB-253 remains active, and CARB is continuing its regulatory process. Companies should maintain focus on “no-regrets” actions—finalizing scoping, completing in-progress climate-risk work, aligning with other mandatory regimes, preparing for emissions reporting, and staying engaged in CARB’s rulemaking. If the injunction is lifted, compliance obligations will resume quickly.