Highlights

• U.S. Court of Appeals halts California’s climate risk reporting under SB 261.
• Greenhouse gas emissions reporting under SB 253 continues toward the summer deadline.

The decision from the U.S. Court of Appeals for the Ninth Circuit places a temporary halt on a California rule on climate risk reporting.

The pause affects SB 261, which asks companies to explain how climate change risks could influence their business. Companies had been preparing for the January deadline, yet the court’s order interrupts that timeline.

The move brings fresh attention to state-led climate regulations and the debate around corporate disclosure.

Read More: CSRD and CSDDD Thresholds Raised Amid Business Pressure

Another rule, SB 253, still moves ahead. This rule covers greenhouse gas emissions reporting, and its compliance date falls in the summer. So, companies with operations in California continue to prepare for emissions disclosures, even though the climate risk rule is paused.

The California Air Resources Board, which oversees these requirements, did not release a response to the ruling.

The challenge came from the U.S. Chamber of Commerce, which filed the lawsuit. The organisation argues that one state should not shape requirements for companies nationwide.

It also says the climate risk rule interferes with First Amendment rights by compelling companies to publish information they disagree with. The Chamber has also submitted an emergency appeal to the U.S. Supreme Court in an attempt to stop both SB 253 and SB 261.

Oil major Exxon Mobil has entered the dispute as well. The company sued California, stating that the state forces it “to serve as a mouthpiece for ideas with which it disagrees.”

Also Read: Managing Climate-Related Risks: NBIM's Strategy Ahead

The conflict is part of a larger national debate. Republican lawmakers and business groups have pushed back against new climate disclosure rules, and similar efforts by the Securities and Exchange Commission under President Biden were later removed under the Trump administration.

The latest case adds another layer to the contest over corporate transparency in climate-related matters.

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Source: WSJ