On November 18, 2025, the Ninth Circuit Court of Appeals issued an injunction temporarily prohibiting the California Air Resources Board (CARB) from enforcing Senate Bill 261 (SB 261) while it reviews an appeal in Chamber of Commerce of the United States of America et al. v. Randolph et al., No. 25-5327 (9th Cir.) (see Ninth Circuit Court of Appeals Opinions Portal). SB 261 requires U.S. entities with annual revenues exceeding $500 million and doing business in California to publish a climate-related financial risk report every two years, with the first report originally due January 1, 2026. This ruling pauses enforcement of SB 261’s requirements—including the January 1, 2026 reporting deadline and website publication obligation—pending the outcome of the appeal.
What does this mean for covered entities?
- CARB is currently enjoined from enforcing SB 261 including requiring companies to publish reports or imposing penalties.
- CARB has also not issued guidance on voluntary compliance during the injunction period.
- SB 261 has not been repealed or suspended; the statute remains in effect, but obligations cannot be enforced until the injunction is lifted. Companies are not required to publish SB 261 reports by January 1, 2026 while enforcement is paused.
- The injunction does not affect SB 253 (Greenhouse Gas Emissions Reporting), which remains on track. CARB reiterated during its November 18, 2025 public workshop that SB 253’s first reporting deadline is proposed for August 10, 2026, even though implementing regulations are still pending.
Next steps: Oral arguments on the appeal are scheduled for January 9, 2026. If the injunction is lifted, CARB could resume enforcement immediately, and reports may become due without additional lead time. Courts generally clarify that injunctions pause enforcement but do not eliminate statutory duties, meaning delays in preparation may result in compliance and reputational risks.
Recommended approach
Organizations should continue preparing draft disclosures and governance processes internally as a best practice. This ensures readiness if enforcement resumes promptly after January 9 and positions reporting in alignment with globally recognized frameworks such as Task Force on Climate-related Financial Disclosures (TCFD) and the International Sustainability Standards Board (ISSB) standards which investors increasingly expect. While the Ninth Circuit injunction temporarily pauses enforcement, it does not remove the statutory obligation under SB 261. Continuing preparations now mitigates risk and strengthens alignment with global disclosure standards that stakeholders value.
Visit BSI Consulting’s sustainability page for more information on our services. Connect with one of our experts for more on California’s and other sustainability regulatory reporting requirements.
