SB 261 Update: November Injunction Halts Enforcement
On November 18th, the Ninth Circuit Court of Appeals issued an injunction against enforcement of SB 261, California’s Climate-Related Financial Risk Act. The injunction follows an emergency appeal by the U.S. Chamber of Commerce and other business groups.
What Does This Mean for Reporting?
This halt on enforcement means there is great uncertainty for when companies should realistically be prepared to publish a 261 disclosure. The January 1, 2026 reporting date is still on the books with anticipation that the public docket still opens December 1, 2025, but the hearing for the injunction will take place on January 9, 2026.
It is possible the court may make its decision immediately after oral arguments are heard, in which case enforcement may go into effect immediately after the decision is entered. The California Air Resources Board (CARB) has not yet released its response to the injunction, but a grace period is anticipated following final ruling to allow companies time to report. As it is now, the public docket will remain open until July 1, 2026. If SB 261 is upheld, there is potential for it to go to the Supreme Court for a final decision.
Important Notices from CARB’s Workshop
CARB hosted a planned workshop on November 18th following the announcement of the injunction. The contents of the workshop intended to clarify definitions for in-scope entities and communicate year one reporting requirements for SB 253 and SB 261, collectively the “200s.”
Applicability: Now determined based on the lower of your previous two fiscal years for both SB 261 and 253. You must have two consecutive fiscal years above the inflation-adjusted threshold in order to qualify for the next reporting deadline for SB 253 and SB 261, respectively.
Existing Reports: If you already have an annual sustainability report that includes your GHG Inventory and/or is compliant to TCFD/IFRS S2 framework, you can provide the link to that existing report for each respective law rather than creating standalone reports or filling out their 253 template.
What About SB 253?
Although the emergency appeal sought to block enforcement of both SB 261 and SB 253, the court declined to put a stay on SB 253 enforcement.
This means SB 253 reporting will go forward as intended, with a newly released preliminary reporting date of August 10, 2026. Of note:
Entities that were not already collecting or planning to collect Scope 1 & 2 GHG data as of December 05, 2024 when the Enforcement Notice was published, do not have to report in 2026, but will still be expected to report full Scope 1-3 in 2027 with limited assurance of Scope 1 & 2.
For 2026 only, limited assurance is not required if you weren’t already planning to obtain it. If you already obtain assurance for other purposes, then you are required to submit your letter of assurance as part of your disclosure.
The halt on enforcement is a temporary measure while the appeal moves forward. Companies that were working on their reports should continue as enforcement may begin immediately if the court upholds SB 261.
While this moment is one of uncertainty, it’s wise to proceed under the assumption that SB 261 will remain intact and will be effective again in Q1-Q2 of 2026.
Ensure Compliance With Snaplinc
While the injunction may provide some breathing room for covered companies, the risk of fines up to $50,000 is too great to ignore. If you need assistance completing your SB 261 report at this time, Snaplinc is here to help.
Contact us today to safeguard against expected SB 261 enforcement.