Businesses with more than $1 billion in annual revenue operating in California faced an unchanged compliance deadline on November 10, 2026, even as a federal appeals court struck down portions of the state’s landmark climate reporting rules.
The Ninth Circuit Court of Appeals ruled on November 9 that certain provisions of California’s two major climate disclosure statutes likely breach the First Amendment, creating a split outcome for affected companies.
While Scope 3 greenhouse gas emissions reporting under SB 253 was blocked, the court allowed Scope 1 and Scope 2 requirements to remain fully operative, preserving the November 10 filing deadline.
The practical consequence is that large US companies doing business in California must still report their direct emissions and those from purchased energy, even as the broader disclosure regime faces an uncertain legal future.
SB 261, which required companies to disclose climate-related financial risks, had already been suspended pending the outcome of this appeal, and the Ninth Circuit’s ruling now formalises preliminary relief against it.
The court’s First Amendment concerns centred on compelled speech, with judges finding that forcing companies to report Scope 3 emissions and climate financial risks likely goes beyond what the constitution permits.
Scope 3 emissions, which cover indirect emissions across a company’s entire supply chain, are widely considered the most contested and difficult to measure category of greenhouse gas reporting.
The Ninth Circuit sent the Scope 3 question back to a lower district court to determine whether those provisions can be legally separated from the rest of SB 253 without invalidating the whole law.
That severability question matters because SB 253 already contains an express clause allowing portions of the legislation to be struck down independently, potentially insulating the Scope 1 and 2 requirements from further challenge.
Companies covered by SB 253 were advised to treat the November 10 deadline as binding, given the court’s explicit decision not to enjoin the Scope 1 and 2 portions of the law.
The ruling leaves California’s climate disclosure framework in a fragmented state, with part of SB 253 operational, Scope 3 reporting suspended, and SB 261 blocked entirely while litigation continues.
For large multinationals and domestic firms alike, the immediate priority is ensuring Scope 1 and 2 data was submitted on time, while monitoring how district courts handle the severability and First Amendment questions now working their way through the legal system.