The California emissions reporting laws are at the center of a major legal battle as business groups petition the U.S. Supreme Court to halt two sweeping climate disclosure mandates before they take effect.
Chamber of Commerce Moves to Block the Laws
On Nov. 14, the U.S. Chamber of Commerce and allied industry organizations filed an emergency application urging the Supreme Court to block California emissions reporting laws SB 261 and SB 253. The application targets California Air Resources Board officials, including Chair Lauren Sanchez, and was submitted directly to Justice Elena Kagan, who oversees emergency petitions from the state.
Why Business Groups Oppose the Requirements
The application argues that the laws unconstitutionally compel speech on a politically charged issue, forcing companies to publish climate-related information “even if they have said nothing about climate, emissions, or sustainability in the past.” The petition claims these mandates pressure companies to reshape operations in ways aligned with state-driven climate priorities.
What SB 261 and SB 253 Require
The California emissions reporting laws introduce some of the most expansive corporate climate disclosure rules in the United States.
SB 261: Climate Risk Reporting
Taking effect January 1, 2026, SB 261 compels businesses to publish extensive reports on their websites addressing a wide range of climate-related risks, including:
- rising sea levels
- cyclones and storms
- droughts
- government responses to climate risks
- how such responses could affect operations decades into the future
Businesses must evaluate hypothetical scenarios and anticipate how customer behavior may shift under future climate stresses.
SB 253: Multi-Level Emissions Reporting
SB 253, set to take effect mid-2026, requires businesses to report:
- emissions from their direct operations
- emissions from purchased energy
- and eventually, full value-chain emissions, including suppliers, contractors, employees, and even customers
Businesses argue this is overly burdensome and technologically infeasible for many sectors.
California’s Rationale for Transparency
When signing the California emissions reporting laws in October 2023, Governor Gavin Newsom described them as tools to illuminate real climate risks and encourage more responsible business practices.
Newsom said SB 261 “illustrates the real risks of climate change for businesses operating in California,” and SB 253 “turns information transparency into climate action.”
These laws align with California’s broader role as a climate policy leader.
The First Amendment Challenge
Business groups claim the California emissions reporting laws violate the First Amendment by compelling companies to publicly adopt a state-driven climate narrative. Their application cites major Supreme Court precedents, including:
- Janus v. AFSCME (2018) – saying government cannot compel individuals to subsidize speech on controversial topics
- 303 Creative LLC v. Elenis (2023) – asserting that government cannot force a person or business to express messages they do not endorse
The petition argues that compelled speech creates irreversible harm: once a company is forced to publish mandated disclosures, “the message is out. It cannot be unsaid.”
Prior Court Decisions and the Ongoing Appeal
The Chamber of Commerce filed suit in federal court in January 2024 to challenge the California emissions reporting laws. However:
- In August 2025, the district court refused to issue a preliminary injunction.
- On Sept. 11, it denied a follow-up request for an injunction pending appeal.
- The business groups then appealed to the Ninth Circuit, which scheduled a hearing for January 9, 2026—after SB 261 is set to take effect.
Why the Supreme Court Is Being Asked to Intervene
The petition urges the Court to preserve the status quo until appellate review is complete. Business groups claim the laws will cause “irreversible injury” if not paused, arguing that forced climate disclosures will permanently alter public perceptions of companies.
They emphasize that compelled speech inflicts immediate, lasting harm, whereas restricted speech can later be remedied.
ESG Reporting at the Center of the Debate
The California emissions reporting laws reflect the rise of ESG (Environmental, Social, and Governance) standards—an international framework originating from a 2004 United Nations initiative, Who Cares Wins. ESG sought to align corporate behavior with global sustainability goals, including climate action and social equity.
Growing Pushback in the United States
Some U.S. states have moved to limit ESG initiatives. For example:
- Florida, under Gov. Ron DeSantis, passed a 2023 law prohibiting state officials from using public funds to advance ESG goals.
This ideological divide plays a key role in the opposition to California’s new disclosure mandates.
What Happens Next?
California Air Resources Board spokesperson Dave Clegern declined to comment on the ongoing litigation. It remains unclear when Justice Kagan or the full Court will respond to the emergency application.
Whether the Supreme Court chooses to intervene early will have significant implications for climate policy, corporate speech rights, and the future of ESG-driven regulation in the United States. The fate of the California emissions reporting laws may shape how aggressively states can pursue climate transparency in the years ahead.
