The Ninth Circuit issued its long-awaited decision on California SB 253 and SB 261 on November 9, 2026, just one day before the first SB 253 reports are due.
The bottom line: Scope 1 and Scope 2 reporting moves forward, while Scope 3 and SB 261 face significant legal hurdles. The decision is available in the court’s published opinion, Chamber of Commerce v. Sanchez.
Key takeaways from today’s decision:
- SB 253 [Scope 1 and 2]: Remain in effect. The court viewed these requirements as disclosures of factual emissions information tied to a company’s own operations and commercial activities. Covered companies should proceed with the November 10 reporting deadline, as indicated on CARB’s corporate climate disclosure program webpage.
- SB 253 [Scope 3]: The court found the requirements likely unconstitutional, concluding that Scope 3 disclosures involve emissions from diffuse third-party activities across a company’s value chain and are not sufficiently tied to the reporting company’s own operations or commercial transactions to qualify as commercial speech. As a result, the requirements are subject to the more demanding strict scrutiny standard, which the court found they are unlikely to satisfy. The case was sent back to the district court to determine whether the Scope 3 provisions can be severed from the rest of SB 253.
- SB 261: The court similarly found the disclosure requirements unlikely to survive constitutional scrutiny. Unlike reporting factual emissions data, the court concluded that SB 261 requires companies to make predictive and subjective judgments about future climate-related financial risks, including assessments the court characterized as subjective and ideological. The court therefore treated the disclosures as noncommercial speech subject to strict scrutiny and found that California had not shown the requirements were sufficiently narrowly tailored because less restrictive alternatives were available. SB 261 remains on pause.
The decision provides some near-term certainty for SB 253 Scope 1 and Scope 2 reporting, but the path forward for Scope 3 reporting beginning in 2027 and SB 261 climate-risk reporting remains unsettled.
How Trinity Can Help: Trinity can help companies understand what the decision means for their reporting obligations and continue moving forward with SB 253 Scope 1 and Scope 2 compliance, including GHG inventory development, reporting, and assurance readiness. We will continue monitoring the litigation and related CARB guidance as requirements for Scope 3 and SB 261 evolve.
