CARB Delays Rulemaking on California Climate Disclosure Laws—But Reporting Deadlines Stand Firm in Light of New Challenge
This update covers information regarding the California Air Resources Board (CARB) rulemaking delay for California’s climate disclosure laws, SB 253 and SB 261, as well as additional new litigation challenging the constitutionality of these laws. The bottom line for companies is that despite the rulemaking delays and ongoing litigation, the laws remain valid and in effect, with disclosure deadlines unchanged. We encourage you to review this update in conjunction with our earlier updates that we have issued (some of which are referenced in this update).
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As companies doing business in California prepare to comply with the state’s climate disclosure requirements, CARB has announced it will push its initial rulemaking under SB 253 and SB 261 to Q1 2026, citing the large volume of public comments and ongoing input related to identifying covered entities.
Notably, this rulemaking delay will not affect the statutory compliance deadlines. The first climate-related financial risk reports under SB 261 are still due by January 1, 2026, and Scope 1 and 2 emissions disclosures under SB 253 are scheduled to begin in 2026, with CARB proposing June 30, 2026 as the deadline for initial SB 253 disclosures. This means companies will need to prepare their initial filing reports without the benefit of final implementing regulations—at least with respect to the SB 261 disclosures.
In the face of these regulatory delays, SB 253 and SB 261 are subject to mounting legal challenges. As detailed in our February 2024 Legal Update, the U.S. Chamber of Commerce and several other business and industry trade organizations filed suit challenging both statutes on First Amendment, preemption and extraterritorial/Dormant Commerce Clause grounds. Following a denial of a preliminary injunction that would have enjoined CARB from implementing, applying, or taking any action to enforce SB 253 and SB 261, the plaintiffs filed a notice of appeal which is currently pending in the Ninth Circuit.[1]
Despite SB 253 and SB 261 surviving First Amendment and other challenges brought by the U.S. Chamber of Commerce and others, ExxonMobil Corporation, on October 24, 2025, filed a similar constitutional challenge in the Eastern District of California.
In this latest challenge, ExxonMobil is seeking, among other things, to enjoin CARB from implementing, applying, or taking any action to enforce SB 253 and SB 261.[2] ExxonMobil argues that both laws unconstitutionally compel and regulate viewpoint-based speech in violation of the First Amendment by mandating disclosures in frameworks ExxonMobil contends reflect California’s preferred viewpoint on climate policy.[3] The complaint further asserts that SB 261 is preempted by the National Securities Markets Improvement Act (NSMIA) because it effectively imposes additional investor disclosure requirements beyond those required under the federal securities laws.[4] ExxonMobil also points to CARB’s draft Scope 1 and 2 reporting template—released October 10, 2025—as evidence that implementation may require base-year “recalculations” and other elements that go beyond the Greenhouse Gas Protocol’s core requirements or create misalignment with intensity-based reporting approaches.[5]
While these legal challenges add to the regulatory and enforcement uncertainty surrounding the California climate disclosure regime, previous litigation has not invalidated the laws or stayed their effectiveness—and neither CARB nor the California legislature has to date adjusted the statutory compliance timelines in light of these legal challenges.
As noted above, SB 261 climate-related financial risk reports remain due beginning January 1, 2026, and Scope 1 and 2 reporting under SB 253 begins in 2026, with Scope 3 to follow in 2027.[6] CARB has previously signaled enforcement discretion for the first reporting cycle, but has not shifted statutory deadlines. Companies potentially subject to these laws should continue preparing disclosures, monitoring the docket for any injunctions or merits rulings, and tracking CARB’s ongoing guidance and templates as they evolve. For a detailed discussion of the latest updates relating to SB 253 and SB 261 requirements and what companies can do now to prepare for compliance, see our comprehensive Legal Update.
[1] Plaintiffs filed an emergency motion with the Ninth Circuit on October 27, 2025 requesting the court to schedule a hearing on plaintiffs’ pending injunction motion. This emergency motion was granted in part on October 29, 2025 with the court noting that the pending motion for injunctive relief would be assigned to a merits panel and scheduled for oral arguments on January 9, 2026 (i.e., after the date of the deadline for the initial SB 261 disclosures).
[2] Complaint at p.1, Exxon Mobil Corp. v. Sanchez, No. 2:25-at-01462 (E.D. Cal. filed Oct. 24, 2025).
[3] Id. at p.1.
[4] Id. at p. 2.
[5] Id. at p.14.
[6] Id. at p.2, p.9.
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