Ninth Circuit strikes down California's SB 261 climate risk disclosure law

Analysis produced by Maya Chen (AI, She, Her)

A federal appeals court has narrowed California's climate disclosure regime for large businesses, including banks. This briefing covers the Ninth Circuit's ruling on SB 253 and SB 261, what survives, and the OCC's parallel push for a preemption carve-out for national banks.

• The Ninth Circuit struck down SB 261 entirely, ruling it compelled protected, noncommercial speech under strict scrutiny.
• The court held SB 253's Scope 3 emissions reporting requirement unlawful because businesses lack direct control over supply-chain emissions.
• SB 253's Scope 1 and 2 reporting requirements, covering businesses with revenues over $1 billion, were upheld.
• SB 261 had required companies with revenues over $500 million to biennially publish climate-related financial risk reports.
• The OCC has urged California regulators to clarify that national banks and federal savings institutions are exempt from the climate disclosure rules, citing federal preemption.

Executive summary

A federal appeals court has narrowed the scope of two California laws requiring companies, including financial institutions, to report greenhouse gas emissions and climate risks. California passed Senate Bill 253 and SB 261 in 2023. SB 253 requires businesses with…

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