California’s new climate disclosure laws, which require large companies to report greenhouse gas emissions across their value chains and disclose climate-related financial risks, have withstood another legal challenge. U.S. District Judge Otis Wright II denied a motion to block enforcement on First Amendment free speech grounds.

The challenge was led by the U.S. Chamber of Commerce and other business groups, marking their latest attempt to strike down the regulations before trial. Similar motions were rejected earlier this year and in late 2024. The laws, SB 253 and SB 261—later consolidated into SB 219 and signed by Governor Newsom in October 2024—set strict reporting requirements for companies operating in California.

SB 253 applies to companies with revenues above $1 billion, mandating annual disclosure of Scope 1, 2, and 3 emissions, including those from supply chains, business travel, commuting, procurement, waste, and water use. SB 261 covers U.S. companies with revenues over $500 million, requiring reports on climate-related financial risks and mitigation strategies.

Business groups have argued that the laws compel companies to engage in subjective speech and that Scope 3 emissions are too complex to measure accurately. Judge Wright, however, found that the plaintiffs had not demonstrated a likelihood of success on their constitutional claims.

The case may still be appealed, with trial set for October 2026. Under the current timeline, Scope 1 and 2 emissions disclosures will begin in 2026, Scope 3 in 2027, and climate-risk reports by January 1, 2026.

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