Ninth Circuit: California Climate Disclosure Scope 1&2 Still Valid, 3 Unconstitutional

The Ninth Circuit’s opinion on November 9 2026 marked a pivotal moment for corporate climate reporting in California. While the court affirmed that disclosures of Scope 1 and Scope 2 emissions under Senate Bill 253 can continue, it declared the bill’s Scope 3 provisions—and the related SB 261 climate reporting requirements—likely unconstitutional. The decision hinges on First Amendment and due process arguments, setting a potentially influential precedent for state‑level environmental disclosures nationwide. For firms operating in or listing on California markets, the ruling underscores immediate compliance with Scope 1 and 2 disclosure standards, or face enforcement and reputational risk. Conversely, the invalidation of Scope 3 mandates may delay broader disclosure ambitions until legislative gaps are clarified. Practitioners should reassess internal ESG monitoring frameworks, adjust disclosure timelines, and anticipate regulatory responses from the California Office of Environmental Health and Safety (OEHS) and the Attorney General’s enforcement arm. Watching the California legislature’s next session—when deputies debate amendments to SB 253 or introduce new climate reporting bills—will be essential for clients seeking to navigate evolving disclosure obligations and avoid inadvertent non‑compliance.