California Climate Disclosure Laws Survive Legal Challenge

California's new climate disclosure laws, SB 253 and SB 261, faced significant legal challenges from the U.S. Chamber of Commerce, but a recent ruling from U.S. District Judge Otis Wright II upheld the laws, dismissing claims that they violate constitutional provisions. These laws require large companies operating in California to report their greenhouse gas emissions and disclose climate-related financial risks, with the first reports due in 2026. While the First Amendment challenges are still under litigation, the court found that the claims related to the Supremacy Clause and extraterritorial regulation were not ripe for review as they require further regulatory development by the California Air Resources Board (CARB). The ruling allows CARB to proceed with creating regulations for SB 253, which it must complete by July 2025. Critics from the business community argue that the reporting requirements are overly burdensome and could compel subjective disclosures, though the court has not yet addressed these concerns in detail. This legal battle represents a crucial moment for corporate climate accountability in California and beyond.