California Reporting Deadline Approaches as Federal Requirements Decline

In a recent legal development, the US District Court for the Central District of California decided not to halt the enforcement of California’s new climate disclosure regulations despite a request from the Chamber of Commerce of the United States of America and other business organizations. This decision means that the reporting deadlines set by the laws will remain in effect until 2026. On the other hand, the US Securities and Exchange Commission (SEC) has chosen to withdraw its defense of a similar federal climate disclosure rule that was under scrutiny in the Eight Circuit Court of Appeals. Additionally, the Environmental Protection Agency has proposed to eliminate federal requirements for reporting greenhouse gas emissions.

The legal battle in California began in January 2024 when the Chamber of Commerce of the United States of America and other groups challenged the constitutionality of two climate-related laws in the US District Court for the Central District of California. While two of the plaintiffs’ claims were dismissed in February 2025, the court allowed the claim that the laws violated the First Amendment to proceed. Despite the business groups’ efforts, the District Court denied their request for a preliminary injunction in August 2025. The groups then appealed to the Ninth Circuit Court of Appeals, but their pursuit of an injunction was rejected by the District Court on September 11, 2025. The legal battle continues as the business groups await a decision from the Ninth Circuit.

Furthermore, the California Air Resources Board has released a “Draft Checklist” to guide companies in preparing reports on climate-related financial risks. This checklist outlines the necessary components of these reports, including the reporting framework, governance structure, strategy, risk management, and metrics and targets for addressing climate-related risks and opportunities. The Draft Checklist clarifies that emissions data is not mandated for inclusion in reports for the initial reporting period under the laws.

Switching gears to federal regulations, the Eighth Circuit Court of Appeals recently rejected the SEC’s request to proceed with litigation concerning a rule requiring public companies to disclose climate-related information. The SEC had withdrawn its defense of the rule back in February 2025, putting the case on hold. Similarly, the EPA has put forth a proposal to terminate the Greenhouse Gas Reporting Program, a program that mandates large GHG emitters to report their emissions annually. This proposal, if finalized, could result in significant cost savings.

Overall, the legal landscape surrounding climate reporting requirements is evolving, with California holding steady on its regulations while federal requirements face uncertainty. As companies navigate these changes, compliance with both state and federal guidelines remains crucial to addressing climate-related financial risks and emissions reporting obligations.