California SB 261
SB 261 (2023) — Climate-Related Financial Risk Act, Health & Safety Code §38533
Topic : ESG disclosure · Level : Regional
Today
Ninth Circuit injunction since 18 Nov 2025; argued 9 Jan 2026, no ruling by 4 Nov 2026. CARB to set a new date after appeal.
Summary
SB 261 requires large companies doing business in California to publish a climate risk report every two years. A federal appeals court has blocked enforcement since November 2025 while it hears a First Amendment challenge.
Who is concerned
- Turnover
- > USD 500 million total annual revenue
- Employees
- non précisé
- Listed company
- cotées et non cotées
- Sectors
- All sectors except insurance
- Triggering activities
- US entity doing business in California
- Revenue above USD 500 million
- Extraterritorial reach
- No
No direct supplier duty; reports may cover supply chain climate risks.
- Examples
- US apparel brand selling in California
- US food company above USD 500m
- US unit of an Asian electronics group
What the law requires
- Publish a climate-related financial risk report every two years (enjoined)
- Describe measures adopted to reduce and adapt to climate risk
- Use TCFD or ISSB-equivalent framework
Penalties
Up to USD 50,000 per reporting year under the statute. Not enforceable while the injunction applies.
What this changes for a supplier in China
No direct obligation. If reinstated, US buyers may ask about physical climate risk at Chinese plants (floods, heat, power cuts) and supplier concentration.
Expected evidence
- Site location and physical risk exposure
- Business continuity plan
- Energy supply resilience data
Tiers : Tier 1