California court blocks scope 3 emissions reporting – for no

California's Ninth Circuit Court of Appeals has split its decision on the state's landmark climate reporting laws. Scope 1 and scope 2 emissions reporting under SB 253 will proceed, but scope 3 reporting enforcement remains blocked, alongside the entire Climate Corporate Data Accountability Act (SB 261).

This ruling matters because it directly shapes what US companies must disclose about their operational and purchased energy emissions – a floor that differs sharply from the delayed SEC climate rule. The halt on scope 3 reporting is the practical sticking point: that's where most emissions live for many sectors, and where corporate accountability gets real.

The split decision reflects deeper legal uncertainty about state-level climate mandates. Opponents argue scope 3 requirements exceed state authority and impose unreasonable burdens on businesses. Supporters contend California's authority is clear and that transparency on value-chain emissions is non-negotiable for climate action.

What this means: companies operating in California face a patchwork. They'll need to report scope 1 and 2 – straightforward for most – but scope 3 remains legally contested. This creates a compliance grey zone for multistate operators and invites further appeals.

The EU's Corporate Sustainability Reporting Directive already mandates scope 3 disclosure. If California's scope 3 stays blocked, US companies will face divergent requirements by geography, undercutting the case for a coherent, global standard. The legal fight isn't finished.

What’s next for California’s climate laws following an appeals court split decision

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