Climate disclosures in the US: are legal challenges the only certainty?

Lawsuits, suspensions and row-backs mean corporate reporting rules remain as uncertain as they were at the start of 2025

This time last year, as the US Securities & Exchange Commission (SEC) prepared to reverse its federal climate disclosure rules, all eyes were on California.

The state’s lawmakers were offering some solace to those concerned about a row-back on corporate transparency in the US by introducing similar reporting rules for large companies, through the Climate-Related Financial Risk Act, or SB 261. 

But 12 months later, those rules are in doubt too, having just been suspended pending the outcome of a legal challenge by the US Chamber of Commerce.  

The Chamber is also going after SB 261’s sister law, known as SB 253, which will mandate annual greenhouse gas disclosures.

Its enforcement date is in 2027, though, not 2026; so the courts will have time to investigate without the need for a delay.  

Peter Trimarchi, a lawyer at White & Case, tells Real Economy Progress SB 261 is “probably at greater risk of being overturned than SB 253” – although he notes the law has already survived legal challenges at the district courts, so it could survive the latest attack.  

Then there’s New York State’s greenhouse gas reporting rules, which were finalised this month.  

Under the requirements, which take effect in 2027, industrial facilities in the state emitting more than 10,000 metric tons of carbon each year must report on their emissions.   

Fossil fuel producers and electricity providers with operations in the state are also covered, which Trimarchi describes as “quite substantial”. 

Larger companies will be required to explain how they will collect emissions data, and those plans must be verified, along with the data itself, by a third party. 

It will be “a steep learning curve”, says Trimarchi – especially for those unaccustomed to climate reporting.  

White & Case recently ran a hypothetical scenario for non-compliance with New York’s rules. 

It found that a firm that was 30 days late to submit, miscalculated the final figures by five metric tonnes, and failed to collect a data point it disclosed in its plan, could see a fine of up to $500k. 

Trimarchi says that, as with most major environmental programmes passed in the US, New York faces “a high likelihood of a legal challenge” to its disclosure rules as they enter force. 

More uncertainty has been injected by the Trump Administration’s plan to change the Environmental Protection Agency’s emissions reporting programme, upon which New York’s requirements are partly based. 

State officials said further amendments may be needed to realign the two frameworks.   

New York’s other attempt to introduce risk-based climate disclosure rules died earlier this year, and efforts by New Jersey, Colorado, Washington and Illinois have all failed to gain meaningful legal traction.  

All in all, Trimarchi says, the US climate reporting landscape is “as uncertain at the end of 2025 as it was at the beginning”.