The U.S. Chamber of Commerce and other business groups filed a lawsuit in the federal district court for the Central District of California challenging two laws enacted by California in 2023: (1) Senate Bill 253, which requires certain companies to estimate and publicly disclose their greenhouse gas emissions, and (2) Senate Bill 261, which requires certain companies to prepare reports on climate change risks. The plaintiffs characterized the laws as a plan “for compelling speech to combat climate change” and asserted that the laws violate the First Amendment, the Supremacy Clause, and constitutional limitations on extraterritorial regulation, including the dormant Commerce Clause. With respect to the First Amendment, the plaintiffs alleged that the laws “compel companies to publicly express a speculative, noncommercial, controversial, and politically-charged message that they otherwise would not express.” Regarding the Supremacy Clause, the complaint alleged that the laws require “sweeping reports” about companies’ emissions and risks, resulting in pressure on companies both in and outside California to reduce their emissions. The plaintiffs asserted that under the Clean Air Act and federalism principles, California lacks authority to regulate greenhouse gas emissions outside of its borders and that the disclosure laws therefore violate the Supremacy Clause. Regarding limits on extraterritorial regulation, the plaintiffs contended that the laws intrude on congressional authority to regulate interstate and foreign commerce and place burdens on interstate commerce that outweigh benefits to California. 

Lawsuit challenging two laws enacted by California that require companies to estimate and publicly disclose greenhouse gas emissions and climate change risks.

Chamber of Commerce of the United States of America v. California Air Resources Board

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Business Groups Challenged California’s 2023 Climate Disclosure Laws 

Filed

United States of America

California

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An aim to achieve a quantifiable outcome within a given time-frame, set by an institution such as a national government.

Policy instruments are techniques or tools used by governing authorities to promote certain policies in order to achieve predetermined goals. Put simply, instruments are how a government tries to achieve its goals, with this taxonomy being focused on national policy instruments.

Risk is the potential for adverse consequences resulting from the dynamic interplay between (climate-related) hazards, exposure, and vulnerability of affected human or ecological systems.

Groups  of people who are adversely affected by climate change or the response to it

A set of principles, processes, and practices that build economic and political power to shift from an extractive economy to a regenerative economy.

Justice is the ethical and political framework that addresses fairness, including issues of responsibility, rights, and structural inequity.

Renewable energy means all forms of energy produced from renewable sources in a sustainable manner.

Fossil fuel is a generic term for non-renewable energy sources such as coal, fossil gas, and oil (including crude oil, and petroleum products), that can be used for electricity and heat generation. Fossil fuels are hydrocarbons formed from pressurised and heated organic material buried over millions of years.

Molecules in the atmosphere that play a key role in the greenhouse effect by trapping heat radiating from Earth’s surface.

Area of the economy in which actors engage in identical or related activities.

In human systems, the process of adjustment to actual or expected climate change and its effects, in order to moderate harm, increase resilience or exploit beneficial opportunities. In natural systems, the process of adjustment to actual climate change and its effects; human intervention may facilitate adjustment to expected climate change and its effects.

The management and allocation of funds, assets and investments to meet various objectives

People whose sexual orientation, gender identity, or gender expression differs from the majority or societal norms

A loan is a policy instrument where funds are provided to a borrower with the expectation of repaying the principal plus interest.

Either money or something of monetary value is transferred between two or more organisations, people or countries.

The release of heat-trapping gases, primarily from human activities such as burning fossil fuels, agriculture and industry.

Risks to the ecosystem health of the marine environment, including ocean warming, ocean acidification, and ocean deoxygenation, harming biodiversity, species health, ecosystem services, and coastal community livelihoods.

Extreme weather refers to events where a weather variable exceeds (or falls below) a threshold. Meaning it is significantly different from the average or usual weather pattern.

A drought is an extended period of unusually dry weather marked by a significant and sustained lack of precipitation, falling below a specific threshold over a large area for more than a month

Terrestrial means "of the earth" and relates to the risks to ecological system that includes all living organisms and their interactions within land-based environments, such as forests, grasslands, and deserts.

Fossil gas, commonly known as natural gas, is a fossil fuel consisting chiefly of methane with smaller amounts of other hydrocarbons and trace gases, found in underground deposits.

Any compulsory, unrequited payment to the government levied on corporations or individuals. This can be for environmental reasons, such as introducing a Carbon tax to set a price that emitters must pay for the greenhouse gases they emit.

This sector involves the wholesale and retail selling of goods.

This sector creates and distributes information and entertainment through television, radio, print, and digital platforms.

This sector involves activities that impart knowledge and skills to individuals, including formal schooling, vocational training and educational support.

This sector includes firms and individuals offering specialised expertise in fields such as law, accounting, consulting, science and engineering.

Activities of businesses and institutions that provide financial services and products to individuals and organisations.

Activities that involve the cultivation of crops and raising of livestock for food, fibre, and other products essential for human life and industry.

Slow onset events evolve gradually from incremental changes over many years or from increased frequency or intensity of recurring events. As defined in the Cancun Adaptation Framework (2010), slow onset events include risks and impacts from rising temperatures, desertification, biodiversity loss, land and forest degradation, glacial retreat, ocean acidification, sea level rise, and salinization.

Business Groups Challenged California’s 2023 Climate Disclosure Laws

Policy instrument

Risk

Impacted group

Fossil fuel

Greenhouse gas

Economic sector

Finance