The Supreme Court has sought to block California laws requiring companies to disclose climate impacts

Washington – The U.S. Chamber of Commerce and other business groups asked the Supreme Court on Friday to block new California laws that would require thousands of companies to disclose their emissions and their impact on climate change.

One of the laws goes into effect on January 1, and an emergency appeals court is asking to temporarily suspend it.

Their lawyers argue that the measures violate the First Amendment because the government would force companies to talk about a topic of their choice.

“In less than eight weeks, California will force thousands of companies across the country to talk about the deeply controversial topic of climate change,” they said in an appeal, which also spoke for the California Chamber of Commerce and the Los Angeles County Business Federation.

They say the two new laws will require companies to disclose the “climate-related risks” they foresee and how their operations and emissions contribute to climate change.

“Both laws are part of California’s open campaign to force companies into public discussions about climate issues and pressure them to change their behavior,” they said. Their goal, according to their sponsors, is to “make sure people really know who’s green and who’s not.”

One law, Senate Bill 261, would require several thousand companies doing business in California to assess their “climate-related financial risk” and how they can mitigate that risk. The second measure, SB 253, which applies to large corporations, requires them to assess and disclose their emissions and how their operations may affect the climate.

Appellant argues that these laws constitute unlawful coercive speech.

“No state can infringe on First Amendment rights to determine climate policy for the nation. Compulsory speech laws are presumptively unconstitutional — especially where, here, they dictate the value script on a topic as controversial as climate change,” they argue.

Officials with the California Air Resources Board, whose chairman Lorraine Sanchez is named as a plaintiff, said the agency does not comment on pending litigation.

The nation’s first carbon disclosure laws were widely celebrated by environmental advocates upon their passage, with the nonprofit California Environmental Voters describing them as “a game-changer not only for our state but for the entire world.”

Sen. Scott Weiner (D-San Francisco), who authored SB 253, said at the time that the legislation is “a simple but powerful tool to combat climate change.”

“When companies are transparent about the full extent of their emissions, they have the tools and incentives to combat them,” Weiner said.

Michael Girard, a climate change legal expert at Columbia University, called Friday’s move the latest example of “business and conservatives taking up arms with the First Amendment.” He pointed to the Citizens United case, which said businesses have the right to free speech for unlimited campaign contributions, as another example.

“Exxon tried and failed to use this argument in 2022 when it fended off an investigation by the Massachusetts attorney general into whether it misled consumers and investors about the dangers of climate change,” he said in an email. “Exxon claimed the investigation violated First Amendment rights; Massachusetts courts rejected that effort.”

Under the Biden administration, the Securities and Exchange Commission adopted similar climate change disclosure rules. Companies would have been required to disclose the impact of climate change on their business and what they are doing to mitigate the risk.

But the Chamber of Commerce sued and won a lower court ruling that blocked the rules.

And in March, Trump appointees said the SEC would back down and not defend “costly and unnecessarily intrusive climate change disclosure regulations.”

The emergency appeal challenging California’s disclosure laws was filed by Washington attorney Eugene Scalia, son of the late Justice Antonin Scalia.

The companies have tried to persuade judges in California to block the measures. Exxon Mobil sued in Sacramento, while the Chamber of Commerce sued in Los Angeles.

In August, U.S. District Judge Otis Wright II in Los Angeles refused to block the laws because they “regulate commercial speech,” which receives little protection under the First Amendment. He said businesses are routinely required to disclose financial information and factual information about their operations.

Attorneys for the businesses said they appealed the ruling to the 9th U.S. Circuit Court of Appeals, but no action was taken.

Soon after the chamber’s appeal, Iowa state attorneys general and 24 other Republican states joined in support. They said they “vehemently oppose the basic green speech mandate that California wants to impose on corporations.”

The justices are likely to ask California state attorneys for a response next week before acting on the appeal.

Savage reported from Washington, DC, Smith from Los Angeles.