Ninth Circuit Finds SB 253 Scope 3 Likely Unconstitutional: Why Your Customers Will Still Ask for Product Carbon Footprints

On November 9, 2026, the US Court of Appeals for the Ninth Circuit reversed a lower court's refusal to block California's SB 253 Scope 3 reporting requirement. Scope 3 is now expected to be paused while the case continues. The next day, November 10, the first SB 253 reports for Scope 1 and 2 emissions came due. For many suppliers, though, the more familiar message is still the one from a customer's procurement team: please share the carbon footprint of the products you sell us.

If you are a manufacturer or supplier, it is tempting to read the headline and relax. The SB 253 Scope 3 mandate may be paused, but the business reasons your customers ask for product carbon footprints (PCFs) have not gone anywhere. This article explains what the court actually decided, what remains in force, and why PCF requests from customers are likely to keep arriving, with or without a California mandate behind them.

SB 253, the Climate Corporate Data Accountability Act, is a California law that requires large companies to disclose their greenhouse gas emissions. It applies to partnerships, corporations, limited liability companies and other business entities formed in the United States with total annual revenues above $1 billion that do business in California.

The law organizes emissions into three scopes, following the GHG Protocol:

The California Air Resources Board (CARB) is responsible for implementing the law. CARB set November 10, 2026 as the first reporting deadline (moved from an earlier August 10 date), covering Scope 1 and 2 emissions only. Scope 3 reporting was scheduled to begin in 2027, with the details left to a second CARB rulemaking that was still in development.

SB 253 also gives CARB authority to issue administrative penalties of up to $500,000 per reporting year. For Scope 3, the law included a safe harbor: misstatements made with a reasonable basis and disclosed in good faith are protected from penalties, and between 2027 and 2030 Scope 3 penalties apply only to failure to file.

The case is Chamber of Commerce of the United States of America v. Sanchez, No. 25-5327, decided by the US Court of Appeals for the Ninth Circuit on November 9, 2026. Business groups had challenged SB 253 and its companion law, SB 261 (climate-related financial risk reporting), arguing that the laws compel speech in violation of the First Amendment.

The ruling was split. The court found the Scope 3 disclosure requirement and SB 261 likely unconstitutional for purposes of a preliminary injunction, but it did not block the Scope 1 and 2 requirements.

Four details matter for anyone planning around this decision.

A preliminary injunction pauses a law while litigation continues. It is not a final judgment on whether the law is constitutional.

The Ninth Circuit reversed the lower court's denial, and legal analysts expect the district court to issue a preliminary injunction consistent with the opinion. The case returns to the district court when the Ninth Circuit issues its mandate, which happens seven days after the deadline for a rehearing petition passes or after any such petition is denied. That is why the pause is still described as expected rather than final.

The Ninth Circuit asked the lower court to decide in the first instance whether the Scope 3 provisions can be separated (or "severed") from the rest of SB 253. That question determines how much of the law keeps running.

Either side can seek further review, and California lawmakers or CARB could respond with changes. The legal picture may look different in six months.

In short, SB 253 Scope 3 is expected to be on hold, not erased. And as the next sections show, the law was never the only reason customers wanted product-level carbon data.

A product carbon footprint (PCF) is the total greenhouse gas emissions associated with a single product, expressed in kilograms or metric tons of carbon dioxide equivalent (CO2e) per unit. A cradle-to-gate PCF covers emissions from raw material extraction through manufacturing until the product leaves the factory gate.

To your customer, your PCF is not an abstract sustainability number. It is a direct input into their own Scope 3 inventory. Under the GHG Protocol Corporate Value Chain (Scope 3) Standard, emissions from the goods a company buys fall into Category 1: Purchased goods and services. One of the calculation methods the GHG Protocol describes, the supplier-specific method, uses product-level cradle-to-gate data collected directly from suppliers. That is exactly what a PCF provides.

The scale explains the urgency. CDP's supply chain report Transparency to Transformation (February 2021) found that supply chain emissions are, on average, 11.4 times higher than a company's operational emissions. The ratio varies by sector, but for many buyers the largest part of their carbon footprint sits inside the products their suppliers make.

That is why PCF requests from customers existed long before SB 253, and why they are not tied to a single California statute.

The court left SB 253's Scope 1 and 2 requirements in place. Companies that are filing their first reports are building carbon accounting teams and data processes, and many will add assurance as requirements phase in. Teams with that capability are well placed to extend it to Scope 3, and a pause in the mandate does not dismantle what they have built.

Many large companies have public climate commitments that include supply chain emissions. The Science Based Targets initiative (SBTi), for example, expects companies to include Scope 3 targets when value chain emissions make up a significant share of their total footprint. A company cannot show progress on a Scope 3 target using only industry averages. Averages do not change when a supplier improves, so buyers need supplier-specific data to measure real reductions.

When a buyer lacks supplier data, it typically falls back on spend-based estimates or secondary emission factors. These methods treat every supplier in a category roughly the same. A supplier that has invested in efficient equipment, renewable electricity or recycled materials gets no credit. A product carbon footprint is how a supplier proves its product is better than the category average.

Supplier sustainability questionnaires and ratings platforms already ask for emissions data. As buyers mature, the question shifts from "Do you track emissions?" to "What is the carbon footprint of the part you sell us?" Suppliers that can answer with a credible, product-level number are easier to evaluate and easier to keep.

Because the Scope 3 question is back in the district court and further review is possible, large reporting companies cannot be sure whether Scope 3 obligations will return. The practical choice for many is to keep collecting supplier data so they are not starting from zero if requirements come back. CARB's own Scope 3 work offers a hint about where attention would land first: in 2026 workshops, CARB staff proposed an initial focus on five Scope 3 categories, including purchased goods and services.

Not every carbon number will satisfy a customer. A PCF that holds up under review usually shares a few traits:

Consider a hypothetical supplier of molded plastic housings that receives a PCF request from a large electronics customer. The supplier's first instinct is to send its company-wide emissions figure. That figure is of little use to the customer, because the customer needs emissions per housing, not per company.

A useful response starts with the bill of materials (BOM) for that housing: the resin type and weight, any inserts or fasteners, packaging, and the electricity and process energy used per unit. Each input is matched to an appropriate emission factor, the results are added up, and the boundary and assumptions are documented. The output is a per-unit, cradle-to-gate footprint that the customer can plug directly into its Category 1 calculation.

The difference between the two answers is the difference between a supplier that looks unprepared and one that looks like a partner.

The court ruling gives suppliers something valuable: time. Here is how to use it well.

The Ninth Circuit's finding that SB 253's Scope 3 requirement is likely unconstitutional is real news, but it does not change the underlying economics of supply chain emissions. SB 253 Scope 1 and 2 reporting continues. The Scope 3 question is back in the district court, and the final outcome is still open. Meanwhile, the companies that buy your products still need supplier-specific data to measure their value chain emissions, track their climate targets and evaluate their suppliers.

Suppliers who treat the SB 253 Scope 3 pause as a reason to stop preparing risk being caught flat-footed when the next PCF request lands. Suppliers who use this window to organize their BOM data, pick a standard and build a repeatable product carbon footprint process will be ready, whatever the courts decide.