SACRAMENTO, Calif. (AP) — On Tuesday, a U.S. appeals court temporarily halted a California regulation scheduled to commence in January. This law mandates that large corporations must biennially report the financial risks posed by climate change.

However, a separate law requiring these companies to disclose their carbon emissions on an annual basis will remain in effect for the time being, as determined by the court.

These policies represent some of the most comprehensive measures of their kind in the United States. Advocates argue that they will enhance transparency and motivate businesses to evaluate strategies for reducing their carbon footprints.

The U.S. Chamber of Commerce petitioned the 9th U.S. Circuit Court of Appeals to delay the implementation of these laws, set for next year, on the grounds that they infringe on companies’ First Amendment rights. Last week, the group also requested the Supreme Court’s intervention. Following the lower court’s decision, the Chamber of Commerce retracted its emergency appeal to the Supreme Court.

Daryl Joseffer, an attorney for the Chamber of Commerce, expressed optimism regarding the ongoing appeal process. “We aim to secure an injunction against both climate disclosure laws, which impose significant compliance expenses on companies and their supply chains,” he stated in response to Tuesday’s ruling. “No single state should have the authority to enforce such a heavy burden nationwide.”

Lindsay Buckley, a spokesperson for the California Air Resources Board, which is drafting rules to implement the laws, said the agency was reviewing the ruling and could not comment further. The state has argued that the laws don’t violate the First Amendment because commercial speech isn’t protected the same way under the Constitution.

The financial risk disclosure law, which Democratic Gov. Gavin Newsom signed in 2023, applies to companies making more than $500 million a year that do business in California. The Air Resources Board estimates more than 4,100 businesses will have to comply with the legislation.

The emissions reporting law, which the state passed the same year, applies to businesses that make more than $1 billion a year and do business in the state — which covers roughly 2,600 companies, according to state air regulators. They will have to report planet-warming pollution from burning fossil fuels directly, as well as releases from activities such as delivering products from warehouses to stores and employee business travel.

The U.S. Securities and Exchange Commission approved a rule last year requiring some public companies to report their greenhouse gas emissions and climate risks, but the agency paused the regulation amid litigation.