Companies doing business in Texas and California should be aware of the following state law developments, which could affect them.

Texas Developments

SB 2337, signed into law on June 20, 2025, requires proxy advisors to provide detailed disclosures when providing voting recommendations concerning any public company that is incorporated in Texas; has its principal place of business in Texas; or has sought, but not yet received, shareholder approval to reorganize in Texas that are based, in whole or in part, on nonfinancial factors—including environmental, social or governance (ESG) principles or diversity, equity, and inclusion (DEI) considerations—or when they diverge from management’s recommendation or provide conflicting advice across clients. Any violation of SB 2337 will be deemed to constitute a deceptive trade practice under Texas law and will be actionable by the company that is the subject of the recommendation, any of its shareholders, advisory clients and the Texas Attorney General’s office.

California Climate Disclosure Law Developments

On May 29, 2025, the California Air Resources Board (CARB) held a virtual workshop to “support the development of California’s Corporate Greenhouse Gas Reporting Program” reflected in the Climate Corporate Data Accountability Act (SB 253) and the Climate-Related Financial Risk Act (SB 261)—each bill as amended by Senate Bill 219. More than 3,000 people from five continents attended the workshop.

California state Senators Scott Wiener and Henry Stern, the sponsors of the legislation, began the webinar by confirming that, despite speculation in the media, the reporting requirements under SB 253 and SB 261 will not be delayed. Despite multiple inquiries, CARB would not provide details on exactly when the first emission reports will be due in 2026 under SB 253. The first reports under SB 261 will be due on or before January 1, 2026. Notwithstanding the looming deadlines, CARB revealed that implementing regulations for SB 253 will not be ready by July 1, 2025 (the deadline imposed by SB 219). Instead, proposed regulations for SB 253 will be released sometime before the end of the year and will then be subject to comment, making it unlikely that we will have final regulations for SB 253 until sometime (probably late) in 2026.

CARB noted during the session that it expects to hold additional workshops in the coming months and will continue to solicit public feedback. However, given the time and effort required to publish greenhouse gas emissions and climate-related risk reports, companies that believe they may be in scope of these regulations are encouraged to start preparing now for these disclosures, despite the many unresolved questions.

This article is part of a Fenwick "Securities Law Update" authored by David A. Bell, Ran Ben-Tzur, Amanda Rose, and Wendy Grasso.