🕒 Last updated on October 27, 2025
A new legal fight has started between one of the world’s biggest oil companies and the state of California. ExxonMobil, a Texas-based energy giant, has filed a lawsuit against California over two climate disclosure laws passed in 2023.
The company says these laws are unfair and violate its rights. It filed the complaint in the U.S. District Court for the Eastern District of California, asking judges to stop the laws before they take effect next year.
California, under the leadership of Governor Gavin Newsom, created these new rules to make big companies more transparent about how their activities affect the environment. Lawmakers say that people and investors deserve to know how much companies contribute to global warming and what they are doing to prepare for climate change.
But ExxonMobil argues that the state has gone too far. The company says it already shares information about its greenhouse gas emissions and climate plans, but California’s new demands go beyond what is reasonable.
What the Laws Require
The first rule, called Senate Bill 253, requires large businesses that make more than $1 billion a year to report a wide range of emissions. This includes both direct emissions from their operations and indirect ones. Indirect emissions can come from things like employee travel, transporting products, and even customers using the company’s products.
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California lawmakers say this kind of information is essential to understanding the full picture of how industries affect the planet. The goal is to hold major polluters accountable for the carbon they release into the atmosphere.
ExxonMobil disagrees. In its complaint, the company says the new reporting system “places disproportionate blame” on large corporations just because of their size. It also claims the laws are designed to shame big companies rather than to inform the public.
The second law, Senate Bill 261, applies to companies earning more than $500 million per year. It requires them to explain how climate change could affect their business and finances. Companies must describe the possible risks and how they plan to handle them.
ExxonMobil says this rule forces it to guess about “unknowable future developments.” The company argues that no one can predict exactly how climate change will unfold or how it will affect future business. It believes the law would make it publish uncertain information that could be misleading or wrong.
A Battle Over Speech and Blame
At the center of ExxonMobil’s lawsuit is a claim about free speech. The company says California is trying to force it to communicate messages that it doesn’t agree with — mainly, that large corporations like itself are mostly to blame for climate change.
ExxonMobil argues that the government cannot make a company say something it disagrees with. It says the laws are not about transparency but about pushing a specific political viewpoint.
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Officials from Governor Gavin Newsom’s office have responded strongly. A spokesperson for the governor said it is “truly shocking that one of the biggest polluters on the planet would be opposed to transparency.”
The new disclosure rules were approved in 2023 and are set to take effect in 2026. If the court sides with ExxonMobil, the laws could be delayed or blocked. If the court supports California, the state could move forward with some of the toughest climate transparency rules in the United States.
This case is part of a larger trend where states and cities are trying to make corporations more responsible for their role in global warming. Similar climate-related lawsuits have been filed across the country in recent years. Many of them involve oil and gas companies that argue they are being unfairly targeted.
ExxonMobil’s lawsuit adds another chapter to this growing conflict between energy companies and governments trying to address climate change. The company insists it supports realistic environmental efforts but says California’s new rules are extreme and unconstitutional.
As the court process unfolds, the outcome could determine how far states can go in requiring climate disclosures from major corporations. For now, both sides are standing firm — one demanding transparency, the other defending its right to speak, or stay silent, on its own terms.