Emissions in fashion live somewhere upstream, deep in supplier tiers, farming communities, mills, logistics routes, and energy systems that are easy to reference, but difficult to measure, and even harder to verify. This ambiguity will now have to disappear, courtesy of California’s Senate Bill 253.
What is SB-253
SB-253, formally the Climate Corporate Data Accountability Act, is a legislation that requires any company generating more than $1 billion in annual revenue doing business in California to publicly disclose full value-chain greenhouse gas emissions, including Scope 3.
From spinning mills in India and dye houses in Vietnam to cotton farms, chemical inputs, shipping lanes, warehouses, and retail energy use, carbon data must now be measured and defensible.
While final implementation rules from the California Air Resources Board (CARB) are expected later this quarter, the statutory timelines for data readiness have not moved. Apparel leaders, ESG directors, sourcing heads, and general counsel alike, need to structurally prepare their organisations for a world where climate disclosure carries the same weight as financial reporting.
Live Status Tracker: Is SB-253 Enforceable? (Jan 2026 Update)
With lawsuits in motion and CARB behind schedule, many executives are wondering if they can slow down. The short answer: no.
The Lawsuit:
On January 9, 2026, the Ninth Circuit Court of Appeals heard oral arguments in Chamber of Commerce v. CARB. Plaintiffs argue SB-253 violates the First Amendment by compelling speech.
The Regulatory Delay:
CARB was required to issue implementing regulations by January 1, 2025 (Section 38532(c)(1)). That deadline was missed. Draft regulations are now expected in Q1 2026.
The Compliance Reality:
Despite the delay and litigation, SB-253 remains law. If the court ultimately upholds it, reporting deadlines will not shift retroactively. That means companies must be collecting 2025–2026 data now to stay compliant later.
Who Must Comply?
A company is a “reporting entity” under SB-253 if both of the following apply (Section 38532(b)(2)):
1. Revenue Threshold: Annual revenues exceeding $1 billion globally
2. Doing Business in California
For apparel, this includes:
- Physical retail stores
- Distribution or fulfillment centers
- Significant online sales to California residents that exceed franchise tax thresholds
If you sell meaningfully into California, you are likely in scope.
Reporting Requirements
SB-253 mandates disclosure of Scope 1, 2, and 3 emissions in line with the Greenhouse Gas Protocol (Section 38532(c)(ii)).
Scope 1: Direct Emissions
Emissions from sources you own or control.
Examples:
- Fuel used in company-owned delivery vehicles
- On-site boilers in owned facilities (rare, but possible)
- Refrigerant leaks from HVAC systems in HQs or flagship stores
Scope 2: Indirect Energy Emissions
Emissions from purchased electricity, heating, steam, or cooling.
Examples:
- Electricity consumed by retail stores
- Energy used in owned warehouses or offices
Scope 3: The Supply Chain Reality Check
Definition (Section 38532(b)(5)):
All upstream and downstream emissions not covered by Scope 1 or 2.
Why this matters for fashion:
Scope 3 typically represents 96–98% of an apparel brand’s total footprint.
You are required to account for:
- Tier 4 – Raw Materials:
Fertiliser emissions from cotton, methane from sheep (wool), crude oil extraction for synthetics - Tier 2 & 3 – Processing:
Energy-intensive spinning, dyeing, and finishing, often coal-powered in key sourcing regions - Logistics:
Air freight, ocean shipping, inter-modal transport - Downstream Use:
Consumer washing and drying of garments - End of Life:
Landfill decomposition or incineration emissions
This is where fashion’s carbon footprint actually lives, and where SB-253 focuses.
The Compliance Timeline
Even with delayed regulations, statutory deadlines remain unless amended by the legislature.
| Milestone | Statutory Deadline | Fashion Industry Action |
| CARB Regulations | Delayed to Q1 2026 | Monitor textile-specific methodologies |
| Scope 1 & 2 Reporting | 2026 (Date TBD) | Prepare 2025 retail and corporate energy data |
| Scope 3 Reporting | 2027 (180 days later) | Supplier data collection must already be underway |
| Limited Assurance | 2026 (Scope 1 & 2) | Prepare for third-party review |
| Reasonable Assurance | 2030 (Scope 1 & 2) | Financial-audit-level scrutiny |
| Scope 3 Assurance | 2030 (Limited) | Auditors review supply-chain calculations |
Assurance and Auditing
SB-253 requires emissions disclosures to be verified by an independent third-party assurance provider (Section 38532(c)(1)).
What this means in practice is that brands will have to demonstrate that data from mills, processors, and logistics partners is credible and traceable.
Penalties and the “Safe Harbor”
The Stick: Administrative Penalties
Maximum penalty: $500,000 per reporting year (Section 38532(f)(2)).
Triggers include:
- Failure to file
- Late filing
- Failure to obtain assurance
The financial penalty is modest for billion-dollar brands. The real risk is public disclosure. If competitors report and you do not, the market will draw conclusions.
The Shield: Scope 3 Safe Harbor
SB-253 recognises the complexity of Scope 3.
If disclosures are made with a reasonable basis and in good faith, companies are protected from penalties for Scope 3 misstatements (Section 38532(f)(2)(B)).
This means that you should document everything. If you rely on industry averages or secondary data, explain why and show effort to improve.
5-Step Action Plan for Fashion Brands (2026)
- Run a Data Gap Analysis (Tier 1–4)
Move beyond cut-and-sew. Identify where material, processing, and raw-material data comes from and where it doesn’t. - Align Legal, ESG, and Government Affairs
Track litigation, but assume compliance. CSRD and other global regimes already require similar data. - Update Vendor Compliance Manuals
Carbon data provision should be contractual, mandatory, and enforced like quality or delivery failures. - Adopt Purpose-Built Carbon Software
Spreadsheets won’t scale. You need systems that integrate with PLM and sourcing workflows (e.g., GreenStitch). - Pre-Audit Scope 1 & 2 Now
Run a dry-run assurance on 2025 energy data to uncover control gaps early.
Frequently Asked Questions
Q: We’re private. Does this apply?
Yes, The law applies to any public or private US business entity with total annual revenues exceeding $1 billion USD that does business in California.
Q: Our factories are overseas. Does California have jurisdiction?
California regulates your disclosures, not the factories. Selling into California creates the nexus.
Q: Can we use industry averages?
Yes, for now. The GHG Protocol allows it. Just disclose methodology clearly and improve over time.
Q: When is the first reporting deadline for SB 253?
CARB has proposed August 10, 2026, for the reporting of Scope 1 and Scope 2 emissions (covering FY2025 data).
Q: What are the penalties for non-compliance?
CARB can issue administrative penalties up to $500,000 per reporting year. Factors include the violator’s past compliance, good faith efforts, and the severity of the violation.
Q: Does SB 253 require assurance (auditing)?
Yes. Limited assurance is required for Scope 1 and 2 starting in 2026. Reasonable assurance (a stricter standard) is required starting in 2030.
Disclaimer: This guide is for informational purposes only and does not constitute legal advice. Consult with your legal counsel regarding specific compliance obligations.
