SB 253 and SB 261: What California's Climate Disclosure Laws Mean for Fashion Brands

Status: ✅ SB 253: Scope 1 & 2 due November 10, 2026; Scope 3 from 2027. SB 261 is paused.

For apparel and footwear brands doing business in California, new climate disclosure requirements are taking effect under SB 253 (the Climate Corporate Data Accountability Act) and SB 261 (the Climate-Related Financial Risk Act). Together, these laws set state-level rules for how large brands must report greenhouse gas emissions and climate-related financial risks.

The first SB 253 deadline for Scope 1 and Scope 2 emissions is November 10, 2026. Large apparel and footwear companies such as Columbia Sportswear, Under Armour and Crocs are among those CARB expects to report.

Scope 3 reporting will begin in 2027. This means fashion brands should start preparing Scope 3 data now: establish processes to collect supplier data and document calculations and assumptions using the GHG Protocol as a foundation.

Below, see who is in scope, what to send for the first report, and how to prepare for 2027.

Looking for a Carbon Accounting solution? Find our complete, hands-on guide to Carbon Accounting and the GHG Protocol for apparel and footwear brands here.

What Is SB 253 and What Must Fashion Brands Report?

SB 253 (the Climate Corporate Data Accountability Act) introduces mandatory greenhouse gas (GHG) emissions reporting for large companies doing business in California. For apparel and footwear brands, this marks the start of regulated emissions disclosure at the state level.

SB 253 requires in-scope brands to measure and disclose their emissions in line with the GHG Protocol:

• Scope 1 emissions: direct emissions from sources the brand owns or controls, from 2026.

• Scope 2 emissions: indirect emissions from purchased energy, from 2026.

• Scope 3 emissions: value-chain emissions, from 2027.

For fashion brands with complex global supply chains, Scope 3 will be particularly significant. It requires data beyond direct operations, including raw material sourcing, supplier manufacturing, and logistics.

Which Apparel and Footwear Brands Are Affected by SB 253?

A fashion brand is in scope of SB 253 if all three of the following conditions are met:

1. It is a U.S. company (or a U.S. subsidiary): The brand has a legal company registered in the United States. This includes U.S. subsidiaries of international fashion groups. 

2. It exceeds $1 billion in annual revenue: The company or subsidiary had more than $1 billion in revenue in each of its last two fiscal years (CARB uses the lower of the two). Revenue is counted for each company separately, not for the group as a whole.

3. It does business in California: A company is considered to be doing business in California if at least one of the following applies:

   1. It is registered in California, or its headquarters is in California.

   2. Its California sales are above the threshold ($757,070 for 2025, or 25% of total sales, whichever is lower).
      

This means SB 253 does not apply to all fashion brands. It targets large companies that meet specific revenue and California business thresholds.

CARB’s preliminary list of potentially covered entities includes fashion brands such as Nike, Inc., Skechers U.S.A., Inc., PVH Corp., Tapestry, The Gap, Inc. and Deckers Outdoor Corporation

What Is the SB 253 Timeline?

The first deadline is November 10, 2026, for Scope 1 and Scope 2 emissions. Its rules for the first report are now final. Requirements increase in 2027. Let’s break it down:

What Do Fashion Brands Need to Report in 2026?

For apparel and footwear brands, 2026 is the first reporting year under SB 253 and is designed as a transition period.

Brands report Scope 1 and Scope 2 emissions for the prior fiscal year, using data they already had or were collecting on December 5, 2024. Brands without data send a statement instead. Assurance is not required to file. 

What Changes in 2027?

2027 is the first year that Scope 3 emissions would be reported under SB 253. Scope 3 covers emissions in the value chain, outside a brand’s own operations. For apparel and footwear brands, Scope 3 is usually most of the footprint, mainly from materials and manufacturing.

For 2027, CARB proposes:

• Scope 3 reporting in five categories: purchased goods and services (Category 1), fuel- and energy-related activities (3), waste (5), business travel (6) and employee commuting (7).

• Limited assurance on Scope 1 and Scope 2, checked by an independent third party.

• A yearly deadline of November 10.

Category 1 needs material and production data from suppliers, so brands should start collecting it now. To avoid repeating the same manual work every year, we recommend using an emissions management tool.

Add Carbonfact’s Modules Progressively to Meet SB 253

1. Start with corporate GHG reporting for SB 253 (Scope 1 and 2, aligned with the GHG Protocol).
2. Add product‑level LCA to refine Scope 3.1 (purchased goods and services) and strengthen SB 253 Scope 3 disclosures from 2027 onward.

Learn More About Carbonfact’s Carbon Accounting Software

How Should Fashion Brands Prepare Their First SB 253 Submission?

The first report is due November 10, 2026. It covers Scope 1 and Scope 2 only. CARB's reporting guidance makes this first year lighter than later years. Here are the steps for your first submission:

1. Confirm the Brand Is in-Scope

Check each U.S. legal entity against the three conditions above. Each company is responsible for its own assessment. If several group entities are in scope, the parent can file one consolidated report.

2. Find the Right Fiscal Year

• Fiscal year ends on or before February 1 (e.g., January 31, 2026): report the fiscal year that ended in 2026.

• Fiscal year ends after February 1 (e.g., December 31): report the fiscal year that ended in 2025. Brands may report a more recent year if the data is ready.
  

3. Define the Reporting Boundary and Collect Data

Decide which operations and facilities the report includes. The GHG Protocol offers three approaches: operational control, financial control, or equity share. The law covers Scope 1 and 2 emissions “regardless of location”, so the boundary includes operations worldwide, not just in California.

For this first report, brands may use data they already had or were collecting on December 5, 2024. They don’t have to collect new data just for this report.

4. Choose and Disclose Emission Factors

No specific dataset is required for Scope 2. Brands can use the US EPA’s eGRID 2023, the eGRID 2024 dataset from the Cornerstone Sustainability Data Initiative, or another credible source. CARB encourages brands to name the factors and sources used.

5. Document Methods and Assumptions

Explain any estimates and proxies used to fill data gaps. CARB encourages brands to describe their methodology, data sources and assumptions. This also prepares the brand for assurance, expected from 2027.

6. Choose What to Submit

CARB accepts four formats for 2026:

• An existing annual or sustainability report that includes Scope 1 and 2 emissions.
• Scope 1 and 2 data already reported to another program or voluntary initiative, such as CDP.
• CARB's draft Scope 1 and 2 reporting template (Excel, published October 10, 2025). Its use is voluntary.

• A statement of non-reporting, if the brand had no Scope 1 and 2 data and was not collecting and not planning to collect any on December 5, 2024. These statements will be made public.

7. Assurance Is Not Needed to File in 2026

Assurance means an independent third party checks the reported emissions. For this first year, CARB accepts reports without assurance. From 2027, CARB proposes to require limited assurance on Scope 1 and Scope 2.

8. Submit by November 10, 2026

Use CARB's voluntary intake platform on the Climate Disclosure webpage, or email climatedisclosure@arb.ca.gov. The platform also collects billing contacts: CARB sends fee notices by December 10, and fees must be paid within 60 days.

How Can Carbonfact Help Your Brand Comply With SB 253?

Carbonfact is a Carbon Accounting and Reporting platform built for apparel and footwear brands. Here is how our platform supports your brand:

• Carbon accounting: Carbonfact offers a fashion-specific carbon accounting platform. It centralizes Scopes 1, 2, and 3 emissions in one place and is built on GHG Protocol–aligned, activity-based methods, audited by PwC.

• Data cleaning: Carbonfact collects and cleans data from ERP, PLM, traceability tools, and spreadsheets, making it usable for SB 253 reports from 2026 onward.

• Data gaps filling: 150K+ fashion-and region-specific emission factors ensure accurate results – even when your data is incomplete.

• Scope 3 accuracy: Our platform improves Scope 3.1 accuracy by linking corporate emissions to product‑level LCAs and supplier data, which is critical for fashion brands where supply chain emissions dominate.

• Factories: A powerful platform feature where you can easily manage and update your factories' energy data directly on our platform: heat mixes, meters, and utility bills.

• Reporting: Carbonfact generates audit‑ready GHG reports that follow the GHG Protocol and can be used directly for SB 253 submissions, as well as CSRD, CDP, and SEC‑style reporting.

What Are the Penalties Under SB 253?

• Maximum penalty: Apparel and footwear brands that fail to file required reports or comply with SB 253 may face penalties of up to $500,000 per reporting year.

• Enforcement body: The California Air Resources Board (CARB) oversees compliance.

• Factors considered: CARB considers the brand’s past and present compliance, and whether and when it took good-faith steps to comply.

• Scope 3 protection: Brands are not penalized for Scope 3 misstatements made with a reasonable basis and disclosed in good faith. Until 2030, Scope 3 penalties apply only to failing to file. This protection does not apply to Scope 1 or Scope 2 emissions.

What Does SB 261 Mean for Fashion Brands?

SB 261 (the Climate-Related Financial Risk Act) requires large brands to assess and disclose how climate change could impact their financial performance and operations. Unlike SB 253, SB 261 does not focus on emissions data, but on climate-related risks and how companies manage them.

Which Apparel and Footwear Brands Are Affected by SB 261?

SB 261 applies to US-registered companies, including US subsidiaries of foreign groups, with over $500 million in total annual revenue that do business in California.

• Revenue counts sales worldwide, not just in California.

• It’s calculated per company, not for the whole group.

• CARB uses the lower of the last two fiscal years.

• “Doing business in California” follows the same definition as SB 253.

What Is the Status of SB 261?

SB 261 was adopted in 2023 with an initial reporting deadline in January 2026; however, the Ninth Circuit Court of Appeals ordered a pause while a legal challenge is heard. CARB has confirmed it will not enforce SB 261 for now, and that reporting is voluntary. More than 120 companies have filed reports voluntarily, and a new reporting timeline will be announced once enforcement resumes.

What Would Fashion Companies Need to Report Under SB 261?

SB 261 requires companies to publish a climate-related financial risk report every two years and make it publicly available.

The report should:

• Identify and assess the company’s exposure to climate-related financial risks.
• Describe the measures taken to mitigate and adapt to those risks.

(Both of these bear similarity to the Corporate Sustainability Reporting Directive’s (CSRD) double materiality assessment.)

The reported risks fall into two main categories: physical and transition.

• Physical risks stem from the direct impacts of climate change, such as extreme weather events, rising sea levels, or wildfires. These risks can disrupt supply chains, damage manufacturing facilities, and increase raw material costs.

• Transition risks, on the other hand, arise from shifts toward a low-carbon economy. These include changes in government regulations, technological advancements, and evolving consumer preferences.

Reports should be aligned with the Task Force on Climate-related Financial Disclosures (TCFD) framework or equivalent standards such as ISSB. While TCFD was formally disbanded in 2023, its recommendations were incorporated into the ISSB standards. As a result, fashion brands already reporting under ISSB or International Financial Reporting Standards (IFRS) are largely aligned with SB 261 requirements.

The four key elements of the TCFD framework are:

• Governance – how an organization will structure its business operations in response to climate-related risks.

• Strategy – how climate-related risks will impact a company’s strategy, business operations, and financial planning.

• Risk management – how an organization will identify, assess, and manage climate-related risks.

• Metrics and targets – how an organization will measure climate-related risks and opportunities.

Companies are allowed to publish parent-level reports as well as financial risk disclosures that have already been prepared in accordance with other reporting requirements like CSRD.

Carbonfact – Measure Once Report Everywhere

The issue we frequently hear from brands is that new reporting requirements are highly overwhelming, making it challenging to navigate regulatory hurdles without becoming trapped in endless administrative tasks. That’s where Carbonfact’s philosophy comes in: Measure once – report everywhere.

Carbonfact builds a single, GHG‑Protocol‑aligned Scope 1, 2, and 3 inventory for your brand.  Then you can reuse that data everywhere – from SB 253 to CSRD, B Corp, to SBTi – instead of rebuilding new carbon accounts for every regulation.

SB 253 will require annual disclosure of Scope 1–3 emissions. Carbonfact centralizes all Scopes in one platform and automatically produces an audit‑ready GHG inventory that can be used to populate SB 253 reports instead of manually stitching spreadsheets or consultant PDFs every year.