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Sustainability & Recycling

California Alerts 4,000 Companies To New Climate-Reporting Rules

• By  Textile Excellence
• November 02, 2025

The state of California has issued formal notices to more than 4,000 companies operating within its jurisdiction, requiring them to prepare for enhanced climate-related disclosure obligations under newly enacted legislation. The move signals growing regulatory pressure on global supply-chains including those of the Indian textile industry.

The legislation demands that companies disclose greenhouse gas (GHG) emissions across their operations and value-chains, implement risk-management strategies and publish credible mitigation plans. Failure to comply could trigger significant penalties or restrictions on market access in a state which imports textiles worth several billion dollars annually.

India’s textile and apparel exporters already face a complex web of global sustainability requirements. The U.S. remains one of India’s largest apparel markets, accounting for an estimated US$ 4.8 billion of exports in 2024, representing roughly 6 % of U.S. apparel imports. The California regulation adds a fresh dimension: Indian suppliers who feed into U.S. and global supply chains could be asked to deliver data on embodied emissions, energy use, chemical inputs and end-of-life waste management.

Market observers highlight that the textile industry is particularly vulnerable given its high water and energy consumption, intricate multi-tier supply networks and growing regulatory scrutiny in destination markets. India’s textile sector contributes about 2 % of national GDP and directly employs more than 45 million people. It has committed to achieving net-zero carbon emissions by 2070, and schemes such as the National Technical Textiles Mission and PLI incentives aim to boost production of sustainable fibres and technologies.

Industry associations say this Californian move may accelerate adoption of transparency tools such as digital product passports (DPPs), environmental footprints and supply-chain traceability mechanisms. India’s exporters that already integrate recycled fibre content, zero-liquid-discharge systems and traceability platforms could gain a competitive edge. The challenge lies in scale: only a fraction of small and medium enterprises (SMEs) currently have the data infrastructure to meet such demands.

The legislation demands that companies disclose greenhouse gas (GHG) emissions across their operations and value-chains, implement risk-management strategies and publish credible mitigation plans. Failure to comply could trigger significant penalties or restrictions on market access in a state which imports textiles worth several billion dollars annually.