TL;DR — California SB 253 passed its first-phase implementation rules on 2/26/2026, mandating large enterprises to disclose full-scope carbon emissions. With Scope 3 included, Apple’s ranking dropped 35 percentiles, Tesla dropped 50 percentiles. This law doesn’t care what country you’re in—if you’re in Apple’s, Walmart’s, or Microsoft’s supply chain, carbon data becomes your entry ticket for next year’s orders.

During a client discussion about waste electronics recycling, they suddenly asked me: “If our client—a U.S. public company—requires us to provide carbon emission details for every kilogram of waste material during processing, can you deliver that?”

I paused. Not because I couldn’t answer, but because this question came earlier than I expected.

When discussing circular economy opportunities and challenges with company leadership, clients’ most frequent question isn’t about emission reduction targets or how to write ESG reports. It’s a more concrete question: “What data should I actually prepare to continue doing business with my international clients?”

The source of this question is a California law that passed implementation rules in February 2026, with a somewhat awkward name: SB 253.

Apple Directly Emits Only 0.38%—Where Is the Remaining 99.6% Hidden?

Let me start with a number.

Apple’s total carbon emissions for fiscal year 2024 were approximately 15.5 million tons of CO₂ equivalent, of which Scope 1 (company facilities and vehicles) and Scope 2 (purchased electricity) combined totaled less than 60,000 tons, representing only 0.38% of the total. The remaining 99.6%—that is, 15.2 million tons—is entirely hidden in places Apple “cannot see”: Foxconn’s assembly lines, TSMC’s semiconductor fabs, Samsung’s display factories, cobalt mines in the Congo.

This isn’t unique to Apple. A March 2026 paper in Nature subsidiary journal Communications Sustainability shows that in global large enterprises’ carbon emission structures, Scope 3 averages 86% of total emissions, with Scope 1 and 2 only comprising 14%.

In other words, when we’ve been reading corporate ESG reports and comparing “which companies are greener,” 86% of the truth has been legally excluded.

California SB 253 aims to bring that 86% back to the surface.

What Exactly Is SB 253? Why Is It Important Now?

SB 253’s full name is the Climate Corporate Data Accountability Act, signed into law by California Governor Newsom in October 2023. However, what truly brought it to life was February 26, 2026, when the California Air Resources Board (CARB) officially passed the first-phase implementation rules.

From “legal statute” to “enforceable system,” there was over two years of rule-making in between. Now, it’s real.

Which companies will be included? They must cross three thresholds simultaneously:

  1. Commercial entities incorporated in the United States (non-U.S. companies’ U.S.-registered subsidiaries may also trigger requirements)
  2. Doing business in California (annual sales exceeding approximately $757,000, or California revenue comprising 25% or more of total revenue)
  3. Global annual revenue exceeding $1 billion

CARB’s preliminary list published in September 2025 covers over 3,100 companies; industry estimates suggest the final scope could exceed 5,000. This includes not just public companies, but large private enterprises as well.

What data must be submitted?

  • August 10, 2026: First report on Scope 1 and 2 (reporting FY2024 or FY2025 data depending on fiscal year end)
  • 2027 onwards: Include Scope 3 (exact filing dates to be determined by subsequent CARB rules)
  • All data must follow GHG Protocol and undergo third-party assurance
  • Scope 1 and 2: “Limited assurance” from 2026–2029, upgrading to “reasonable assurance” in 2030
  • Scope 3 assurance requirements still under discussion in CARB’s pre-rulemaking phase

What happens if you don’t report? Maximum statutory penalty is $500,000 per year. However, CARB has publicly stated it will take a good-faith approach to enforcement in the first year, focusing on helping companies build capacity rather than penalties. This is regulators’ typical “gradual tightening” strategy—first get you accustomed, then apply pressure.

Why Can California Do This When Others Cannot?

There’s been an interesting phenomenon in recent years: major global climate disclosure systems are all retreating.

  • U.S. Federal SEC: Passed climate disclosure rules in March 2024, but to reduce resistance, proactively removed Scope 3. Within a month of implementation, multiple states sued, and the SEC suspended enforcement. After the new administration took office in 2025, it stopped defending the rules entirely.
  • EU CSRD: Originally the world’s most ambitious sustainability reporting directive, covering 1,073 data points across climate, biodiversity, labor rights, etc. Later, due to massive industry pushback, the 2025 Omnibus amendment drastically scaled back—removing nearly 90% of applicable companies and canceling reasonable assurance upgrade requirements.
  • California SB 253: Asks just one question—“How much carbon did you emit?”

California’s brilliance lies in abandoning the EU’s “Double Materiality” philosophical debates and directly narrowing the scope to quantifiable carbon emissions. No discussion of social responsibility, biodiversity, or labor issues. It does one thing: transform carbon emissions from PR rhetoric into auditable, comparable, accountable data.

Meanwhile, SB 261 (the sister law governing climate financial risk) was sued by the U.S. Chamber of Commerce in the Ninth Circuit Court and received a temporary injunction, but SB 253 remains unaffected and fully in force.

📊 Key Data

  • Scope 1 & 2 proportion: Average 14% (typical large enterprises)
  • Scope 3 proportion: Average 86%
  • Apple Scope 1 & 2: Approximately 58,000 tons CO₂e (0.38%)
  • Apple Scope 3: Approximately 15.23 million tons CO₂e (98.2%)
  • Apple Scope 3 “Purchased Goods & Services” proportion: 61.75% (8.2 million tons)
  • Sources: Apple 2025 Environmental Progress Report, Tracenable

Apple Drops 35 Percentiles, Tesla Drops 50 Percentiles: Why the Ranking Reshuffling?

The Nature paper mentioned earlier did something quite provocative for the industry: they used full-scope (including Scope 3) carbon intensity to re-rank companies.

Results:

  • Apple: When looking at Scope 1 & 2 only, ranked in the top 8% among peers (very green); after including Scope 3, dropped to the 43rd percentile. Down 35 percentiles.
  • Tesla: When looking at Scope 1 & 2 only, ranked in the top 14% (automotive industry honor student); after including Scope 3, dropped to the 64th percentile. Down a full 50 percentiles—from top tier directly to bottom tier.

The paper’s conclusion: when investors make capital allocation based on full-scope emissions, $290,000 out of every $1 million investment would be reallocated.

This is a significant number. When regulations mandate full-scope emission disclosure, investors can no longer rely solely on pretty ESG reports to judge carbon performance, but will look directly at data. Carbon footprint transforms from a PR tool into a hard metric for capital allocation.

However, this paper has a limitation: the authors used estimated data from the S&P Global Sustainable1 database, not self-reported actual measurements from companies. Estimation itself heavily relies on industry average factors and statistical modeling, so specific numbers like “dropped X percentiles” have questionable precision.

But the direction it reveals is correct. When SB 253 mandates full-scope disclosure, this reshuffling game moves from academic simulation to an actual occurrence.

Five Ripple Circles: Why Does California Law Govern Small Factories in Bac Ninh Province, Vietnam?

I think the most interesting aspect of SB 253 is that it bypasses direct regulation, using market forces to complete cross-border enforcement.

Using an iPhone as an example, let’s see how many circles this law’s power extends:

Circle 1: Apple itself. Apple is directly subject to SB 253, must report Scope 3 starting in 2027. The largest component of Scope 3 is “purchased goods and services” (Cat. 1), comprising 61.75% or 8.2 million tons. To report this number, Apple must request data from suppliers.

Circle 2: Foxconn. When Apple requests carbon data from Foxconn, this requirement may not appear as “law” but more likely written into procurement contract clauses. Written into supplier codes of conduct, becoming a condition for maintaining supplier qualification. If Foxconn doesn’t comply, it’s not violating California law—it’s losing orders from the world’s largest tech company.

This is the elegance of long-arm jurisdiction—the law only governs Apple, but market forces execute cross-border enforcement for the law.

Circle 3: Key component manufacturers. Foxconn assembles iPhones, but core components are further upstream: chips (TSMC), displays (Samsung), lenses (Largan Precision), passive components (Japan’s Murata). When Foxconn discovers that its own facility’s direct emissions are only part of the picture, and the real bulk is the “embedded carbon” in purchased chips and displays, it must also request data from upstream. The transmission chain extends from California to Hsinchu, Suwon, Kyoto.

Circle 4: Southeast Asian contract manufacturers. By the end of 2023, Vietnam had 35 Apple supplier production bases. Foxconn built new facilities in Bac Giang and Quang Ninh provinces; Luxshare Precision assembles AirPods in Bac Giang; GoerTek produces acoustic components in Bac Ninh. Carbon data requests cascade from tier-1, tier-2, tier-3 suppliers, potentially reaching a micro-connector factory with only 200 workers in Bac Ninh Province, Vietnam.

Circle 5: Raw materials and minerals. Apple’s 14 key materials (aluminum, cobalt, copper, lithium, rare earths, etc.) comprise nearly 90% of shipping weight; Congo supplies about 70% of global cobalt. A typical cobalt chain: Congo’s eastern artisanal mines → local traders → smelters → battery material companies → battery manufacturers → assembly lines → Apple. When Apple must quantify this chain for compliance, data requirements touch diesel consumption at some mine in Congo’s Katanga Province, water pump energy use at Chile’s Atacama Salt Lake, rare earth smelting emissions in Inner Mongolia’s Bayan Obo.

The entire chain spans 15 countries across 4 continents. What drives it all started with a law passed in the California State Capitol.

What Does This Mean for Taiwan Companies?

Which circle are Taiwan companies in?

If you’re TSMC, UMC, ASE Group, Delta Electronics, or Foxconn—direct suppliers to global brands—you’re in Circle 2. You’ll be among the first to receive carbon data requests.

If you’re a mid-sized component manufacturer, passive component maker, or module manufacturer, you’re in Circle 3. Your customers will pass requirements down to you.

If you make structural components, packaging materials, logistics, or even recycling processing as an SME, you’re probably in Circle 4 or beyond. Requirements may not have arrived yet, but will likely appear within the next 18 to 24 months.

Back to that client’s question at the beginning—“Can you provide carbon emission details for every kilogram of waste material during processing?”

My answer then: Not yet, but we definitely will in the future. Because this isn’t just one client’s requirement—it’s an entire industry chain requirement. Whoever builds this capability first gets the ticket to the future.

In the past, when companies reported Scope 3, they mostly used spend-based methods or generic industry average emission factors—frankly, “estimate a roughly similar number first.” But SB 253’s third-party assurance mechanism will gradually block this path. Multinational companies will be forced to require suppliers to provide precise carbon footprint data based on actual production activities.

Suppliers who can’t provide data won’t receive rejection letters. They’re more likely to be quietly removed from lists during the next procurement evaluation. This is often more frightening than fines.

Stepping Back Further: The Handle of Global Climate Governance Is Changing Hands

Writing to this point, there’s actually a bigger observation I want to share.

For the past few decades, global climate governance has mainly relied on top-down sovereign treaties—the Kyoto Protocol, Paris Agreement, nation-to-nation negotiations, national emission reduction commitments. But this mechanism has been visibly weakening in recent years: ongoing political and trade conflicts between countries, multilateral fatigue, federal-level climate policies shelved or reversed in multiple countries.

But carbon emissions haven’t decreased as a result, nor has governance pressure disappeared—it’s just changed handles.

SB 253 demonstrates a bottom-up path: from sovereign treaties to commercial contracts; from national enforcement to multinational corporations’ procurement power. This California law essentially “outsources” climate regulatory power to brand companies at the top of supply chains—Apple, Walmart, Microsoft—letting them use market forces for cross-border law enforcement. The medium of long-arm jurisdiction is data.

Following this logic, Scope 3 will be the real battleground for the next decade. And the core of Scope 3 is actually product carbon footprint.

The biggest difficulty with carbon footprint has always been information asymmetry—carbon emission information in supply chains doesn’t flow between nodes, lacks transparency, and is difficult to verify. This is also the biggest structural obstacle to global climate governance for a long time. From this perspective, SB 253 is more like anti-carbon emission information asymmetry legislation. Its first step: transform “how much you emit” from a fuzzy estimate into a mandatory, auditable institutional question.

Of course, I must be honest—the Nature paper cited earlier has flaws. It uses S&P Global Sustainable1’s estimated data, not corporate actual measurements. The estimation itself relies on industry average factors and statistical modeling. Using such data to argue “ranking reshuffling by 35 percentiles” naturally has questionable precision.

But the direction the paper points to is correct, and this is precisely what SB 253 aims to solve: when full-scope disclosure moves from “estimation” to “actual measurement + third-party assurance,” ranking reshuffling moves from academic simulation into the reality of the next round of capital markets.

This is also why I believe Taiwan companies shouldn’t treat SB 253 as “yet another international regulation”—it’s the first concrete sample of global climate governance route transformation. There will be second and third followers in the next decade. Whoever builds traceable carbon data capability first gains position in the new governance framework.

Streamlined SB 253 FAQ for Taiwan Suppliers

Q1: I’m just a Taiwan supplier—will SB 253 really affect me?

Yes, but not through the California government directly knocking on your company door, but indirectly “governing” you through client procurement and contract requirements. As long as your major clients include companies meeting “operating in California, global annual revenue ≥ $1 billion” criteria, they’ll likely be required to report under SB 253, and you’ll be pulled into their Scope 3 inventory.

Q2: What’s the timeline? How much time do I have to prepare?

SB 253 requires these large companies to disclose Scope 1 and 2 emissions starting in 2026, then add entire value chain Scope 3 emissions starting in 2027. The California Air Resources Board (CARB) has set the first hard deadline: first batch of Scope 1 and 2 emission reports must be submitted by August 2026 at latest, then Scope 3 rolls out in phases. In other words, suppliers have roughly only two to three fiscal years left to practice.

Q3: What data will clients actually request from me? Will it be demanding immediately?

Initially, most clients will start with coarser information: procurement amounts, items, basic product category carbon estimates, plus some standardized questionnaires. But as 2026 and 2027 reporting years approach, combined with third-party verification pressure, more brands will directly require you to provide “specific product line carbon footprints,” “process energy consumption data,” “raw material and transportation data,” even specifying that inventory and calculation methods must comply with international standards like GHG Protocol, ISO 14064/14067.

Q4: If I don’t cooperate in providing data, what’s the worst that could happen?

SB 253 won’t directly penalize Taiwan suppliers—it penalizes those California-reporting companies. But practically, if you consistently cannot provide clients’ needed carbon data, or data quality remains poor, your risk rating within clients will increase: short-term, you’ll be listed as a “high uncertainty” supplier; long-term, when renegotiating contracts or implementing new procurement policies, you might be replaced by competitors with more “carbon data maturity” without explicit disclosure.

Q5: What should my first step be right now?

Don’t fantasize about perfect carbon footprint reports for all products at once. A more practical starting approach: organize company’s existing energy, raw materials, transportation data into a “findable, calculable” state; select 1–2 product lines most important to key clients for a “complete end-to-end” pilot inventory; survey your existing accountants, inspection agencies, consultants to see if any teams are already doing greenhouse gas inventory or SB 253/IFRS S2 work, arrange initial conversations. Get these three things done first. When clients send SB 253/Scope 3 questionnaires and templates during 2025–2027, you won’t be that supplier with no preparation, only able to respond “Let me look into it.”

Further Reading