TL;DR — California SB 253 passed Phase 1 implementation rules on 2/26/2026, mandating large companies to disclose full-spectrum carbon emissions. With Scope 3 included, Apple’s ranking dropped 35 percentiles, Tesla dropped 50 percentiles. Regardless of which country you’re in, if you’re in Apple’s, Walmart’s, or Microsoft’s supply chain, carbon data is your entry ticket for next year’s orders.

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

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 often ask not about emission reduction targets, nor about writing ESG reports. But more specific questions: “What data do I actually need to prepare to continue doing business with my international clients?”

The source of this question comes from a California law that just passed implementation rules in February 2026. It has a tongue-twisting name: SB 253.

Apple Directly Emits Only 0.38%, Where’s the Remaining 99.6% Hidden?

Let me start with a number.

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

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

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

California SB 253 aims to bring this 86% back to the table.

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. But what truly brought it “to life” was February 26, 2026—when the California Air Resources Board (CARB) officially passed Phase 1 implementation rules.

From “legal text” to “enforceable system,” there was over two years of rulemaking in between. Now, it’s real.

Who’s covered? Three thresholds must be crossed simultaneously:

  1. Commercial entity incorporated in the United States (non-U.S. enterprises’ U.S.-incorporated subsidiaries may also trigger)
  2. Doing business in California (annual sales exceeding approximately $757,000, or California revenue accounting for over 25% of total revenue)
  3. Global annual revenue exceeding $1 billion

CARB’s preliminary list published in September 2025 covers over 3,100 enterprises; industry estimates suggest the final scope could reach over 5,000. This includes not just public companies, but private giants 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 receive third-party assurance
  • Scope 1 & 2: “Limited assurance” 2026–2029, upgrading to “reasonable assurance” in 2030
  • Scope 3 assurance requirements still under CARB pre-rulemaking discussion

What happens if you don’t report? Maximum statutory penalty is $500,000 annually. However, CARB has publicly stated it will adopt good-faith lenient enforcement in the first year, focusing on helping enterprises build capacity rather than penalties. This is regulators’ common “gradually tightening” strategy—get you used to it first, then apply pressure.

Why Can California Do This When Others Can’t?

There’s been an interesting phenomenon these past few 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 SEC suspended implementation itself. When the new administration took office in 2025, they didn’t even bother defending it.
  • EU CSRD: Originally the world’s most ambitious sustainability reporting directive, covering 1,073 data points including climate, biodiversity, and labor rights. Later, due to excessive industry backlash, the 2025 Omnibus amendment drastically scaled back—removing nearly 90% of applicable enterprises and canceling reasonable assurance upgrade requirements.
  • California SB 253: Asks only one question—“How much carbon did you emit?”

California’s cleverness lies in abandoning the EU’s “Double Materiality” philosophical debates, directly narrowing scope to quantifiable carbon emissions. No talk 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 (sister law managing climate financial risk) was sued by the U.S. Chamber of Commerce in the Ninth Circuit and received a temporary injunction, but SB 253 remains unaffected and fully effective.

📊 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 Reshuffle?

The Nature paper mentioned earlier did something quite stimulating for the industry: they re-ranked companies using full-spectrum (including Scope 3) carbon intensity.

Results:

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

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

This is a significant number. When regulations force companies to disclose full-spectrum emissions, investors can no longer rely on beautiful ESG reports to judge carbon performance, but look directly at data. Carbon footprint transforms from PR tool to hard indicator for capital allocation.

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

But the directional trend is correct. When SB 253 mandates full-spectrum disclosure, this reshuffling game will no longer be academic simulation but actually happen.

Five Ripple Circles: Why Does California Law Reach a Small Factory in Bac Ninh Province, Vietnam?

This is what I find most interesting about SB 253—it’s not “direct regulation,” but uses market forces to achieve cross-border enforcement.

Using an iPhone as an example, let’s see how far this law’s power reaches:

Circle 1: Apple itself. Apple is directly subject to SB 253 and must report Scope 3 starting in 2027. Scope 3’s largest component is “Purchased Goods & Services” (Cat. 1), accounting for 61.75%, or 8.2 million tons. To report this figure, Apple must request data from suppliers.

Circle 2: Foxconn. When Apple requests carbon data from Foxconn, it doesn’t appear as “law” but as procurement contract terms. 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 brilliance of long-arm jurisdiction—the law only governs Apple, but market forces enforce the law across borders.

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

Circle 4: Southeast Asian contract manufacturers. By end of 2023, Vietnam had 35 Apple supplier production bases. Foxconn built new factories in Bac Giang and Quang Ninh provinces; Luxshare produces AirPods in Bac Giang; GoerTek manufactures 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 mining. Apple products contain 14 key materials (aluminum, cobalt, copper, lithium, rare earths, etc.) accounting for nearly 90% of shipping weight; Congo supplies about 70% of global cobalt. A typical cobalt chain: Congo eastern artisanal mines → local traders → smelters → battery material companies → battery factories → assembly lines → Apple. When Apple must quantify this chain for compliance, data requirements touch diesel consumption at a mine in Congo’s Katanga Province, water pump energy consumption 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. The starting point driving its operation is just 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, Foxconn—tier-1 suppliers directly serving global brands—you’re in Circle 2. You’ll be among the first to receive carbon data requests.

If you’re mid-sized component manufacturers, passive component makers, module manufacturers, you’re in Circle 3. Your clients will pass requirements down to you.

If you’re making structural components, packaging, logistics, or even recycling processing as SMEs, you’re in Circle 4 or beyond. Requests haven’t arrived yet, but they will within the next 18–24 months.

Back to that client’s opening question—“Can you provide carbon emission details for each kilogram of waste during processing?”

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

Previously, when companies reported Scope 3, they mostly used spend-based methods or generic industry average emission factors—essentially “estimating something close enough.” But SB 253’s third-party assurance mechanism will block this path. Multinational enterprises will be forced to require suppliers to provide precise carbon footprint data based on actual production activities.

Suppliers unable to provide data won’t receive rejection letters. They’ll simply be silently removed from lists in the next procurement evaluation. This is scarier 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 relied mainly on top-down sovereign treaties—Kyoto Protocol, Paris Agreement, nation-to-nation negotiations, national emission reduction commitments. But this mechanism has been visibly weakening in recent years: continuous political and trade conflicts between nations, multilateralism fatigue, federal-level climate policies shelved or reversed in multiple countries.

But carbon emissions haven’t decreased because of this, nor has governance pressure disappeared. It’s simply changed hands.

SB 253 demonstrates a bottom-up path: not relying on sovereign treaties, but commercial contracts; not relying on national enforcement, but multinational enterprises’ 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 to enforce law across borders. The medium of long-arm jurisdiction is data.

Following this logic, Scope 3 will be the real battlefield for the next decade. And at Scope 3’s core is actually product carbon footprint.

Carbon footprint’s biggest challenge was never inability to measure, but information asymmetry—supply chain carbon emission information doesn’t flow, lacks transparency, and isn’t verifiable between nodes. This is also the biggest structural obstacle in global climate governance long-term. From this perspective, SB 253’s essence is less “carbon disclosure law” than anti-carbon emission information asymmetry legislation. It doesn’t directly regulate how much you emit; it first transforms “how much you emit” into an unambiguous, accountable institutional object.

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

But the paper’s directional claim is correct, and this is precisely what SB 253 aims to solve: when full-spectrum disclosure transforms from “estimation” to “actual measurement + third-party assurance,” ranking reshuffles won’t be academic simulation but what will actually happen in the next capital market round.

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. The next decade will see second and third followers. Whoever builds traceable carbon data capability first gains position in the new governance architecture.

Further Reading