More California Laws to Vex Food Processors: Carbon Footprint and Climate Risk

Oct. 12, 2023
Two new laws will require large corporations operating in California to disclose both their carbon footprints and their climate-related financial risks starting in 2026.

On the same day he signed a law banning four questionable food and drink ingredients, California Governor Gavin Newsom earlier this month signed two bills that would require large corporations operating in the state to disclose both their carbon footprints and their climate-related financial risks starting in 2026.

Senate Bill 253 requires companies that operate in California and have more than $1 billion in annual revenues to report both their direct and indirect emissions. Not just emissions from operating a factory, building or store, but also those from activities like employee business travel and transporting their products.

Senate Bill 261 focuses on the financial risk to the businesses over climate-related issues. It would require covered entities, starting in 2026 and biannually after that, to publish a climate-related financial risk report on their websites. They must compute and disclose their climate-related financial risk according to a recommended framework and list measures they’re adopting to reduce and adapt to climate-related financial risk.

The laws faced opposition from groups like the California Chamber of Commerce and the Western States Petroleum Assn., according to Politico, but eventually gained the support of Google and Apple after the bills’ original versions were amended.

Both bills failed in the assembly last year.

While they’re likely to face continuing legal challenges, the laws are to be implemented by the California Air Resources Board, which needs to pass regulations by Jan. 1, 2025, before companies start filing disclosures in 2026.

While the Securities and Exchange Commission has drafted similar rules, these California laws go beyond what the feds would require.

On the same day (Oct. 7), Newsom signed into law Assembly Bill 418, which in 2027 will prohibit the use of brominated vegetable oil, potassium bromate, propylparaben and red dye No. 3 in food or drink ingredients products sold in the state. While the four ingredients are already banned in the European Union and other nations around the world, the FDA considers them safe.

About the Author

Dave Fusaro | Editor in Chief

Dave Fusaro has served as editor in chief of Food Processing magazine since 2003. Dave has 30 years experience in food & beverage industry journalism and has won several national ASBPE writing awards for his Food Processing stories. Dave has been interviewed on CNN, quoted in national newspapers and he authored a 200-page market research report on the milk industry. Formerly an award-winning newspaper reporter who specialized in business writing, he holds a BA in journalism from Marquette University. Prior to joining Food Processing, Dave was Editor-In-Chief of Dairy Foods and was Managing Editor of Prepared Foods.

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