Navigating California’s SB 253 and AB 1305

Navigating California’s SB 253 and AB 1305: Leveraging GHG Protocol Standards to Address ESG Disclosure Requirements for Food Processing Companies 

For California-based food processing companies, keeping up with environmental and sustainability regulations is vital for ensuring a responsible and compliant business. California recently introduced two ESG (Environmental, Social, and Governance) disclosure regulations: SB 253 and AB 1305. These rules affect companies differently based on their annual revenues, making it crucial for all food processing companies in California to understand these regulations and how they apply to their operations. This blog post will explore SB 253 and AB 1305 while emphasizing the support our software, Energy Manager, offers within the system to align with GHG Protocol standards.

Photo Credit: Ever.Ag

SB 253: The Climate Corporate Data Accountability Act

Enacted in October 2023, SB 253 mandates select companies operating in California to disclose their greenhouse gas (GHG) emissions across all three scopes, as defined by the GHG Protocol:

  • Scope 1: Direct emissions from a company’s operations.
  • Scope 2: Indirect emissions associated with purchased utility energy.
  • Scope 3: Emissions connected to the company’s value chain, including upstream and downstream operations.

SB 253 specifically targets companies with annual revenues exceeding $1 billion. Food processing companies within this bracket must report their Scope 1 and 2 GHG emissions by 2026 and provide reasonable assurance of data accuracy by 2030. Additionally, these companies must start disclosing their Scope 3 GHG emissions by 2027, acquiring limited assurance by 2030. Energy Manager supports companies adhering to SB 253 by using GHG Protocol standards to identify, target, and report emissions.

 

AB 1305: Climate Claims Accountability Act

AB 1305 aims to ensure transparency by requiring companies that make claims about greenhouse gas emission reductions to disclose details about those reductions and how they measure interim progress toward their goal. The evidence generated from our system supports published accountability and reductions in accordance with AB 1305 regulations.

 

Financial risk and SB 261

The data and reports produced by our software help identify and reduce financial risks associated with climate-related factors, which is in line with California’s SB 261 regulation. By offering an essential support system for SB 253, we also provide the necessary information and evidence to comply with SB 261 and mitigate financial risks.

 

Photo Credit: Ever.Ag

Why accurate reporting matters

Accurate reporting of greenhouse gas emissions and climate-related financial risks has regulatory and credibility implications for food processing companies. Ensuring precise information minimizes potential penalties or reputational damage. Energy Manager supports companies in addressing SB 253 and AB 1305 compliance and offers food processing companies in California these key benefits:

  • Strengthen trust with stakeholders.
  • Anticipate future regulatory changes.
  • Assess and manage climate risks.
  • Drive efficiency and competitive advantage.
  • Improve supply chain resilience.

Stay ahead of California’s regulatory changes

California’s SB 253 and AB 1305 disclosure requirements emphasize the growing significance of environmental and sustainability regulations for food processing companies operating within the state. Energy Manager’s integration of GHG Protocol standards ensures accurate and transparent compliance with these new rules, which fosters trust with stakeholders and demonstrates responsible environmental management. By identifying and managing climate risks, food processing companies can improve efficiency, gain competitive advantage, and enhance their supply chain resilience.

As the industry evolves and new regulations emerge, California’s food processing companies should adopt comprehensive, accurate, and transparent reporting practices. Staying ahead of regulatory changes and meeting stakeholders’ increasing expectations ultimately contribute to a more sustainable and environmentally responsible food production sector.

 

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