Since CalPrivacy (formerly the CPPA) finalized sweeping updates to the California Consumer Privacy Act (CCPA) regulations in July 2025, risk assessments are now a centerpiece of data privacy compliance. The message from regulators is clear: California is moving decisively toward a proactive, risk-based privacy regime, and businesses will be expected to evaluate and document their higher-risk data practices before they occur.
For many organizations, this marks a significant evolution in compliance expectations. Risk assessments are no longer a matter of internal best practice. They are now a formal, enforceable requirement that will demand new processes, closer coordination across teams, and greater executive oversight and accountability.
Risk Assessments as a Core Compliance Obligation
Beginning January 1, 2026, businesses subject to the CCPA must conduct risk assessments for processing activities that present a “significant risk” to consumers’ privacy. These assessments must be completed before the relevant processing takes place, reflecting a shift away from reactive compliance and toward forward-looking risk management.
The scope of what constitutes “significant risk” is broad. In practice, it will capture many common data-driven activities, including the sale or sharing of personal information, the use of sensitive personal data such as precise geolocation or health information, and the deployment of automated decision-making technologies in consequential contexts like hiring, lending, or housing. Profiling in workplace or educational environments, as well as certain AI and analytics tools that infer consumer characteristics, also fall within the scope.
For companies that rely heavily on data analytics, targeted advertising, or use of automated decision-making technology, this means that risk assessments are likely to become a routine and recurring part of operations, rather than an occasional compliance exercise.
