Larger Federal contractors are likely to face new requirements to report data on their contributions to greenhouse gas emissions that can impact supply chains under the White House’s proposed Federal Supplier Climate Risks and Resilience Rule announced on Nov. 10.
The proposed rule, the White House said, “would require major Federal contractors to publicly disclose their greenhouse gas emissions and climate-related financial risks and set science-based emissions reduction targets.”
The rule would contribute to goals of President Biden’s Federal Sustainability Plan, which aims to reach a goal of net-zero emissions procurement by 2050.“Under the proposed rule, the largest suppliers including Federal contractors receiving more than $50 million in annual contracts would be required to publicly disclose Scope 1, Scope 2, and relevant categories of Scope 3 emissions, disclose climate-related financial risks, and set science-based emissions reduction targets,” the White House said.
The emission types that must be disclosed under the proposed rule include direct emissions, indirect emissions from purchased energy, and indirect value chain emissions.
Federal contractors with annual contracts of more than $7.5 million but less than $50 million of contracts would have to report much of the same emissions data, while contractors with less than $7.5 million of annual contracts would be exempt.
The White House said that more than half of the current roster of major Federal contractors already reports emissions and climate-related data.
“This proposed rule leverages widely-adopted third party standards and systems that many Federal contractors already use when disclosing their emissions and setting emissions reduction targets, including the CDP environmental reporting system, the Task Force on Climate-Related Financial Disclosures (TCFD) Recommendations, and the Science Based Targets Initiative (SBTi) criteria,” the White House said.
The proposed rule is being issued through a public comment by the Federal Acquisition Regulatory Council (FARC), and will amend the Federal Acquisition Regulation (FAR).
The Information Technology Industry Council (ITI), a tech trade group, said it welcomed the proposed rule.
“The tech industry takes its responsibility to advance climate sustainability seriously, and we welcome the Biden Administration’s commitment to using government procurement as a means to achieve its sustainability goals, while also making the federal supply chain more resilient,” said Gordon Bitko, the group’s executive vice president of policy for public sector.
“While we’re still reviewing the details of the administration’s proposal, we’re encouraged that it builds on existing rigorous corporate sustainability practices and incorporates internationally developed standards for measuring and reporting on sustainability, which will help promote efficient adoption across industries,” he said.