Biden Unveils Rule Requiring Federal Suppliers to Disclose Emissions, Set Climate Targets
The Biden administration announced today its new proposed Federal Supplier Climate Risks and Resilience Rule, requiring federal government suppliers to disclose emissions and climate-related financial risk data, and to set science-based emissions reduction targets.
The new initiative forms part of the administration’s Federal Sustainability Plan, launched by President Biden in December, which outlines a series of goals and initiatives for the U.S. federal government to achieve net zero emissions by 2050, and including a target to cut emissions from federal procurement to net zero by that date.
The U.S. government is the world’s largest buyer of goods and services, with purchases reaching $630 billion last year. According to the White House statement announcing the new proposals, the supply chain is a major source of the federal government’s emissions footprint, responsible for more than twice the emissions of its 300,000 buildings and 600,000 vehicles combined.
The White House stated that the rules “would strengthen the resilience of vulnerable Federal supply chains, resulting in greater efficiencies and reduced climate risk,” noting the impact that supply chain disruptions over the past year have had on the government and its contractors.
The new rules would require all federal contractors with over $7.5 million in annual contracts to report Scope 1 and 2 emissions, or those under their direct control, while contractors with over $50 million in annual contracts would also be required to publicly disclose relevant categories of Scope 3 emissions, or those occurring across their value chains, as well as climate-related financial risks. The contractors with greater than $50 million in contracts would also be required to set science-based emissions reduction targets.
The White House said that the proposals would leverage disclosure and target-setting standards and systems already in use by many suppliers, including the CDP environmental reporting system, the Task Force on Climate-Related Financial Disclosures (TCFD) Recommendations, and the Science Based Targets Initiative (SBTi) criteria.
Commenting on the administration’s announcement, CDP North America Head of Corporations and Supply Chains, Simon Fischweicher, said:
“Just like any large corporation, the U.S. government needs quality data from suppliers to see the full picture of its environmental impact. The Federal Supplier Climate Risks and Resilience Rule will follow the model that CDP pioneered in our sustainable supply chain work, demonstrating the power of procurement by ensuring that federal suppliers disclose vital environmental data and set ambitious decarbonization targets.”