Increasing Climate Reporting Requirements for Federal Contractors

E&E Publishing’s ClimateWire ran a story today, September 12, reporting on the draft FAR clause proposed by the DOD, GSA, and NASA in May 2016. As earlier blogged here, the proposed rule is expected to impact some 5,500 federal contractors, including about 2,700 small businesses.
 
As drafted, federal contractors with $7.5+ million annually in federal awards will have to disclose whether they publicly report on their greenhouse gas (GHG) emissions management. The proposed rule also raised the possibility of seeking similar disclosures about whether federal contractors publicly report if they conduct any climate risk analyses. Firms under $7.5 million will be encouraged, but not required, to disclose their GHG reporting.
 
I was pleased to share my thoughts on and support of the proposed rule for the ClimateWire article. Corporate Sustainability Advisors also submitted a comment letter to the government supporting the proposed rule and encouraging the government further address its supply chain emissions. This proposed rule is a small step forward for the federal government to mirror what the private sector has been doing with its supply chain for years.
 
To a large extent, publicly-traded federal contracting companies already disclose their GHG emissions to meet investor expectations. There is a close connection between GHG emissions and energy use. Companies that proactively address their GHG emissions often see reductions in their operational costs compared to business-as-usual scenarios where energy usage and costs are frequently ignored. Transparency about GHG emissions provides vital information to customers, investors, and taxpayers.
 
On a related matter, GSA is seeking public comment on the information collection request (ICR) associated with the GHG and other sustainability reporting that will be required of the new Alliant 2 unrestricted contract winners.  The comment period closes on October 24th. As previously blogged here, section G.25 of the Alliant 2 contract terms requires the awardees to publish a “Sustainable Practices and Impacts Disclosure” or SPID within 12 months of the notice to proceed of the master contract and annually thereafter for the life of the contract. After award, Alliant 2 contractors will have to a complete Scope 1 and 2 GHG inventory 12 months after the first SPID (i.e., 2 years after the notice to proceed). GSA provides another 12 months before the contractors must set and report on their GHG reduction targets. GSA is encouraging, but not requiring Scope 3 GHG reporting. GSA will evaluate compliance for these disclosure requirements via the Contractor Performance Assessment Rating Systems (CPARS) annual review.