Proposed Rule Requires Federal Government Contractors, Vendors to Disclose Climate Risks
A new rule proposed by the Obama administration requires vendors and contractors selling goods and services to the federal government to disclose their greenhouse gas (GHG) emissions and climate-related risk data.
The rule proposed by the Federal Acquisition Regulation Council on May 25 seeks to drive greater disclosure of the federal government's supply chain, which reportedly exceeds $400 billion per year.
The Obama administration last year announced a new target to slash federal government GHG emissions by 40% below 2008 levels by 2025. It has also since issued an executive order requiring the seven largest procuring federal agencies to consider GHG emissions and identify opportunities to reduce supply chain emissions.
The proposed rule seeks to provide the government with "up-to-date" information on its suppliers, promote transparency, and encourage "supplier innovation, greater efficiency, and cost savings."
The rule notes that "[p]ublic disclosure of GHG emissions and reduction goals or targets has become standard practice in many industries, and companies are increasingly asking their own suppliers about their GHG management practices."
The federal government's top 100 contractors in 2015 include a number of energy sector heavyweights, including Lockheed Martin, Bechtel, Savannah River Nuclear Solutions, URS Corp., Honeywell International, General Electric, CH2M Hill, Shaw Areva MOX Services, Fluor, Babcock & Wilcox, The Parsons Corp., and Booz Allen Hamilton.
A number of these firms already disclose their climate change risks. Global security and aerospace company Lockheed Martin-the firm to which $36.3 billion were obligated for various actions by the government in 2015, according to the list compiled by the General Services Administration-says it has incorporated climate change impacts in its operational considerations since 2002, when it worked with the Environmental Protection Agency on the Climate Leaders Program, a database of companies' environmental information.
The government's contractor database, www.usaspending.gov, suggests more than 8,000 contracts were signed in fiscal year 2015 relating to electric services, amounting to about $2.5 billion. The most, $22 million, went to San Diego Gas and Electric Co. So far in fiscal year 2016, about $1 billion has been obligated via about 3,800 contracts for electric services.
-Sonal Patel, associate editor (@POWERmagazine, @sonalcpatel)
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