Biden proposes new sustainability rules for federal suppliers

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The United States, one of the world’s largest buyers of goods and services, last week announced a set of new rules for suppliers to meet sustainability goals.

The Biden-Harris administration’s proposed rule on climate risks and federal supplier resilience would require major federal contractors and suppliers to set emission reduction targets consistent with the Paris Agreement and publicly disclose their greenhouse gas emissions and climate-related financial risks, according to a Nov. 10 fact sheet of the White House.

“The United States was the first administration to require our key federal suppliers to disclose their emissions and climate risks and to set themselves targets consistent with the Paris Agreement,” Biden said during COP27, the global climate conference taking place in Egypt takes place month. “As the largest customer in the world with more than [$630 billion] With spending over the past year, the United States government is putting our money where we want to go to strengthen accountability for climate risks and resilience.”

Under the proposed action, federal contractors and large suppliers may be required to disclose Scope 1, Scope 2, or Scope 3 emissions, depending on annual federal obligations. Scope 1 includes all of the company’s direct emissions, e.g. B. Controlled facilities, while Scope 2 includes emissions related to purchased or purchased energy. Scope 3 are all emissions along the value chain that are not categorized in Scope 2, including sourcing and travel.

Climate targets for federal suppliers vary depending on the size of the contract

A guide to which Federal Supplier Climate Risks and Resilience Proposed Rule targets apply to contractors of different sizes.

Whether it’s the federal government or a private company, many purchasing organizations consider supplier emissions as part of broader sustainability goals.

But others are reluctant to implement plans as they weigh requirements and costs, Simon Geale, executive vice president of procurement at supply chain consultancy Proxima, said in an email to Supply Chain Dive.

“The hidden reality is that many others aren’t because they don’t feel the pressure and in many cases are unsure of what is being asked of them,” Geale said.

The proposed action is part of Biden’s Federal Sustainability Plan, which aims to achieve net-zero emissions in procurement by 2050, covering about 85% of emissions associated with the federal supply chain. According to the fact sheet, the federal supply chain is currently estimated to emit more than twice as many emissions as operating the federal government’s 300,000 buildings and 600,000 vehicles.

The proposed action is subject to public comment to be filed with the Regulatory Secretariat Division before January 13, 2023.

Based on the numbers

50%+

The number of federal contractors who are already disclosing climate-related information

18,700

The number of companies around the world that voluntarily disclose emissions and climate risks via CDP (formerly the Carbon Disclosure Project).

4,000

The number of global companies that have set science-based targets to reduce emissions

Source: White House data sheet

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