The Biden-Harris administration has announced a proposal for a new rule that would require major federal contractors to publicly disclose their greenhouse gas emissions and climate-related financial risks. The proposed Federal Supplier Climate Risks and Resilience Rule would also require high-earning contractors to set science-based emissions reduction targets.

This is one of the things US President Joe Biden is emphasizing at the COP27 climate summit currently taking place in Sharm El Sheikh, Egypt. The proposal is part of Biden’s “federal sustainability plan,” which aims to “achieve net-zero emissions procurement by 2050.”

If the rule were to go into effect, contractors receiving annual contracts over $50 million would have to publicly disclose their scope one, scope two, and some scope three emissions. These categories, outlined by the Greenhouse Gas Protocol, relate to direct, indirect and external emissions. Contractors receiving between $7.5 million and $50 million annually need only publish their direct and indirect emissions data for Scope One and Two. Smaller companies making less than $7.5 million from government contracts would be exempt from the rule.

The US federal government is the world’s largest single buyer of goods and services, spending over $630 billion last year alone, according to a White House statement. By enacting legislation that requires contractors in the state supply chain to be transparent about greenhouse gas emissions, the government hopes to control emissions and “protect federal government supply chains from climate-related financial risks.”