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Proposed Rule on Federal Contractor Emissions Reporting

During COP27 — the 2022 United Nations Climate Change Conference — the Biden Administration proposed a new rule, the Federal Supplier Climate Risks and Resilience Rule, which would require most federal contractors to publicly disclose their greenhouse gas emissions (GHG) and set their own reduction goals.

The proposed rule is an amendment of the Federal Acquisition Regulation (FAR) and affects two categories of contractors registered in the System for Award Management (SAM):

  • “Significant contractors,” which are defined as those that received between $7.5 and $50 million in federal contract obligations in the prior fiscal year.
  • “Major contractors,” which are defined as those that received more than $50 million in federal contract obligations in the prior fiscal year.

For Member Companies who are federal government contractors, under this proposal there would be a new responsibility and compliance with GHG inventory and climate disclosures. Covered contractors would be required to follow the GHG Reporting Protocol and “major” contractors may need to include their scope 3 emissions. “Significant” contractors would need to inventory their scope 1 and 2 emissions and complete an annual climate disclosure.

Additionally, “major” contractors would need to post an annual climate disclosure using portions of CDP that aligns with the Task Force of Climate Related Financial Disclosures that address a company’s climate risk assessment; develop a science-based target for reducing their GHG emissions and have that validated by SBTi criteria.

Regarding the timing of this rule, “significant” and “major” contractors must comply with the scope 1 and scope 2 GHG inventory requirements within one year after publication of the final rule. Requirements specific to “major” contractors must be completed within two years after publication of the final rule.

Public comments are due January 13, 2023, and Energy Workforce will be forming a working group to develop comments on behalf of the membership. If you would like to join the working group or nominate a colleague, contact SVP Government Affairs Tim Tarpley.

Maria Suarez-Simmons, Director Government Affairs, writes about industry-specific policies for the Energy Workforce & Technology Council. Click here to subscribe to the Energy Workforce newsletter, which highlights sector-specific issues, best practices, activities and more.


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