U.S. Government Contractors, IT Partners Face Potential Carbon Emissions Disclosure Regulations

Nearly 1,400 federal government contractors would be required to submit their full greenhouse emissions data to bid for US federal contracts under the Federal Supplier Climate Risks and Resilience Proposed Rule, according to research from Persefoni.

Under the current proposal:

• Roughly 1,394 "major" government contractors with more than $50 million in annual federal contracts will be required to publicly disclose Scope 1, Scope 2, and relevant categories of Scope 3 emissions, Persefoni estimated.
• "Significant" contractors with between $7.5 and $50 million in contract obligations will need to report their Scope 1 and 2 emissions, not from their supply chain.
• Small to medium businesses (SMBs) are not required to meet the "major" contractor disclosures, even if their contracts total surpasses the $50 million threshold. SMBs would only need to meet the disclosure requirement for "significant" contractors.

In a prepared statement about the research and related disclosure trends, Persefoni CEO Kentaro Kawamori said, in part: "Just like in the private sector, other nations have begun demanding US companies disclose climate data because climate risk is financial risk. US businesses are compelled to react, and they do so with limited support from their own government."

Consultation for the rule, part of President Biden's Executive Orders on Climate-Related Financial Risk and Catalyzing Clean Energy Industries and Jobs Through Federal Sustainability, closed in February 2023, with a final conclusion likely to be reached in mid-2023, the report said.

Meanwhile, mandatory climate disclosure regulations are already rolling out in such countries and regions as the United Kingdom, European Union, and Asia, the research noted.

Persefoni develops Climate Management & Accounting Platform (CMAP) software that allows businesses, financial institutions, and governmental agencies to managing their organization's climate-related data, disclosures, and performance.