White House Wants Government Suppliers to Address Climate Change

Acquisition Regulatory Council proposes rule asking fossil fuel companies and others about their carbon footprint disclosures, without imposing any requirements.

Barack Obama has unveiled many of his climate policies in the last year
President Obama has added another element to his climate agenda: getting government suppliers to address climate change and risks. Credit: Getty Images

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The Obama administration has sent American industry another signal about the need to address climate change.

Under a rule proposed last month, companies doing business with the federal government would have to report whether they publicly disclose greenhouse gas emissions, their plans for paring emissions and the risks climate change poses to their operations. The rule wouldn’t require disclosure or set emissions goals.

While the proposal by the Federal Acquisition Regulatory Council (part of the Office of Management and Budget) would have little compulsory weight, it is intended to “drive greater disclosure” by companies in the government supply chain, according to a White House blog post.

It may be a first step toward requiring carbon footprint disclosures, said Paul Gutermann, a Washington, D.C., lawyer who specializes in government contracting.  

“It’s like the camel getting its nose under the tent,” Gutermann said. “What will be interesting is to see what the next step may be.”

The proposal is part of a series of climate initiatives by President Barack Obama, including a call last year to reduce federal government emissions by 40 percent below 2008 levels by 2025.  

The Federal Highway Administration proposed a requirement in April that recipients of federal transportation funds reduce the greenhouse gas emissions created by transportation projects. The rule, still open for public comment, does not set emission goals but asks that climate mitigation be a factor in transit planning.

The Office of Management and Budget is responsible for making out the government’s $400 billion-a-year shopping list. The Acquisition Regulatory Council’s rule would single out companies doing business with the Department of Defense, the General Services Administration and the National Aeronautics and Space Administration (NASA).

“This information will help the government assess supplier greenhouse gas management practices and assist agencies in developing strategies to engage with contractors to reduce supply chain emissions,” according to a summary of the rule published in the Federal Register.

The rule would apply to tens of thousands of companies that do more than $7.5 million in business annually with the government, from giants like Boeing and General Dynamics to the subcontractors that make parts from them. It also would include fossil fuel companies such as ExxonMobil, Conoco Phillips and Royal Dutch Shell.

“It’s a wide net that has a lot of fish,” said Robert Huffman, a partner of Gutermann’s in the government contracting law firm.  

The agency did not respond to requests for comment. But in the blog post on the White House website, three senior administration officials, including the government’s chief acquisition officer, discussed the proposed rule.

“It leverages the federal government’s purchasing power to push for this type of unprecedented disclosure,” the officials said in the blog post.  It “sends another clear market signal that there is strong interest for disclosure of greenhouse gas emissions and climate-related risk data.”

The proposed rule so far has not generated comments to federal officials. Many companies and industry associations said they are still reviewing the specifics to determine what effects the rule may have on business.

“We are still looking into this proposal and talking to our members,” said Megan Van Etten, the senior manager of media relations for the U.S. Chamber of Commerce, in an email.

The proposal hasn’t stirred the National Defense Industrial Association’s 1,600 members, which includes large contractors and small businesses.

“We haven’t gotten feedback from our members about whether the proposed rule would have any effect,” said Ashley Saunders, a spokeswoman for the organization. “At this point we don’t know what impacts it may have.”

For companies like Boeing, the rule would not require additional work because the company already collects data on its carbon footprint and makes it publicly available on its website, said Jason Capeheart, a Boeing spokesman.

ConocoPhillips spokesman Daren Beaudo said the fossil fuel company also makes the information public in the company’s Sustainability Report.

“There is very little muscle in this rule that I can see,” attorney Huffman said.

The rule wouldn’t require any new climate disclosures, Huffman said. What the proposed rule does is ask the question, “Do you or don’t you publicly disclose your greenhouse gas emissions, and if you do where do you make the disclosures?” Huffman said.

It also may signal that companies doing business with the government should begin voluntarily making climate disclosures, said Bruce Bullock, director of the Maguire Energy Institute at Southern Methodist University’s Edwin L. Cox School of Business in Dallas.

“As a business, you want to anticipate what’s coming and adjust your business strategy so that you put yourself in the most advantageous position possible,” Bullock said. “By voluntarily making the disclosures, it sends a message to the government that you are a responsible vendor.”

New York Attorney General Eric Schneiderman, who is leading a coalition of 17 Democratic state attorneys general in a review of the climate practices of the fossil fuel industry, praised the proposed rule as an “urgent need” to improve emissions disclosures.

“This is another meaningful step toward the transparency investors and the public needand are entitled toparticularly from fossil fuel companies and other companies that receive taxpayer dollars,” Schneiderman told InsideClimate News.