On March 8, 2023, the Biden Administration announced a further opportunity for companies to take advantage of significant federal funding intended to promote clean manufacturing and reduce greenhouse gas emissions in federal procurement. In line with the Biden Administration’s push to implement a clean energy economy (as we have previously covered, for example, here and
FAR Council Delivers Last-Minute Holiday Gift by Extending the Comment Period on Proposed Rule Imposing Mandatory Climate Disclosures for Federal Contractors
On December 23, 2022, the Department of Defense (“DoD”), General Services Administration (“GSA”), and National Aeronautics and Space Administration (“NASA”) extended the comment period on the proposed rule, “Disclosure of Greenhouse Gas Emissions and Climate-Related Financial Risk,” from January 13, 2023 to February 13, 2023. As we summarized previously, the proposed rule would, if
Your Climate Disclosures or Your Contracts? Federal Contractors Face Unprecedented Proposed Rule for Mandatory Climate Disclosures
In a major and largely unprecedented development for federal contractors, the White House announced on November 10, 2022 that the FAR Council will publish early next week a proposed rule that would, if finalized, require many federal contractors receiving more than $7.5 million in annual federal contracts to inventory and publicly disclose Scope 1 and Scope 2 greenhouse gas (GHG) emissions on an annual basis. Contractors deemed “major”—those that receive annual federal contracts in excess of $50 million—would be further required to disclose annually their Scope 3 GHG emissions and climate-related financial risk assessment process. Beyond disclosures, and perhaps more significantly, major contractors would also be required to set emission-reduction targets to meet the goals of the Paris Agreement, and have those targets validated by the Science Based Targets Initiative (SBTi). This last element of the proposal is a notable departure—and escalation—from similar pending proposals from the U.S. Securities and Exchange Commission, which only propose to require GHG disclosures from regulated companies and funds, not substantive goals or changes.
Federal Government Seeks Low Carb(on) Diet for Most Construction Materials
On October 4, 2022, the General Services Administration (“GSA”) published a Request for Information (“RFI”), seeking information “about the availability of domestically manufactured, locally sourced low-carbon construction materials” for governmentwide construction procurement. Significantly, the results of the RFI are expected to help inform how the GSA will spend the $2.15 billion appropriated through Section 60503
Further Federal Action on Government-Wide Sustainability Goals
On August 31, 2022, the White House Council on Environmental Quality (“CEQ”) released instructions to federal agencies for implementing Executive Order (“EO”) 14057 Catalyzing Clean Energy Industries and Jobs Through Federal Sustainability. As we have covered previously, EO 14057 identified ambitious sustainability goals for federal agencies, including:
- 100 percent carbon-free electricity by 2030;
- 100 percent zero-emission vehicle fleet by 2035;
- net-zero emissions building portfolio by 2045;
- 65 percent reduction in Greenhouse Gas (“GHG”) Scope 1 and 2 emissions from Federal operations; and
- net-zero emissions from federal procurement, including a “Buy Clean” policy to promote use of construction materials with lower embodied emissions.
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GSA Exploring New Regulations to Reduce Single-Use Plastic in Federal Procurement
On July 7, 2022, the General Services Administration (“GSA”) published an Advance Notice of Proposed Rulemaking (“ANPR”) seeking public comment on revising GSA policies and procedures to reduce single-use plastics in purchased products and their packing and shipping materials. GSA is acting in furtherance of the directives set forth in Executive Order 14057, Catalyzing Clean Energy Industries and Jobs Through Federal Sustainability (discussed here), which, among other things, directed GSA to use federal procurement policy as a way to support a recycled content market. Thus, for purchases under the Federal Supply Schedule program, as well as GSA’s construction, concession, and facility maintenance contracts, GSA seeks to reduce reliance on single-use plastics and move toward what the Administration considers to be “environmentally preferable” materials.
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President Biden Employs Defense Production Act and Tariff Act in Domestic Clean Energy Manufacturing Push
On June 6, 2022, President Biden issued a White House Fact Sheet (“Fact Sheet”) outlining President Biden’s “Bold Executive Action to Spur Domestic Clean Energy Manufacturing” along with five related Defense Production Act (“DPA”) Presidential Determinations[1] (“Presidential Determinations”) and a Declaration of Emergency and Authorization for Temporary Extensions of Time and Duty-Free Importation of Solar Cells and Module from Southeast Asia (the “Declaration”). The Fact Sheet states the President is (1) authorizing use of the DPA to accelerate domestic production of clean energy technologies; (2) encouraging domestic solar manufacturing capacity through the use of master supply agreements with enhanced domestic preferences; and (3) creating a two-year trade regulation bridge as domestic manufacturing for solar products scales up. The White House stated that these actions are being taken to lower energy costs, reduce risks to the power grid, and mitigate climate change. The Department of Energy (“DOE”) also released a statement on June 6 about the DPA Presidential Determinations which describes DOE’s concerns with regard to each material or technology for which a determination was issued. The statements made by the White House and DOE also make clear that these actions to employ the DPA are part of the Administration’s broader “all of government” approach to addressing Environmental Justice, with the intention to “strongly encourage projects with environmental justice outcomes that empower the clean energy transition in low income communities historically overburdened by legacy pollution.”
GSA Paves Way for National Carbon Standards in Construction Materials
On March 30, 2022, the General Services Administration (“GSA”) announced the first-ever national standards for “clean” concrete and asphalt that apply to all new GSA-funded projects using more than 10 cubic yards of concrete or asphalt. Acting in furtherance of the directives set forth in Executive Order 14057, Catalyzing Clean Energy Industries and Jobs Through
DoD Requests Public Input on Sustainability and Climate-Related Disclosures
On July 8, 2021, DoD published a request for information (RFI) soliciting the input of interested parties on sustainability initiatives and climate-related disclosures. DoD’s request asks companies to comment on their voluntary efforts in measuring and disclosing Greenhouse Gas (GHG) Emissions, Environment, Social, and Governance (ESG) reporting, and Supply Chain GHG and Risk Management, but could be a prelude to a mandatory disclosure scheme for defense contractors.
ESG and other disclosures pertaining to sustainability and climate are growing in importance for a wide range of companies, as investors, stakeholders, and customers increasingly are interested in and evaluating progress on sustainability-related disclosures and the business practices and plans underlying them. Companies are now under more pressure to demonstrate forward movement on ESG and other sustainability metrics, particularly in the areas of climate change, environmental justice, industrial chemical use, diversity and inclusion, and compliance and ethical business practices.
Over the last several years, more and more companies have voluntary published sustainability reports. However, there is an evident lack of standardization in these disclosures, and companies vary greatly in what they measure and disclose. Without a standardized ESG disclosure framework, investors, consumers, stakeholders and the government may be unable to reasonably evaluate and compare companies’ ESG practices and risks.
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Revisions to DOJ’s Corporate Compliance Guidance Indicate that a Dynamic, Data-Driven and Well-Resourced Compliance Program is More Important than Ever
On Monday, June 1, 2020, the Department of Justice’s (DOJ’s) Criminal Division issued an updated version of the “Evaluation of Corporate Compliance Programs” guidance. The guidance was originally published by the Criminal Division’s Fraud Section in February 2017, and last revised in April 2019. The updated guidance emphasizes the need for companies to