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The proposed Federal Supplier Climate Risks and Resilience rule (FAR case 2021-015) is just one of several ESG reporting requirements being implemented in the U.S. and around the world. Companies everywhere are working to navigate this new business environment and determine what rules, regulations, and laws apply to them and data they are required to disclose to be compliant.

The US government proposed this rule as part of its 2021 Federal Sustainability Plan to promote clean energy industries and jobs, and mitigate climate-related financial risk by addressing greenhouse gas emissions and protecting its supply chains from climate disruptions. If passed, all federal suppliers with over $7.5M in annual billing will need to report Scope 1 and 2 emissions, and Major suppliers (>$50M) will also be required to disclose Scope 3 emissions and climate-related financial risks, as well as set science-based emissions reduction targets.

Federal suppliers impacted by this rule can start moving toward compliance, while achieving business wins, by taking three actions:

• Measure current GHG emissions
• Identify and quantify climate risk
• Set emissions reduction target(s) through SBTi

We walk through the steps for each action, highlight important information or decisions to keep in mind and explain the strategic reason for each action.