Is Sustainability Becoming Part of Government Contracting?

At a glance

• Main takeaway: The US government is making a big shift towards sustainability and in doing so they will soon require government contractors to be meet sustainability regulations.
• Impact on your business: It’s not a surprise that many government contractors continue to prioritize cost over sustainability. However, soon they will need to be more transparent with their GHG emissions tracking and other sustainable efforts if they hope to secure lucrative government contracts.
• Next steps: Aprio’s ESG Advisory Services team can assist your company on its sustainability journey and perform climate risk and sustainability assessments, including GHG calculations reductions.

Let Aprio get you started on your ESG journey? Contact our team for a complimentary consultation.

The full story:

As companies and consumers alike become more aware of how their actions impact the environment, it’s no surprise that the government is also starting to take notice. In recent years, there has been a growing push for sustainability to be prioritized in the government sector, especially when considering and selecting government contractors for upcoming projects.

There are a few reasons for this shift. First, the government has a responsibility to be a good steward of taxpayer dollars. By choosing vendors that prioritize sustainability, the government can ensure they are getting the most value for their money in the long term. Additionally, as the effects of climate change become more pronounced, it’s becoming increasingly clear that sustainable practices are not just good for the environment but are crucial for business.

Sustainable measures the government is taking

There are multiple ways that the US government is prioritizing sustainability from investing in renewable energy sources, such as wind and solar power, to promoting energy-efficient buildings and transportation. Additionally, the government is focused on working to reduce greenhouse gas emissions and protecting natural resources.

Further, the government is passing sustainable executive orders in its procurement process, and encourage government contractors to adopt more sustainable practices by leveraging its buying power. The executive order, Catalyzing America’s Clean Energy Economy Through Federal Sustainability directs federal agencies to leverage their buying power to achieve five goals:

1. 100% carbon pollution-free electricity (CFE) by 2030, at least half of which will be locally supplied clean energy to meet 24/7 demand.
2. 100% zero-emission vehicle (ZEV) acquisitions by 2035, including 100% zero-emission light-duty vehicle acquisitions by 2027.
3. Net-zero emissions from federal procurement no later than 2050, including a Buy Clean policy to promote using construction materials with lower embodied emissions.
4. A net-zero emissions building portfolio by 2045, including a 50% emissions reduction by 2032.
5. Net-zero emissions from overall federal operations by 2050, including a 65% emissions reduction by 2030.

The Federal Acquisition Regulatory (FAR) Council has passed FARs that contain sustainability clauses and provisions to increase the consideration of climate-related risks in government contracting, such as:

• FAR clause 52.223-22 Public Disclosure of Greenhouse Gas Emissions and Reduction Goals-Representation, which requires contractors with over $7.5 million in federal contracts to answer whether they do or do not calculate GHG and publicly disclose their emissions.
• FAR clause 52.223-15 Energy Efficiency in Energy-Consuming Products, which requires the purchase of energy-efficient products to contract fulfillment.
• Federal Supplier Climate Risks and Resilience Rule, currently proposed and set to be finalized in 2024, would require major federal contractors to publicly disclose their greenhouse gas emissions and climate-related financial risks as well as set science-based emissions reduction targets. More to come on this rule as information becomes available.

How can government contractors prepare?

The new proposed rules and recently passed FAR clauses will likely place additional responsibilities on government contractors to monitor, report and take steps to reduce greenhouse gas emissions and address climate-related risks.

To start the preparation, contractors should begin the implementation of processes, tools and services to start tracking their greenhouse gas emissions, develop reduction targets, re-evaluate their business for climate-related financial risks, and develop mitigation strategies and business continuity plans.

The bottom line

Of course, implementing sustainability in government contracting has its challenges. Many vendors still prioritize cost over sustainability, and the government must be careful to balance sustainability and affordability. However, by working with vendors and setting clear sustainability goals, the government can help lead the way toward a more sustainable future.

Navigating this new sustainability journey can be a bit intimidating and confusing. However, with the help of Aprio, you don’t have to go at it alone. Aprio’s ESG Advisory Services team can perform climate risk and sustainability assessments, including GHG calculations and reductions.

Related Resources/Assets/Aprio.com articles/pages

The National Deep Energy Retrofit Program Puts a Spotlight on Government Contractors Tracking their GHG Emissions

ESG Offers New Opportunities for Government Contractors to Work with the DOD

The SEC and EU Release New ESG Regulations: How Will Government Contractors be Impacted?

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