Let the Writing Begin: FAR Council Agrees to Draft Proposed Climate Disclosure FAR Amendments
Client Alert | 1 min read | 04.21.22
In another significant development for federal contractors watching as the federal government seeks to broaden its effort to leverage procurement policy to address climate change, the FAR Council, on April 13, 2022, agreed to move forward with drafting a proposed FAR amendment that could mandate public disclosure of greenhouse gas (GHG) emissions and climate related financial risks for major federal contractors.
This action is in accordance with Executive Order 14030, Climate-Related Financial Risk, which directed the FAR Council to consider mandating disclosures of GHG emissions and climate related financial risks for major federal contractors, and follows the Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA) October 2021 Advance Notice of Proposed Rulemaking seeking public comment on a variety of GHG emissions and climate related financial risks topics (discussed here). This development is notable given that EO 14030 only instructed the FAR Council to “consider” amending the FAR but did not otherwise mandate the drafting of climate disclosure amendments.
This development is also consistent with and builds upon other recent activity from a number of federal agencies, including the SEC, which in March proposed a sweeping climate-related disclosure rule for regulated entities covering not only financial risks posed to the entities by climate change but also the GHG emissions of the entity itself. Similarly, on April 4, 2022, the FDIC released a draft statement of principles regarding how large financial institutions can manage climate-related risk.
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