What is the Proposed Federal Supplier Climate Risks and Resilience Rule?

The Proposed Federal Supplier Climate Risks and Resilience Rule addresses climate risks in federal supply chains by requiring suppliers to assess, disclose, and develop strategies for resilience.

DECW1BLOG1In November of 2022, The Biden administration unveiled details about the Federal Supplier Climate Risks and Resilience Rule, scheduled to be added to the Federal Acquisition Regulation (FAR) . 

Being the largest buyer of goods and services--over $600 billion last year, the government has a high chance of financial problems that may stem from climate change. Supply chains have been disrupted, and every sector has felt this, including the federal contractors and subcontractors.

If you are a "major" contractor with more than $50 million in annual contracts, you need to take note of the Federal Supplier Climate Risks and Resilience Rule. You must publicly disclose Scope 1, Scope 2, and the categories of Scope 3 emissions that apply to you. This will include financial risks that are climate-related and set a science-based reduction process and targets. Contractors below $50 million but still above $7.5 million in contracts will need to report Scope 1 and 2 emissions. Only those below $7.5 million in yearly contracts would be exempt from this regulation.

If you're a contractor that falls under these categories, we can help you out with these tools:

First, this White House announcement about the  Proposed Federal Supplier Climate Risks and Resilience Rule.

Next, a free beta tool, made in excel, from the Greenhouse Gas Protocol  (GHG). This has step-by-step instructions on how companies can estimate their emissions. It includes samples and complete instructions. 

 If you qualify for scope 3, you will need this Scope 3 evaluator. 

If you need to delve into this deeper, you can go through the Recommendations of the Task Force on Climate-related Financial Disclosures.

You may also need the How-To Guide For Setting Near-term Targets.  This Science-Based Targets Initiative shows how to submit for validation a science-based target to make reductions in your GHG emissions.

When the time comes, and you would need to disclose your information on GHG, you can read through the CDP Climate Change Disclosure 2022
These outstanding proposals show the federal government's commitment to the environment and federal contractors. By allowing contractors to report their GHG emissions, and an opportunity to reduce them, the current Administration assures that the welfare of both the supply chain and of the contractors is taken into account.

If these regulations sound new to you or are still a bit confused, contact Peter Witts CPA PC, we'll be glad to clarify if this new rule applies.


I’m Kristin, the PWCPA PC Customer Success Specialist. For more information about this topic, or any other, you can always reach me through our customer ticketing system.