NACS Comments on Greenhouse Gas Emissions Proposed Rule

The rule would require certain federal contractors to disclose their greenhouse gas emissions.

February 16, 2023

ALEXANDRIA, Va.—NACS, along with NATSO and SIGMA, have filed comments on a proposed rule to amend the Federal Acquisition Regulation (FAR) that would require certain federal contractors disclose their greenhouse gas emissions and climate-related financial risk and set science-based targets to reduce their greenhouse gas emissions. The Department of Defense, General Services Administration and National Aeronautics and Space Administration have issued the proposed rule.

In the comments, the groups expressed “strong concerns” over the proposed rule’s impact on the convenience and fuel retailing industry, particularly with regards to small businesses.

“The Proposal exceeds the statutory authority of the agencies, conflicts with the policy goals of giving small businesses opportunities for contracting and subcontracting opportunities, creates unwieldy economic burdens even on businesses that do not contract with the government, and takes contract regulation into a political sphere that would be harmful to the objective administration of competition for government contracts,” wrote the associations in the comments.

In March, the Securities and Exchange Commission (SEC) proposed rules that would require publicly traded companies to disclose their environmental, social and corporate governance (ESG) plans.

Parts of this SEC proposed rule leverage existing standards, such as the GHG Protocol Corporate Accounting and Reporting Standard and the recommendations of the Task Force on Climate-related Financial Disclosures, and are the same standards that are leveraged in this newly proposed rule.

“While there are some similarities between the content of the disclosures in the SEC and FAR proposed rules, this proposed FAR rule specifically requires the Federal contractors with significant Federal contracts to provide their disclosures using the CDP Climate Change Questionnaire, wrote the agencies.

According to NACS and the associations, “It is not within the purview of the agencies proposing this rule to decide on a business practice that the agencies think will benefit the business of all government contractors and then make it a requirement. Unfortunately, the Proposal takes exactly that approach.”

The proposed rule cites that more than 3,600 companies globally, representing over one-third of the global economy's market capitalization, have voluntarily committed to setting science-based targets for reducing emissions. However, the associations note that these are mostly large businesses.

“Small businesses simply do not have the resources to make similar claims and measure them accurately. Here too, the Proposed Rule falls short of what is required to analyze the small business impacts of its implementation,” wrote the associations.