House Science, Space, and Technology Committee

Environment Subcommittee Investigations and Oversight Subcommittee

CEQ Testimony on Proposed Disclosure of Greenhouse Gas Emissions and Climate-Related Financial Risk Rule

2318 Rayburn
Thu, 30 Nov 2023 19:00:00 GMT

The Subcommittee on Investigations and Oversight and the Subcommittee on Environment will hold a hearing entitled “Missing the Target: CEQ’s Meritless Selection of SBTi,” to examine the Administration’s recently proposed regulation titled “Disclosure of Greenhouse Gas Emissions and Climate-Related Financial Risk.” The proposed regulation would require that federal contractors disclose their greenhouse gas emissions (GHG) to a foreign entity and set science-based targets to reduce their GHG emissions. The hearing will examine the selection process of Science Based Targets Initiative (SBTi), a partnership between CDP (formerly the Carbon Disclosure Project), the United Nations Global Compact, World Resources Institute (WRI) and the World Wide Fund for Nature (WWF).

This hearing was rescheduled from November 14th.

Hearing charter

  • Andrew Mayock, Chief Sustainability Officer, Council on Environmental Quality

On May 20, 2021, President Biden issued Executive Order 14030 (E.O. 14030), Climate-Related Financial Risk. E.O. 14030 seeks to require major federal suppliers to, “publicly disclose greenhouse gas emissions and climate-related financial risks.” On November 14, 2022, the Federal Acquisition Regulation Council (FAR Council) in coordination with the Council on Environmental Quality (CEQ) published a notice of proposed rulemaking (NPRM) to amend the Federal Acquisition Regulations to implement E.O. 14030. If implemented, the proposed rule would separate major federal suppliers into several categories: significant contractors and major contractors. The proposed rule loosely defines a significant contractor as a contractor that received between $7.5 million and $50 million in federal funds during the prior fiscal year. A major contractor is defined as a contractor that received more than $50 million in fiscal funds during the prior fiscal year. The rule would require both significant and major contractors to disclose Scope 1 and Scope 2 GHG emissions, while requiring major contractors to disclose Scope 3 GHG emissions and set science-based reduction targets.

On September 20, 2023, the Committee held a hearing entitled, “A Bar Too High: Concerns with CEQ’s Proposed Regulatory Hurdle for Federal Contracting,” in which stakeholders who would be subject to the rule testified on its impacts. However, this hearing did not have any witness from the Administration and garnered little information on the internal processes leading to the selection of SBTi.

CEQ has agreed to testify about the process used in selecting SBTi as well as the overall goals of the proposed rule. However, to protect the integrity of the rulemaking process, CEQ indicated to the Committee by phone that it will not testify to internal deliberations that are currently ongoing, what the final rule would look like, or actions taken by the FAR Council in relation to this proposed rule.