Feds to Suppliers: Disclose Your GHG Emissions

The U.S. federal government is the largest buyer of goods and services on the planet, with an annual spend of over $450 billion. Scoring that government contract can result in a huge revenue boost for a company and a plum bonus for sales executives. But if suppliers and professional services firms want to continue to do business with federal agencies, they are going to have to do more than settle on a price: The General Services Administration (GSA), which serves as Washington D.C.’s chief procurement office, will soon require its suppliers to disclose their greenhouse gas emissions.

The GSA’s new policy is part of the Obama administration’s directive to federal agencies to work on reducing their carbon footprint. In an executive order signed by President Obama last year, the federal government has to find ways to decrease its total greenhouse gas emissions by 42 percent from 2008 levels within 10 years.

The largest reason why agency heads now have climate change on their task lists is because of cost. The White House says tackling carbon reductions could save taxpayers as much as $18 billion in energy costs. This shift could also boost the amount of electricity the government consumes from renewable sources such as solar and wind by 30 percent during the same time frame. To that end, government agencies now must disclose “sustainability performance plans,” which outline how they are saving taxpayers money by conserving energy, eliminating waste and slashing greenhouse gas emissions.

That is a tall order for the federal government, which at last count owns or leases 360,000 buildings, operates 650,000 fleet vehicles and consumes 129 billion gallons of water annually. But the GSA says it is on board with this agenda. The agency, which has its own sizable footprint with 12,000 employees and an annual budget of approximately $21 billion, announced last year that it would strive to reduce emissions to 54 percent of its 2008 levels over the next ten years. The agency says it has eliminated 2.3 million tons of greenhouse gas emissions over the past eight years, or the equivalent of keeping 5,000 rail cars (or 600,000 tons) worth of coal in the ground annually.

The agency employed several tactics to meet these goals, including the adoption of green building strategies. Increased purchases of clean energy, a commitment to buying more efficient cars and trucks and the embrace of net-zero energy building designs (such as the federal building in Grand Junction, Colorado, shown above) are amongst the ways GSA insists it is practicing what it preaches to other federal agencies.

The GSA is following the lead of many companies in the private sector. Corporations such as Nike and Apple claim they are require their suppliers to be more upfront about their climate change impacts. But the GSA’s new requirements for companies within its supply chain sends a huge signal to the business community, as well as state and local governments. After all, a CDP report released last year estimates that an organization’s supply chain emits greenhouse gases at a rate up to four times as much as its internal operations. And with its massive buying power due to almost half a trillion dollars in annual purchases, the GSA has the heft to drive sustainable supply chain innovation throughout the U.S., and even the world.

Image credit: Library of Congress