US government puts supply chains on notice to report emissions
SYDNEY, Nov. 16, 2022 /PRNewswire/ -- Companies around the world are set to be impacted by the US Government's proposed Federal Supplier Climate Risks and Resilience Rule, which requires major federal government contractors report their Scope 1, 2 and 3 emissions.
The inclusion of Scope 3 emissions reporting means organisations supplying goods or services to a major contractor will need to provide emissions data of their own.
The US Federal Government is "the world's single largest buyer of goods and services–purchasing over $630 billion in the last fiscal year alone", according to the Office of the Chief Federal Sustainability Officer.
Under the proposed rule, "major" contractors are those receiving more than $50 million in annual contracts, while those under that threshold will only need to report on Scope 1&2.
Tony Yammine, co-founder and CEO of carbon management start-up Avarni, said:
"Supply chains around the world are on notice. This is a clear message from the US government that if you aren't already measuring and reporting your emissions you should be. It is the critical first step in reducing emissions and addressing climate change.
"Including Scope 3 emissions reporting will have ramifications far beyond those contracting with the US government. Any supplier to those contractors can expect a request for information on their own emissions. At up to 11 times as large as Scope 1&2, tackling Scope 3 emissions must be a priority for government and business – and it's hugely positive to see the US government showing such leadership through its procurement policies."
Avarni's carbon data platform dramatically speeds the process of assessing, planning and monitoring emissions across an organisation and its supply chain. Using artificial intelligence and one of the world's most comprehensive datasets on emissions, Avarni provides enterprises with deep insights into their own along with their suppliers overall emissions profile, while allowing them to forecast the impact of different decarbonisation scenarios.
By aggregating raw supply-chain and spending data, Avarni also helps customers understand their Scope 3 emissions and enables supplier engagement on carbon reduction strategies.
In Australia, KPMG is using Avarni to progressively map climate risk in its supply chain[1]. Despite only launching at the beginning of 2022, Avarni has already analysed more than $100bn in corporate spending data and 150 million tonnes of CO2e in supply chains.
[1] See 2022 KPMG sustainability report (p.23)
Nick Albrow
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www.wilkinsonbutler.com
