FAR Council Withdraws Proposed Mandatory Climate Disclosures for Federal Contractor Rule

Mandatory climate disclosures for US federal contractors are officially off the table—at least, for the foreseeable future.  On January 10, 2025, the Department of Defense, General Services Administration, and National Aeronautics and Space Administration announced that they are withdrawing a proposed rule, “Disclosure of Greenhouse Gas Emissions and Climate-Related Financial Risk,” which would have required thousands of federal contractors to inventory and publicly disclose their Scope 1 and Scope 2 greenhouse gas (GHG) emissions and would also have required  “major” contractors to also establish and validate GHG emission-reduction targets tailored to the goals of the Paris Agreement.  The proposed rule, discussed in further detail here, was introduced in November 2022 and resulted in thousands of public comments from the government contractor community and beyond. 

The withdrawal notice explains that the agencies lacked sufficient time during the current administration to finalize the proposed rule “particularly given the large volume of public comments and the policy issues they raised” and that “[t]he agencies’ overall analysis of public comments indicates evolving practices and use of standards in industry, and since the publication of the proposed rule, differing domestic and international regulations covering greenhouse gas disclosures have been created.” 

Following withdrawal of the proposed rule, there is no uniform, government-wide obligation to disclose GHG emissions and reduction targets for purposes of obtaining federal contracts.  However, government contractors should still carefully scrutinize their contracts for bespoke climate-related requests, as they would for any other non-standard contract term.