A proposed set of new requirements for aerospace and defense and other federal contractors adds a host of complex new burdens that would be challenging for any company, including small and medium-sized businesses, to implement, according to the head of the Aerospace Industries Association.
Eric Fanning said in a statement this week that the aerospace and defense industry is already working toward mitigating impacts on the climate but new potential requirements “would create a serious operational challenge for many businesses within our industry.”
Last November, the Department of Defense, General Services Administration and NASA issued a proposed rule outlining new mandates for federal contractors to disclose greenhouse gas (GHS) emissions, science-based plans to reduce those emissions, and climate-related financial risks.
The proposal groups contractors into two categories, major federal suppliers and significant suppliers. Major suppliers are those with more than $50 million in federal contracts annually and significant suppliers have between $7.5 million and $50 million in contracts.
In his statement about the challenges, Fanning said, “First, it would allow an international body to determine whether a contractor can continue to do business with the U.S. federal government. In addition, it would ask industry to report on standards that do not currently exist and are subject to change. It would put significant strain on the supply chain including small- and medium-sized businesses that are already stressed due to macroeconomic factors. The requirement to disclose emissions related to end use is particularly challenging, both because of potential security concerns around providing sensitive military data and because industry does not have a current mechanism to gather this extensive amount of information. This uncertainty will add complexity and cost to the process, impacting the workforce and operations.”
The requirement related to end use refers to Scope 3 emissions, which are indirect and may be beyond the control of the manufacturer. For example, if the Army purchases a tank or helicopter, how theses systems get used is beyond the control of the builders.
General Dynamics [GD], in its latest Corporate Responsibility Report, highlights the challenges in tracking and mitigating Scope 3 emissions.
“Because we are a government contractor, many Scope 3 emissions attributable to our company under relevant protocols, both upstream and downstream, are driven by policy choices made by our government customers,” GD says. “For example, armored fighting vehicles, which are built to specifications meant to ensure they function as intended on the battlefield, have emission consequences that are outside of our control.”
GD and other U.S. defense contractors have largely been focused on Scope 1 and 2 GHG emissions, which they have more control over.
At least one standards body is Greenhouse Gas Protocol, a partnership between two organizations, the U.S.-based World Resources Institute, and the Switzerland-based World Business Council for Sustainable Development. GHG Protocol has established global standardized frameworks around measuring and managing greenhouse gas.