One of the obstacles to better ESG assessments is inconsistency of disclosures. The Biden administration’s new requirement for federal suppliers will mean that corporate executives, shareholders, regulators, and third party ratings firms will have much better data for assessing risk.

Acknowledging the vital role of disclosure around environmental impact, the White House Council on Environmental Quality announced today that major federal suppliers will now be required to disclose their environmental impacts through CDP, the global non-profit that runs the world’s environmental disclosure system for companies, cities, states and regions.

Specifically, under the proposed Federal Supplier Climate Risks and Resilience Rule, major suppliers to the U.S. federal government will be required to publicly disclose greenhouse gas emissions (GHG) and climate-related financial risk. It will also ask these companies to take tangible action by setting science-based GHG reduction targets, the most ambitious decarbonization targets available, which are already deployed by major U.S. corporations like AT&T, Ball Corporation and Johnson Controls.

The U.S. federal government is the largest purchasing organization in the world, making today’s announcement one of the most significant supply chain rules in U.S. history. The White House’s new rule is the next step in the Administration’s federal procurement sustainability initiatives, following the Federal Buy Clean Initiative, announced during UNGA/Climate Week earlier this September. The new mandate will be a critical lever for reducing the federal government’s supply chain emissions as the Biden Administration works urgently to meet its goal of a 50% reduction in GHG pollution by 2030, and continues the Administration’s whole-of-government approach to addressing the climate crisis.

In bold new move, Biden Administration makes CDP’s model the law – CDP