The U.S. government is going to ask its suppliers to disclose their greenhouse gas emissions. It’s not going to require it. It won’t happen right away. But this is a big deal.
It’s a big deal because the government is by far the nation’s largest single buyer of goods and services: It occupies nearly 500,000 buildings, operates more than 600,000 vehicles, employs more than 1.8 million civilians, and purchases more than $500 billion per year in goods and services. The General Services Administration, which is more or less the government’s purchasing department, buys more than 12 million products and services, an astonishing number when you stop and think about it. And almost 600,000 companies are registered to do business with the government. Yes, 600,000!
In any event, although they won’t be required to disclose their greenhouse gas emissions, and although it’s not clear when or how or even if the government will give preference to companies or products with a lower carbon footprint, you can be sure that many, if not most, of those 600,000 companies will soon think seriously about counting carbon. Once they do, they’ll begin to look at opportunities to curb their energy use–by operating more efficiently, opting for greener offices, promoting telecommuting, whatever.
To learn more about how this might work, I spoke by phone with Steve Leeds (left), who is the Senior Counselor to the Administrator for the U.S. General Services Administration as well as the GSA’s senior sustainability officer. He is
leading GSA’s efforts under Executive Orders 13423 and 13514 to fulfill GSA’s responsibilities and opportunities under those EOs as well as assisting GSA’s Federal agency customers with solutions to help them integrate sustainability throughout their agencies and achieve their sustainability goals.
His job of greening GSA’s supply chain is complicated by the fact that
The procurement of goods and services by the U.S. Government is a unique activity that is governed by a web of specialized rules, regulations, statutes, and policies outside of the realm of commercial contract law. These rules arise out of the nature of the Government as a contracting party and the distinctive forms and procedures used in the procurement process. The rules governing this process are contained in statutes, regulations, and decisions, many of which are designed to protect the public‘s interest and assure fair treatment of companies that enter contracts with the Government. Most of these rules apply to all agencies, but some are specific to a certain agency.
Unhappily, this is the language that your government speaks. Fortunately, Steve, who is 64 years old and a real estate lawyer from Atlanta, speaks English, so I was get some sense from him of what is really going on.
Last October, President Obama signed an executive order on sustainability that set ambitious goals for the government’s operations. It requires agencies to meet energy, water and waste reduction targets, among them:
o 30% reduction in vehicle fleet petroleum use by 2020;
o 26% improvement in water efficiency by 2020;
o 50% recycling and waste diversion by 2015;
o 95% of all applicable contracts will meet sustainability requirements
But, of course, the devil is always in the details, and so the White House asked GSA to look into what is feasible and practical under Section 13 of the order, which is about “Vendor and Contractor Emissions,” i.e., the government’s supply chain.
“This is a real opportunity for the federal government to look at everything we do through the lens of sustainability,” Leeds says. The government will re-examine workplace design, video conferencing and telecommuting, among other things.
What the government buys — cars, computers, office furniture and supplies, lighting, construction materials and the rest — obviously matters a lot, too. “One of the primary ways for the government’s greenhouse gas emissions to be reduced is for us to acquire goods and services….whose emissions are lower than in the past,” Leeds says.
GSA has now reported back to the White House and, Leeds tells me, has made a couple of key decisions.
“Reporting will be voluntary, not mandatory,” he said. It will be phased in over the next few years. (No surprise there.) Like Wal-Mart, Underwriters Laboratories and others, the government will need to develop reporting standards and deal with questions about verification. (See The Business of Rating Business.)
If all goes according to plan, companies or products with lower carbon footprints will be be favored as suppliers over those who pollute more, although Leeds hedged a bit when I asked him if this is the ultimate goal of the effort.
“We are on a journey at this point,” he replied. “I can’t say definitely. But it’s safe to say that if it can be done, and if we can meet the other requirements that we have laid out — bringing around small businesses, making sure the guidelines are understood — yes, this is a goal.”
Those of you who do business with Uncle Sam can learn a lot more from a 72-page GSA report (warning: much of it is almost unreadable) that was issued in April called “Executive Order 13514 Section 13: Recommendations for Vendor and Contractor Emissions.” This week, the White House Council of Environmental Quality, which is coordinating the effort, gave that report its endorsement, if I understand the process correctly.
Process is the key word here. There’s an enormous amount of it and properly so. The government has a lot of power, Leeds said, and must be careful to exercise it prudently. Small businesses, for instance, should be not be disadvantaged by the new rules, he said.
One way to get a sense of why this matters is to look at a couple of things the government has already has done. According to Caren Auchman, a GSA spokeswoman, the agency was given $5.5 billion in stimulus funds last year to green buildings. One result:
By Labor Day, under the Recovery Act, GSA will be building 31 solar energy projects across the nation that will generate a total of 12 megawatts of renewable solar power capacity – enough to power 1,600 homes, and equivalent to removing 2,500 cars from the road.
On a federal building in Lawrence, Ind., for example, GSA is not only installing solar panels, but adding a small array of four alternative photovoltaic systems, so they can be compared to one another, with help from the Department of Energy and the Sandia National Laboratories. GSA’s demand for panels, Caren told me, made it possible for Kyocera to open a new photovoltaic manufacturing plant in San Diego, Calif., and for Sharp Solar to double its workforce in Memphis.
Besides that, GSA spent $300 million in recovery act money on 17,246 fuel-efficient vehicles, including 8,739 hybrid vehicles and 40 advanced-technology buses, five of which are powered by compressed natural gas and five of which are hybrid-electric buses, the agency said.
So there’s no doubt that the government’s spending can have impact. The question is, how long will it take to get things going? Not months, certainly, but hopefully not too many years.
“Things take time,” Leeds admitted, “but everybody is absolutely committed….This is going to get done.”