On December 8, 2021, President Biden signed Executive Order 14057, Catalyzing Clean Energy Industries and Jobs Through Federal Sustainability (“EO 14057”). In this article, I’ll summarize EO 14057 and identify what to watch for and what matters for business. EO 14057 clearly states that the federal government intends to use its purchasing power to achieve the overall goal of net-zero emissions by 2050. As individual agencies are required to create agency-level goals, targets, and acquisition strategies to meet the goals announced in EO 14057, industry has a tremendous opportunity to identify innovative and practical solutions that could drive requirements for individual procurements.
1. Summary of EO 14057
Section 102 of EO 14057 directs the federal government to use its “scale and procurement power” to achieve five “government-wide goals” along the path to net-zero emissions by 2050:
- 100 percent carbon pollution-free electricity (“CFE”) by 2030, at least half of which will be locally supplied clean energy to meet 24/7 demand on an hourly basis;
- 100 percent zero-emission vehicle acquisitions by 2035, including 100 percent zero-emission light-duty vehicle acquisitions by 2027;
- Net-zero emissions from federal procurement no later than 2050, including a Buy Clean policy to promote use of construction materials with lower embodied emissions;
- A net-zero emissions building portfolio by 2045, including a 50 percent emissions reduction by 2032; and
- Net-zero emissions from overall federal operations by 2050, including a 65 percent emissions reduction by 2030.
In addition to these five goals, EO 14057 directs the federal government to achieve “climate resilient infrastructure and operations” and “a climate- and sustainability-focused workforce.”
Beyond the five government-wide goals described above, EO 14057 leaves the details regarding how those goals will be achieved to future agency-level decisions. Sections 201 through 206 of EO 14057 direct each federal agency to propose targets, including annual progress targets, in support of the government-wide goals listed above.
2. What Matters for Business
- EO 14057 is the clearest statement to date that the federal government believes that its purchasing power is critical to achieving the overall goal of net-zero emissions by 2050. Individual agencies must now create agency-level goals, targets, and acquisition strategies to meet the government-wide goals in EO 14057.
- EO 14057’s focus on innovation and creating demand for new products and services begs the question of whether and how the federal government will relax traditional contracting rules for businesses that are not traditional contractors. The government has created more streamlined rules for “commercial item” acquisitions and the development of prototypes.
- While regulatory guidance from the FAR Council and agency-specific plans are developed, the White House continues to signal that government contractors may need to both have corporate-level climate targets and be required to provide project-specific emissions information in bids and proposals for government contracts.
- How can your business help federal agencies start thinking about the products and services that advance the government-wide goals of EO 14057, and how can those products and services best be purchased?
- How can your business leverage the capabilities and capacity of existing federal buildings and facilities to generate carbon pollution-free electricity (CFE)?
- Continue building an interdisciplinary team of internal and external advisors and managers, and continue developing a framework for climate information disclosure, including identifying and tracking progress against realistic, measurable impact reduction targets. Also, be ready to hit the ground running when the FAR Council proposes rules to implement EO 14030, Climate-Related Financial Risk.
There is A LOT to unpack in EO 14057 both in terms of requirements and opportunities. A link to the full content of the order follows:
Additionally, the following fact sheet has been published related to implementation of EO 14057:
Scout staff have prepared sustainability management plans similar to what is being required by this EO. We’ll be tracking this closely and provide any future updates as they become available. In the meantime, if you have any questions or need any support, please feel free to contact us at: email@example.com.