Carbon Regulations Heating Up: CBAM, SEC, FAR
By Glassdome
As concerns about climate change continue to grow on a global scale, governments and regulatory bodies are taking substantial measures to address environmental issues.
In this blog post we’ll cover the 3 regulations receiving the most attention from Glassdome customers around the globe:
The European Union Carbon Border Adjustment Mechanism (CBAM)
The EU’s CBAM is an ambitious initiative aimed at addressing carbon leakage and guaranteeing European industries a level playing field on the global market. With the first emissions being calculated as of October 1, 2023, CBAM will require importers to pay a carbon border tariff equal to the carbon cost borne by European industries.
This regulation seeks to prevent the relocation of carbon-intensive production outside the EU to regions with lenient environmental regulations. Consequently, companies exporting products to the EU will face new compliance challenges and potential financial consequences. The first imported products to be impacted are: cement, fertilizer, iron & steel, aluminum, electricity, and hydrogen.
The SEC’s GHG Inventory Proposal
The SEC’s proposed rule seeks to improve and standardize climate-related disclosures for investors, including greenhouse gas emissions, climate risks, and transition strategies to a low-carbon economy. This initiative aims to increase transparency and enable investors to make informed decisions based on the climate-related risks and opportunities presented by companies.
Thousands of publicly traded companies will be impacted by the proposed rule, which will require them to provide comprehensive and consistent information regarding their climate-related performance and resilience.
Federal Acquisition Regulation (FAR) Case 2021-015
The FAR case concentrates on mandating that federal contractors disclose greenhouse gas emissions and climate-related financial risks associated with their supply chains. This regulation aims to promote sustainability throughout the federal government’s procurement process and encourage transparent climate reporting from suppliers.
To comply with the FAR and ensure eligibility for government contracts, businesses that receive federal contracts over $7.5m annually will be required to track and report Scope 1 and 2 emissions, while those who receive $50m+ annually will also have Scope 3 requirements.
Why a Sustainability Platform is Crucial
As the regulatory environment surrounding carbon emissions and climate disclosures becomes more stringent, some manufacturers are getting ahead of the curve. With their emissions data logged and managed in the Glassdome cloud, they’re reducing administrative burden with a focus on 3 outcomes:
Product Environmental Footprints
The Glassdome Lifecycle Assessment (LCA) platform enables manufacturers to precisely measure their carbon footprints, identifying emission hot spots and potential regulatory risks.
Organization-Wide GHG Emissions Inventory
With a comprehensive assessment platform, businesses can generate detailed reports on Scope 1, Scope 2, and even Scope 3 emissions by integrating data directly from suppliers.
Risk Mitigation and Strategy Development
By obtaining insight into climate-related risks, businesses can develop resilient strategies for transitioning to a low-carbon economy. For example, EV battery-makers are using the Glassdome platform to compare suppliers’ emissions intensities – giving sustainable manufacturers a leg up on the competition.
Stay ahead of the curve and demonstrate to customers, investors, and regulators your commitment to sustainability. Take the first step toward a compliant and sustainable future.
