Implementing the Standard on the Disclosure of Greenhouse Gas Emissions and the Setting of Reduction Targets

Learn about the implementation of the Standard on the Disclosure of Greenhouse Gas Emissions and the Setting of Reduction Targets in federal procurements.

Application of the Greenhouse Gas Emissions Disclosure Standard

The Greenhouse Gas Emissions (GHG) Disclosure Standard does not apply to contractual arrangements (agreements between governments), procurements covered by the Foreign Military Sales program, or those using emergency contracting authorities. It is not mandatory for procurements with an estimated value less than $25 million but is encouraged on a voluntary basis.

Procurements that were originally less than $25 million and were subsequently amended to a value over $25 million will not be subject to the GHG Disclosure Standard, unless otherwise noted in the procurement documentation.

The GHG Disclosure Standard applies only to individual procurements in excess of $25 million. If suppliers have multiple procurements that cumulatively add to more than $25 million, the GHG Disclosure Standard will not apply to the individual procurements, unless otherwise noted in the procurement documentation.

Invitation to tender (ITT) processes will be assessed on a case-by-case basis and will depend on the specific clauses used in the ITT.

It is important for businesses to read the solicitation and contract documents carefully to determine what is required for individual procurements.

Standing offers and supply arrangements

Standing offers and supply arrangements (SOSAs) are subject to the GHG Disclosure Standard if their total estimated value is over $25 million. Suppliers are informed of the GHG Disclosure Standard at the request for standing offer (RFSO) and request for supply arrangement (RFSA) stage, and as existing SOSAs are amended or renewed.

Joint venture bids

Joint venture bids will be evaluated on a case-by-case basis, depending on the nature of the procurement requirement and the specific terms and conditions used in the solicitation and resulting contract.

Subsidiaries

The supplier (bidder-subsidiary) may be requested to provide clarification to the contracting officer whether the emissions inventory and targets of the parent company include the emissions of the bidder.

If the answer is yes, then the parent company's participation in the Net-Zero Challenge (NZC) or an equivalent initiative or standard can be used as evidence. This would need to be confirmed in writing by the parent company.

If the answer is no, the case would require further examination. The parent company may need to revise its inventory and targets to include the subsidiary (bidder), or the bidder may need to join the NZC or an equivalent initiative or standard independently.

Sub-contractors

The GHG Disclosure Standard requirements for sub-contractors and suppliers will depend on the specific procurement and instructions provided by the contracting officer associated with the procurement.

Net-zero challenge and equivalent initiatives or standards

As the Government of Canada works towards achieving the objective of net-zero GHG emissions by 2050, suppliers with contracts over $25 million may be requested or required to join the NZC or an equivalent initiative or standard. Suppliers with contracts less than $25 million are encouraged to participate, but it is not mandatory.

As part of the NZC minimum requirements, suppliers are expected to:

• set a net-zero emissions target for 2050 or earlier
• establish at least two interim emissions reduction targets
• conduct a baseline GHG emissions inventory
• conduct scenario analysis
• identify mitigation strategies
• address corporate governance
• conduct and make public climate-related financial disclosures (based on the recommendations of the Task Force on Climate-related Financial Disclosures)

The NZC requires each participant to disclose all Scope 1 and 2 emissions. Scope 3 disclosure requirements vary according to business size and sector.

Suppliers participating in the NZC or equivalent must provide a participant letter as proof of participation. Participant letters are issued by Environment and Climate Change Canada after receiving the commitment letter from the supplier.

Unless otherwise noted in the procurement documentation, the same participant letter can be reused by the supplier for multiple solicitations as long as the supplier continues to participate in the NZC and adheres to the procurement requirements.

For general reporting guidance, information on requirements and how to join the NZC, visit the Net-Zero challenge webpage and consult the Net-Zero Challenge Technical Guide.

Submitting requests for equivalent initiatives or standards

If a business is already participating in an initiative or standard that is not included in the current list of equivalent initiatives, a business may submit a request to the procurement officer responsible for the solicitation. Proposals will be examined on a case-by-case basis and must meet certain criteria to be approved as functionally equivalent to the NZC.

Related links

• Public Services and Procurement Canada (PSPC) Policy Notification (PN) 157: Standard on the Disclosure of Greenhouse Gas Emissions and the Setting of Reduction Targets
• Treasury Board of Canada Secretariat (TBS) policy: Standard on the Disclosure of Greenhouse Gas Emissions and the Setting of Reduction Targets
• Mandatory criteria for green procurement
• Greening Government Strategy: A Government of Canada Directive