[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]
MISSING THE TARGET:
CEQ'S MERITLESS SELECTION OF SBTI
=======================================================================
JOINT HEARING
BEFORE THE
SUBCOMMITTEE ON INVESTIGATIONS
AND OVERSIGHT
SUBCOMMITTEE ON ENVIRONMENT
OF THE
COMMITTEE ON SCIENCE, SPACE,
AND TECHNOLOGY
OF THE
HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTEENTH CONGRESS
FIRST SESSION
__________
NOVEMBER 30, 2023
__________
Serial No. 118-28
__________
Printed for the use of the Committee on Science, Space, and Technology
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://science.house.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
53-969PDF WASHINGTON : 2025
-----------------------------------------------------------------------------------
COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY
HON. FRANK LUCAS, Oklahoma, Chairman
BILL POSEY, Florida ZOE LOFGREN, California, Ranking
RANDY WEBER, Texas Member
BRIAN BABIN, Texas SUZANNE BONAMICI, Oregon
JIM BAIRD, Indiana HALEY STEVENS, Michigan
DANIEL WEBSTER, Florida JAMAAL BOWMAN, New York
MIKE GARCIA, California DEBORAH ROSS, North Carolina
STEPHANIE BICE, Oklahoma ERIC SORENSEN, Illinois
JAY OBERNOLTE, California ANDREA SALINAS, Oregon
CHUCK FLEISCHMANN, Tennessee VALERIE FOUSHEE, North Carolina
DARRELL ISSA, California KEVIN MULLIN, California
RICK CRAWFORD, Arkansas JEFF JACKSON, North Carolina
CLAUDIA TENNEY, New York EMILIA SYKES, Ohio
RYAN ZINKE, Montana MAXWELL FROST, Florida
SCOTT FRANKLIN, Florida YADIRA CARAVEO, Colorado
DALE STRONG, Alabama SUMMER LEE, Pennsylvania
MAX MILLER, Ohio JENNIFER McCLELLAN, Virginia
RICH McCORMICK, Georgia TED LIEU, California
MIKE COLLINS, Georgia SEAN CASTEN, Illinois,
BRANDON WILLIAMS, New York Vice Ranking Member
TOM KEAN, New Jersey PAUL TONKO, New York
VACANCY
------
Subcommittee on Investigations and Oversight
HON. JAY OBERNOLTE, California, Chairman
BRIAN BABIN, Texas VALERIE FOUSHEE, North Carolina,
MAX MILLER, Ohio Ranking Member
RICH McCORMICK, Georgia KEVIN MULLIN, California
VACANCY JEFF JACKSON, North Carolina
------
Subcommittee on Environment
HON. MAX MILLER, Ohio, Chairman
BILL POSEY, Florida DEBORAH ROSS, North Carolina,
RICK CRAWFORD, Arkansas Ranking Member
RYAN ZINKE, Montana SUZANNE BONAMICI, Oregon
MIKE COLLINS, Georgia MAXWELL FROST, Florida
C O N T E N T S
November 30, 2023
Page
Hearing Charter.................................................. 2
Opening Statements
Statement by Representative Jay Obernolte, Chairman, Subcommittee
on Investigations and Oversight, Committee on Science, Space,
and Technology, U.S. House of Representatives.................. 6
Written Statement............................................ 7
Statement by Representative Valerie Foushee, Ranking Member,
Subcommittee on Investigations and Oversight, Committee on
Science, Space, and Technology, U.S. House of Representatives.. 8
Written Statement............................................ 9
Statement by Representative Max Miller, Chairman, Subcommittee on
Environment, Committee on Science, Space, and Technology, U.S.
House of Representatives....................................... 10
Written Statement............................................ 11
Statement by Representative Deborah Ross, Ranking Member,
Subcommittee on Environment, Committee on Science, Space, and
Technology, U.S. House of Representatives...................... 12
Written Statement............................................ 13
Written statement by Representative Zoe Lofgren, Ranking Member,
Committee on Science, Space, and Technology, U.S. House of
Representatives................................................ 14
Witnesses:
Mr. Andrew Mayock, Federal Chief Sustainability Officer, Council
on Environmental Quality (Executive Office of the President)
Oral Statement............................................... 15
Written Statement............................................ 17
Discussion....................................................... 22
Appendix I: Answers to Post-Hearing Questions
Mr. Andrew Mayock, Federal Chief Sustainability Officer, Council
on Environmental Quality (Executive Office of the President)... 46
Appendix II: Additional Material for the Record
Letters submitted by Representative Jay Obernolte, Chairman,
Subcommittee on Investigations and Oversight, Committee on
Science, Space, and Technology, U.S. House of Representatives
Eric Fanning, President & CEO, Aerospace Industries
Association................................................ 78
Caitlin Sutherland, Executive Director, Americans for Public
Trust...................................................... 80
Documents submitted by Representative Claudia Tenney,
Subcommittee on Investigations and Oversight, Committee on
Science, Space, and Technology, U.S. House of Representatives
Science Based Targets Initiative LTD, Certificate of
Incorporation of a Private Limited Company, the Registrar
of Companies for England and Wales......................... 82
``Grants and Program Associate,'' We Mean Business........... 127
``Who We Are--The New Venture Fund works with change leaders
who share our purpose of creating positive impact in our
communities, our country, and our world,''
www.newventurefund.org..................................... 129
MISSING THE TARGET:
CEQ'S MERITLESS SELECTION OF SBTI
----------
THURSDAY, NOVEMBER 30, 2023
House of Representatives, Subcommittee on
Investigations and Oversight, joint with the
Subcommittee on Environment, Committee on
Science, Space, and Technology,
Washington, D.C.
The Subcommittees met, pursuant to notice, at 2:01 p.m., in
room 2318 of the Rayburn House Office Building, Hon. Jay
Obernolte [Chairman of the Subcommittee on Investigations and
Oversight] presiding.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Obernolte. The hour of 2 o'clock having arrived,
the joint hearing will come to order. Without objection, the
Chair is authorized to declare recess at any time.
Welcome to today's hearing entitled ``Missing the Target:
CEQ's Meritless Selection of SBTi.'' I recognize myself for
five minutes for an opening statement.
Today's hearing will focus on a proposed regulation by the
Federal Acquisition Regulatory (FAR) Council and the Council on
Environmental Quality (CEQ) that would require Federal
contractors to disclose greenhouse gas emissions and set
reduction targets. The rule would require that a London-based
company validate those targets. That U.K. company, an entity
named Science Based Target initiative, or SBTi, would act as a
quasi-regulator by performing a fundamentally governmental task
of setting emission reduction targets and then validating those
same targets.
This Committee held a hearing in September where we heard
from various stakeholders about the impact that this proposed
rule would have on industry and about their concerns with the
selection of SBTi to perform a quasi-regulatory role. However,
today's hearing is not about the propriety of the proposed
regulation. Instead, this hearing will examine the process that
has been proposed to enact the regulation and on the selection
of SBTi to perform this role.
I think that we all would agree that one of the primary
responsibilities of Congress in conducting oversight is to
ensure that government functions in a way that is fair to
everybody. Doing so requires that the government remove even
the appearance of conflicts of interest from decisionmaking and
conduct itself as transparently as possible.
I'd like to emphasize that this hearing is not about
climate change or whether companies should or should not reduce
their greenhouse gas emissions. Today's hearing is about
government overreach and a questionable process that could
result in the government picking winners and losers in the
marketplace.
I'd like to highlight some of my concerns with this
process. The FAR Council, which is comprised of NASA (National
Aeronautics and Space Administration), the GSA (General
Services Administration), and the DOD (Department of Defense),
published a proposed rule last November, which decreed that all
major Federal contractors would be required to set greenhouse
gas emissions reduction targets, and then be obligated to hire
a specific private foreign company to validate those targets.
The company chosen by the Administration to perform this task
was SBTi.
This Committee has had difficulty in establishing the basis
for the selection of SBTi to fill this critical role. We do
know that NASA, a member of the FAR Council, confirmed that
they had no communication with SBTi, either before or after the
drafting of the proposed rule. According to documents provided
by OMB (Office of Management and Budget), representatives from
OMB met to discuss this proposed regulation only twice. There
was no other email traffic, no formal vetting or application,
no competitive process, and it appears SBTi did not even have
to submit a single piece of paper explaining why they were
best-suited for this job. We don't know what vetting was
performed by the CEQ because they refused to provide this
Committee with the answers to our questions or any of the
documents that we've requested.
It's important for the American people to understand the
process used to select SBTi and to craft this regulation
because there appears to be serious conflicts of interest
between the Administration and SBTi. SBTi is a London-based
company that lists the We Mean Business Coalition as one of its
primary owners. That coalition was launched by the New Venture
Fund, which is owned and operated by Arabella Advisors.
According to multiple news articles, Arabella is one of the top
donors to numerous political candidates and causes. We also
know that at least one senior White House official previously
partnered with the Arabella Advisors to launch an organization
that advocated for some of the same policy that now appears in
this proposed regulation.
Now, let me be clear here, there is nothing wrong with
advocating for a policy goal and then going to work in the
Administration to implement that goal. It happens in every
Administration. However, there is a big difference between
implementing a policy that you've advocated for and using the
government to steer money, power, and influence to your former
employer. That is not OK. If this is in fact what has happened
here, then everybody on this Committee, regardless of political
party, should agree that this is wrong, and that's regardless
of who might be in the White House. As Members of Congress, we
have an obligation to safeguard the power of the legislative
branch as the ultimate grantor of regulatory authority and to
reject attempts to usurp that authority by the executive
branch, regardless of whether or not we otherwise support the
current Administration.
The American people deserve answers on this issue. They
need to know how and why this proposed regulation came to be
and why SBTi was selected in what appears to be a
noncompetitive, single-source process. I hope that today's
hearing will provide those answers.
Today's witness is Mr. Andrew Mayock, Chief Sustainability
Officer for the Council on Environmental Quality, which was
intimately involved in the drafting of this proposed rule. Mr.
Mayock, thank you for your willingness to be here. I hope that
your testimony today will provide answers to the Committee's
concerns and also offers some much-needed transparency on this
issue.
[The prepared statement of Chairman Obernolte follows:]
Good morning. Today's hearing will focus on a proposed
regulation by the Federal Acquisition Regulatory (FAR) Council
and the Council on Environmental Quality (CEQ) that would
require federal contractors to disclose greenhouse gas (GHG)
emissions and set reduction targets. The rule would require
that a London-based company validate those targets.
That UK-based company, an entity named Science Based Target
initiative or SBTi, would act as a quasi-regulator by
performing a fundamental government task of setting emission
reduction targets and then validating those same targets. This
Committee held a hearing in September where we heard from
various stakeholders about the impact the proposed rule would
have on industry and about their concerns with the selection of
a SBTi to perform a quasi-regulatory role.
However, today's hearing is not about the propriety of the
proposed regulation. Instead, this hearing will examine the
process that has been proposed to enact the regulation, and on
the selection of SBTi to perform this role. I think we would
all agree that one of the primary responsibilities of Congress
in conducting oversight is to ensure that government functions
in a way that is fair for all. Doing so requires that the
government remove the appearance of conflicts of interest from
decision-making and conduct itself as transparently as
possible.
I want to emphasize that this hearing is not about climate
change or whether companies should or should not reduce their
greenhouse gas emissions. Today's hearing is about government
overreach and a questionable process that could result in the
federal government picking winners and losers in the
marketplace. I'd like to highlight some of my concerns with
this process.
The FAR Council, which is comprised of NASA, GSA, and the
DOD, published a proposed rule last November which decreed that
all major federal contractors would be required to set
greenhouse gas emission reduction targets, and then be
obligated to hire a specific private foreign company to
validate those targets. The company chosen by the
Administration to perform this task was SBTi.
We've had difficulty establishing the basis for the
selection of SBTi to fill this critical role. We do know that
NASA, a member of the FAR Council, confirmed that they had no
communication with SBTi before or after the drafting of the
proposed rule.
According to documents provided by OMB, representatives
from OMB met to discuss this proposed regulation ONLY TWICE.
There was no other email traffic, no formal vetting or
application, no competitive process, and it appears SBTi did
not even have to submit a single piece of paper explaining why
they were the best suited for the job.
We don't know what vetting was performed by the CEQ because
they've refused to provide the Committee with answers to our
questions or any documents requested.
It's important for the American people to understand the
process used to select SBTi and to craft this regulation
because there appears to be serious conflicts of interest
between the Administration and SBTi.
SBTi is a London-based company that lists the We Mean
Business coalition as one of its primary owners. The We Mean
Business coalition was launched by the New Venture Fund which
is owned and operated by the Arabella Advisors. According to
multiple news articles, Arabella Advisors are one of the top
donors to numerous political candidates and causes.
We also know that at least one senior White House official
previously partnered with the Arabella Advisors to launch an
organization that advocated for some of the same policy that
now appears in this proposed regulation.
Let's be clear here. There's nothing wrong with advocating
for a policy goal and then going to work in the Administration
to implement that goal. It happens in every administration.
However, there's a big difference between implementing a
policy you advocated for, and using the government to steer
money, power, and influence to your former employer.
If this is in fact what happened here then everyone,
regardless of political party, should agree this is wrong
regardless of who is in the White House. As Members of
Congress, we have an obligation to safeguard the power of the
Legislative Branch as the ultimate grantor of regulatory
authority, and to reject attempts to usurp that authority by
the Executive Branch, regardless of whether or not we otherwise
support the current Administration.
The American people deserve answers on this issue. They
need to know how and why this proposed regulation came to be,
and why SBTi was selected in a non-competitive single-source
process. We hope today's hearing will provide those answers.
Today's witness is Mr. Andrew Mayock, Chief Sustainability
Officer for the Council on Environmental Quality, which was
intimately involved in the drafting of this proposed rule.
Mr. Mayock, thank you for your willingness to be here. We
hope your testimony today will provide answers to the
Committee's concerns and also offer some much-needed
transparency on this issue.
Chairman Obernolte. I now recognize the Ranking Member of
the Investigations and Oversight Subcommittee, the gentlewoman
from North Carolina, Mrs. Foushee, for her opening statement.
Mrs. Foushee. Good afternoon, Chairman Obernolte, and good
afternoon, Mr. Mayock. Thank you for joining us today.
As I said two months ago at a hearing on the same topic,
wise allocation of taxpayer money relies on fully informed
science-based decisionmaking. Few problems put Federal
investments at greater risk than climate change. I won't repeat
myself too much at this second hearing today. My beliefs are
unchanged. We have a responsibility to ensure that taxpayer
money is well-stewarded by the contractors receiving hundreds
of billions of dollars every year. Finalizing this rule will
lead to an unprecedented level of transparency into climate
vulnerabilities, and contracting agencies can use that
information as they think best.
I am glad the Biden Administration took this important
step, and I look forward to seeing how the FAR Council improves
the rule as it moves forward toward finalization. For instance,
after hearing the expert testimony at the September 20 hearing,
I came away with the opinion that the inclusion of SBTi is less
important than the broader push to require greater transparency
into the emissions of the government's largest contractors
competing for the largest contracts. I hope that the FAR
Council takes this and other comments into consideration as
they move forward toward finalization.
However, I am puzzled by the presence of Mr. Mayock here
today. Mr. Mayock is an extremely distinguished witness as a
leader in the Administration's effort to respond and adapt to
the impacts of climate change. It is a privilege to have him
here before us. Mr. Mayock does so much important work that
Members of this Committee are deeply invested in, ensuring that
the best-available science on our changing climate drives
decisions spanning the breadth of the Federal Government.
But Mr. Mayock is not the appropriate witness to address
the topic of this hearing. Contrary to the hearing's title, CEQ
did not write this rule. This rule is being promulgated by the
FAR Council, and questions about the drafting and finalization
of the rule are best directed elsewhere, not to CEQ.
I am familiar with the memo CEQ wrote that was the genesis
of the FAR Council's proposed rule. It is simply not the case
that Mr. Mayock or his CEQ colleagues selected SBTi for
inclusion in the rule. Issuing a memo is not the same thing as
awarding a contract. Suggesting that a different office
consider an entity's role in a proposed rulemaking is not the
same thing as making a selection.
Mr. Mayock cannot speak on behalf of the FAR Council on
this rule. I am sure he will have a lot of interesting things
to say, given his leadership on the Administration's
sustainability policies, and hopefully, he will have ample
opportunity to discuss the great work CEQ is doing to promote
climate adaptation and resilience. But once again, CEQ did not
write this rule. The FAR Council did and is now working to
finalize it. CEQ did not select SBTi. The FAR Council chose to
include it, and it remains to be seen how they take into
consideration public comments criticizing that inclusion.
Despite these facts, I am glad to join Chairman Obernolte
in welcoming you here today, Mr. Mayock. I hope to hear about
CEQ--about how CEQ is working to promote a more sustainable,
adaptable, and responsible Federal Government.
And I yield back.
[The prepared statement of Mrs. Foushee follows:]
Good afternoon, Chairman Obernolte. And good afternoon, Mr.
Mayock--thank you for joining us today.
As I said two months ago at a hearing on this same topic,
wise allocation of taxpayer money relies on fully informed,
science-based decision making. Few problems put federal
investments at greater risk than climate change. I won't repeat
myself too much at this second hearing today. My beliefs are
unchanged--we have a responsibility to ensure that taxpayer
money is well stewarded by the contractors receiving hundreds
of billions of dollars every year.
Finalizing this rule will lead to an unprecedented level of
transparency into climate vulnerabilities, and contracting
agencies can use that information as they think best. I am glad
the Biden administration took this important step, and I look
forward to seeing how the FAR Council improves the rule as it
moves towards finalization.
For instance, after hearing the expert testimony at the
September 20th hearing, I came away with the opinion that the
inclusion of SBTi is less important than the broader push to
require greater transparency into the emissions of the
government's largest contractors competing for the largest
contracts. I hope the FAR Council takes this and other comments
into consideration as they move toward finalization.
However, I am puzzled by the presence of Mr. Mayock here
today. Mr. Mayock is an extremely distinguished witness, as a
leader in the Administration's effort to respond and adapt to
the impacts of climate change. It's a privilege to have him
here before us. Mr. Mayock does so much important work that
Members of this Committee are deeply invested in--ensuring that
the best available science on our changing climate drives
decisions spanning the breadth of the Federal government.
But Mr. Mayock is not the appropriate witness to address
the topic of this hearing. Contrary to the hearing's title, CEQ
did not write this rule. This rule is being promulgated by the
FAR Council, and questions about the drafting and finalization
of the rule are best directed elsewhere, not to CEQ.
I am familiar with the memo CEQ wrote that was the genesis
of the FAR Council's proposed rule. It is simply not the case
that Mr. Mayock or his CEQ colleagues ``selected'' SBTi for
inclusion in the rule. Issuing a memo is not the same thing as
awarding a contract. Suggesting that a different office
consider an entity's role in a proposed rulemaking is not the
same thing as making a selection.
Mr. Mayock cannot speak on behalf of the FAR Council on
this rule. I am sure he will have a lot of interesting things
to say, given his leadership on the Administration's
sustainability policies, and hopefully he will have ample
opportunity to discuss the great work CEQ is doing to promote
climate adaptation and resilience.
But once again, CEQ did not write this rule--the FAR
Council did and is now working to finalize it. CEQ did not
``select'' SBTi, the FAR Council chose to include it, and it
remains to be seen how they take into consideration public
comments criticizing that inclusion.
Despite these facts, I am glad to join Chairman Obernolte
in welcoming you here today, Mr. Mayock. I hope to hear about
how CEQ is working to promote a more sustainable, adaptable,
and responsible federal government. I yield back.
Chairman Obernolte. Thank you, Mrs. Foushee.
I now recognize the Chairman of the Environment
Subcommittee, the gentleman from Ohio, Mr. Miller, for his
opening statement.
Mr. Miller. Thank you, Mr. Chairman. I'm glad to be up here
with you in that today is a joint Subcommittee hearing because
I share many of the same concerns that you raised earlier.
First and foremost, this proposed rule would allow SBTi to
function unchecked and without any accountability. In doing so,
the most at risk for negative impacts from this rule is our
military and combat readiness. That is absolutely unacceptable
and downright irresponsible. By outsourcing quasi-regulatory
powers to SBTi, the Administration has placed them out of reach
of traditional accountability and transparency laws, as well as
potentially denied U.S. businesses essential to military
operations the right to appeal decisions made by this private
sector entity.
Unlike government agencies, SBTi is not subject to the
Freedom of Information Act (FOIA), making it impossible for the
American people to have any insight how critical decisions and
requirements are determined. Congress established FOIA
precisely to create transparency in the operation of regulatory
agencies, which are funded by the taxpayer, and this proposed
regulation seeks to circumvent that.
Because SBTi is a private company, they also do not have to
go through the same public process to change their
methodologies or notify change in their scientific analysis
that an agency would. Agencies must justify each action and
cannot in the interest of a specific individual or groups, and
you know that, whereas SBTi can change their methodologies
overnight to benefit a donor if they choose to, and there's
nothing anyone can do to stop it in the moment.
Think of the consequences here. A contractor supplying
components of our domestic air defense system could be shut
down overnight because SBTi changed how they calculate
emissions offsets at the factory and contractor doesn't meet
the new bar of approval. The contractor hasn't changed anything
they do, but SBTi just decided to tweak how they analyze it.
This is entirely hypothetical at this point, but it's mind-
boggling that we could be even envisioning a scenario and want
to proceed with this rule. It's ridiculous. Transparency
procedures were put in place for agencies to safeguard the
integrity of the process and remove even the appearance of
impropriety.
As Chairman of the Environment Subcommittee, I know very
well that there is almost nothing the EPA (Environmental
Protection Agency) can change about their scientific processes
without notifying Congress and the public. This accountability
to the taxpayer is precisely why regulatory authority is not
vested in private companies. Further, because SBTi is a
foreign-based company, it's unclear what, if any, judicial
avenues are available for U.S. companies that don't feel they
are getting a fair shake.
It's always been a fundamental principle in this country
that courts can intervene when a government agency is
conducting itself in a manner that is arbitrary or
overreaching. Again, look at the EPA and the many court cases
they've been involved in. But if SBTi arbitrarily denies a
company validation, it's unlikely in that a U.S. court would
even be able to hear the case, much less provide any sort of
relief.
This is not hyperbole. These are lives of Americans at home
and abroad that could be jeopardized because of the political
gamesmanship this rule is pushing. I refuse to let that be the
case and this rule move forward without any far more details on
the proposed structure and execution. This is nonsense and you
know it.
There are many issues at play with this proposed rule, but
today, we are focusing on one fundamental question, why exactly
was SBTi selected as the sole arbiter and validator when its
decisions are tied to crucial national defense implications? As
someone who served in the Marine Corps, I don't want you to
have that power.
I hope today's hearing will provide some clarity on that.
Thank you, and I yield back.
[The prepared statement of Mr. Miller follows:]
Thank you, Mr. Chairman.
I'm glad to be up here with you and that today is a joint
subcommittee hearing because I share many of the same concerns
you raised.
First and foremost, this proposed rule would allow SBTi to
function unchecked and without any accountability. In doing so,
the most at risk for negative impacts from this rule is our
military and combat readiness. That is absolutely unacceptable
and downright irresponsible.
By outsourcing quasi-regulatory powers to SBTi, the
Administration has placed them out of reach of traditional
accountability and transparency laws, as well as potentially
denied U.S. business essential to military operations the right
to appeal decisions made by this private-sector entity.
Unlike government agencies, SBTi is not subject to the
Freedom of Information Act (FOIA), making it impossible for the
American people to have any insight how critical decisions and
requirements are determined. Congress established FOIA
precisely to create transparency in the operation of regulatory
agencies, which are funded by the taxpayer, and this proposed
regulation seeks to circumvent that.
Because SBTi is a private company, they also do not have to
go through the same public process to change their
methodologies or notify a change in their scientific analysis
that an agency would. Agencies must justify each action and
cannot act in the interests of a specific individual or groups.
Whereas SBTi can change their methodologies overnight to
benefit a donor if they choose to and there's nothing anyone
can do to stop it in the moment.
Think of the consequences here: a contractor supplying
components of our domestic air defense system could be shut
down overnight because SBTi changed how they calculate
emissions offsets at the factory and the contractor doesn't
meet the new bar of approval. That contractor hasn't changed
anything they do, SBTi just decided to tweak how they analyze
it. This is entirely hypothetical at this point, but it's
mindboggling we can even envision this scenario and want to
proceed with this rule.
Transparency procedures were put in place for agencies to
safeguard the integrity of the process and remove even the
appearance of impropriety. As Chairman of the Environment
Subcommittee, I know very well that there is almost nothing the
EPA can change about their scientific processes without
notifying Congress and the public. This accountability to the
taxpayer is precisely why regulatory authority is not vested in
private companies.
Further, because SBTi is a foreign-based company, it's
unclear what if any judicial avenues are available for U.S.
companies that don't feel they are getting a fair shake. It's
always been a fundamental principle in this country that courts
can intervene when a government agency is conducting itself in
a manner that is arbitrary or overreaching. Again, look at the
EPA and the many court cases they have been involved in.
But if SBTi arbitrarily denies a company validation, it's
unlikely that a U.S. court would even be able to hear the case,
much less provide any sort of relief.
This is not hyperbole: the lives of Americans at home and
abroad could be jeopardized because of the political
gamesmanship this rule is pushing. I refuse to let that be the
case and let this rule move forward without far more details on
the proposed structure and execution.
There are many issues at play with this proposed rule, but
today we are focusing on one fundamental question: why exactly
was SBTi selected as the sole arbiter and validator when its
decisions are tied to crucial national defense implications? I
hope today's hearing will provide some clarity on that. Thank
you and I yield back.
Chairman Obernolte. Thank you, Mr. Miller.
I now recognize the Ranking Member of the Environment
Subcommittee, the gentlewoman from North Carolina, Ms. Ross,
for her opening statement.
Ms. Ross. Thank you, Chairman Obernolte, Chairman Miller,
Ranking Member Foushee. And good afternoon to you, Mr. Mayock.
Thank you very much for appearing here today, and thank you for
the work that you do for the people of the United States of
America.
Under the Biden Administration, the Council on
Environmental Quality has been a leading force on instituting
robust environmental protections and a comprehensive whole-of-
government response to climate change. CEQ oversees a broad
portfolio, which includes improving the Federal environmental
review process, assisting agencies in accounting for greenhouse
gas emissions, bolstering agency resilience to climate impacts,
and elevating environmental justice as a priority throughout
the Federal Government. I applaud CEQ for its efforts over the
last three years to support and promote a healthy environment
for all our communities, including my home State of North
Carolina.
Our witness today, Mr. Andrew Mayock, is the leader at CEQ
working toward the implementation of this important agenda. In
his role as Federal Chief Sustainability Officer, he is charged
with enhancing the sustainability of the Federal Government by
assisting agencies in anticipating and adapting to the effects
of climate change on their programs and operations. In pursuit
of this goal, he's coordinated agency strategies to assess
climate vulnerabilities and integrate risk mitigation into
infrastructure and supply chain planning, important work.
His appearance today should provide us with an excellent
opportunity to engage in a serious discussion on these critical
issues, a discussion worthy of the Science Committee. And yet,
that's not the hearing we're having today. Instead, we've asked
a senior CEQ official to testify about a proposed rule that CEQ
is not even leading. Additionally, the Committee held a hearing
which we've heard about on this same proposed rule less than
two months ago, and there are no facts that have changed since
then.
I am confused about why CEQ is being quizzed about a rule
that it didn't propose and is not in charge of finalizing. This
is the wrong venue for that inquiry with this witness. And I
fear that today's hearing will be a missed opportunity.
As the Ranking Member of the Environment Subcommittee, I
want to discuss environmental science and environmental policy.
A senior administration official such as Mr. Mayock can answer
questions related to the vital work that his team is doing to
improve Federal sustainability and climate resilience. Those
questions would provide far greater benefit to the Committee
than an argument about a rulemaking process that his office is
not promulgating.
I intend to engage Mr. Mayock in the kind of valuable
discussion that's worth our time, and I encourage my colleagues
to do the same.
Thank you, Mr. Chairman, and I yield back.
[The prepared statement of Ms. Ross follows:]
Good afternoon, Chairman Obernolte, Chairman Miller, and
Ranking Member Foushee, and good afternoon to you Mr. Mayock.
Thank you very much for appearing before the Committee today.
Under the Biden administration, the Council on
Environmental Quality has been a leading force on instituting
robust environmental protections and a comprehensive, whole-of-
government response to climate change. CEQ oversees a broad
portfolio which includes improving the federal environmental
review process, assisting agencies in accounting for greenhouse
gas emissions, bolstering agency resilience to climate impacts,
and elevating environmental justice as a priority throughout
the federal government. I applaud CEQ for its efforts over the
last three years to support and promote a healthy environment
for all our communities, including mine in North Carolina.
Our witness today, Mr. Andrew Mayock, is a leader at CEQ
working towards the implementation of this agenda. In his role
as Federal Chief Sustainability Officer, he is charged with
enhancing the sustainability of the federal government by
assisting agencies in anticipating and adapting to the effects
of climate change on their programs and operations. In pursuit
of this goal, he has coordinated agency strategies to assess
climate vulnerabilities and integrate risk mitigation into
infrastructure and supply chain planning. His appearance today
should provide us with an excellent opportunity to engage in a
serious discussion of these critical issues, a discussion
worthy of the Science Committee.
And yet, that is not the hearing that we are having today.
Instead, we have asked a senior CEQ official to testify about a
proposed rule that CEQ is not even leading. Additionally, the
committee held a hearing on the same proposed rule less than
two months ago, and nothing has changed since then. I am
confused about why CEQ is being quizzed about a rule that it
did not propose and is not in charge of finalizing.
I fear that today's hearing will be a missed opportunity.
As the Ranking Member of the Environment Subcommittee, I want
to discuss environmental science and environmental policy. A
senior administration official, such as Mr. Mayock, can answer
questions related to the vital work that his team is doing to
improve federal sustainability and climate resilience. Those
questions would provide far greater benefit to the committee
than an argument about a rulemaking process that his office is
not promulgating. I intend to engage Mr. Mayock in the kind of
valuable discussion that is worth our time. I urge my
colleagues to do the same.
I yield back.
Chairman Obernolte. Thank you, Ms. Ross.
[The prepared statement of Ms. Lofgren follows:]
Today's hearing is the second oversight hearing in two
months to focus on a proposed rule that would bring much-needed
transparency to the greenhouse gas emissions of the federal
contracting sector. What I said two months ago remains true
today: more data is a good thing, greater transparency is a
good thing, and the federal government will make more informed
procurement decisions if the goals of this rulemaking are
realized.
One thing that certainly has not changed in the last two
months is the dire nature of the climate crisis. It confronts
us with ever-increasing urgency as coastal waters rise, extreme
weather events occur more frequently, and every facet of our
society struggles to adapt. It is absolutely right, and indeed
imperative, that the federal government use every policy tool
at its disposal to meet the challenge of climate change. The
Biden Administration is providing unprecedented climate
leadership with a whole-of-government approach, and this
rulemaking is one important piece of that broader effort.
I noted previously that procurement policy is an important
lever for the federal government to use in reducing its own
greenhouse gas emissions while prodding the private sector to
do the same. The U.S. government possesses enormous influence
as the world's largest purchaser of goods and services, with a
staggering $630 billion spent in 2021 alone. Federal
procurement decisions carry tremendous weight due to the size
and diversity of the federal contracting sector. But until now,
the federal government has neglected to use this leverage to
better understand the emissions of its contractors and the
potential emission reduction opportunities that may exist
throughout federal procurement supply chains. In ignoring
contractors' climate risk, the federal government has failed to
properly protect its investments and has exposed American
taxpayers to the higher costs and long-term hazards posed by a
vulnerable federal supply chain. The proposed rule takes an
important and long overdue first step to rectify this mistake.
The goals of this proposed rule are grounded in common
sense. It takes a basic step towards providing the federal
government with the data it needs to make smart, climate-
conscious procurement decisions. This is a worthy goal, and one
that the federal government has every right to pursue as part
of its obligation to be a responsible steward of taxpayer
dollars.
I must admit that I find the timing and focus of today's
hearing to be strange. We are rehashing the same conversation
that we had in September. Just like at the last hearing two
months ago, the rule remains in the proposal stage while the
Federal Acquisition Regulatory Council considers public
comments. Indeed, it is the FAR Council that is promulgating
this rulemaking and leading the process. Yet our sole witness
today is an official from the Council on Environmental Quality,
which is not directly involved in the rulemaking process and
presumably cannot speak to many aspects of the rulemaking that
would be most pertinent to the committee's oversight. This will
necessarily limit the hearing's ability to inform the
committee's deliberations regarding this rulemaking.
Despite these limitations, I hope the discussion at today's
hearing will be constructive. The proposed rule is an important
attempt to bring greater transparency to the climate impact of
the federal procurement sector. I fully support that objective,
even as the final details remain to be worked out. Proposed
rules can always be improved before they are finalized, but the
goal of this rule is sensible and consistent with the direction
the private sector is already heading. I hope today's hearing
stays grounded in this rule's important goals, rather than
becoming distracted by cherry-picked concerns and
unsubstantiated speculation.
Thank you to the witness for appearing before the committee
today. I yield back.
Chairman Obernolte. Our witness today is Mr. Andrew Mayock,
Chief Sustainability Officer of the Council on Environmental
Quality. Mr. Mayock, you are recognized for five minutes for
your testimony.
TESTIMONY OF MR. ANDREW MAYOCK,
FEDERAL CHIEF SUSTAINABILITY OFFICER,
COUNCIL ON ENVIRONMENTAL QUALITY
(EXECUTIVE OFFICE OF THE PRESIDENT)
Mr. Mayock. Press the light? Does it work that way? You got
it. Thank you.
Thank you, Chairman Obernolte. Thank you, Chairman Miller.
Thank you, Ranking Member Foushee, and thank you, Ranking
Member Ross, for the welcome and the opening words. My name is
Andrew Mayock, and I serve as the Federal Chief Sustainability
Officer of the U.S. Government. It is an honor to be here
today.
The Office of the Federal Chief Sustainability Officer was
created in 1993 and is located within CEQ and leads
sustainability across all Federal agencies. We work to ensure
the U.S. Government is leading by example when it comes to
sustainability.
As President Biden has noted on multiple occasion, this
Administration has a responsibility to act with urgency and
resolve when our Nation faces a clear and present danger, and
climate change is literally, not figuratively, a clear and
present danger, as the President has reminded us on many
occasions. In fact, in 2023 to date, there have been 25
confirmed weather climate disaster events with losses exceeding
$1 billion each for the United States. From 1980 to 2022, the
annual average of these events is 8.1. Over the past years,
that average has jumped to 18 events per year.
So we now live in a time of records, record drought, record
heat, record floods, and more. At the start of this
Administration, the President set out a comprehensive plan to
address these risks, including directing the Federal Government
to transform how we build, buy, and manage to help make our
government and our economy cleaner, more efficient, and more
sustainable.
Reducing the risk of climate change related to government
procurement and supply chains is a key element of this
strategy. On December 9, 2021, President Biden signed Executive
Order (EO) 14057, and the Federal Sustainability Plan outlined
an ambitious path to achieve 100 percent carbon-free
electricity for Federal operations no later than 2030, 100
percent zero emission vehicles for the Federal fleet no later
than 2035, and net zero Federal facilities by 2045.
The President's plan also required Federal agencies to
assess climate vulnerabilities, including to their supply
chains, prepare action plans, and report annually on risk and
progress. These steps will improve Federal supply chains'
resilience to increasing climate risks, strengthen the
competitive position of American companies, and help to reduce
contracts, cost through increased efficiency.
On November 14, 2022, the agency members of the Federal
Acquisition Regulation Council, the FAR Council, proposed the
disclosure of greenhouse gas emissions and climate-related
financial risks proposed rule. As the world's largest single
buyer of goods and services purchasing over $630 billion worth
of goods and services in fiscal 2020 year, fiscal 2022 alone,
the Federal Government faces significant financial risks from
climate change as noted.
The proposed rule is part of the President's vision of
implementing the first comprehensive governmentwide strategy to
measure, disclose, and manage and mitigate the systemic risks
that climate change poses to American families, businesses, and
the economy. Under the proposed rule, the largest suppliers
receiving $50 million or more in annual sales will be required
to publicly disclose climate-related financial risks,
emissions, and set science-based targets. Federal contractors
with more than $7.5 million in annual contracts would be
required to report scope 1 and scope 2 emissions. All Federal
contractors with less than $7.5 million in annual contracts
would be exempt.
The proposed rule, if finalized, would leverage widely
adopted third-party standards and systems that many Federal
contractors already use when disclosing their emissions and
setting emission reduction targets. As of 2022, more than half
of Federal contractors were already disclosing climate-related
information, and 18,700 companies globally volunteered
disclosed emissions and climate risk through CDP.
Large numbers of U.S. companies already used CDP, TCFD
(Task Force on Climate-related Financial Disclosures), and SBTi
standards because their entities and other entities such as
nonFederal customers and investors demand them. Examples of
those companies include Pfizer, Ford, AT&T, Johnson & Johnson,
and Honeywell, among others. The proposed rule would reinforce
these trends toward industrywide standardization by aligning
these requirements of Federal procurement policy with those of
capital markets, investors, and other key stakeholders.
When the FAR Council agencies published the proposed rule,
they specifically invited public comment on the use of these
specified third-party standards, including potential
alternatives for the FAR Council to consider in developing the
final rule. The comment period for the proposed rule closed on
February 15--February 13, 2023, and the FAR Council agencies
are reviewing and analyzing the comments they received based on
public feedback.
Overall, we appreciate the conversation today, and we look
forward to engaging collaboratively with the Committee as the
Biden-Harris Administration continues to work to meet the
challenge of the climate crisis, grow good jobs and industries,
and make America more competitive--more economically
competitive and secure.
Thank you again for the opportunity to be here today.
[The prepared statement of Mr. Mayock follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Obernolte. Thank you very much, Mr. Mayock.
We'll now move to questions from Members of the Committee.
I'd first like to ask unanimous consent that two letters be
entered for the record, one from the AIA (Aerospace Industries
Association) and one for the Americans for Public Trust.
Without objection, so ordered.
I now recognize myself for five minutes for my opening--for
my questions.
Mr. Mayock, in March we sent you a letter, the CEQ a letter
requesting the rationale for the selection of SBTi and the
production of some documents, and I'm very disappointed that we
haven't had a response from the CEQ on that letter. Can you
tell us why the CEQ has not responded?
Mr. Mayock. I know that my CEQ colleagues have been working
diligently to be responsive to that letter and to gather
documents responsive to that letter. I know that part of the
process which ends up taking time includes interagency review
for agencies that have equities in documents to produce. I have
that own disappointment with delay and the interagency process,
Mr. Chairman. And I'm pleased to report today that it's my
understanding that that these documents will be produced in
days, not weeks, and we look forward to making good on our
response to that letter----
Chairman Obernolte. OK. Well, I'm glad----
Mr. Mayock [continuing]. In that timeframe.
Chairman Obernolte [continuing]. To hear that. Let me also
express a little bit of disappointment with your testimony. We
had specifically asked you to testify on the subjects of the
selection of SBTi as the validator and the setter of these
reductions targets and the process by which they were selected,
and you didn't--you barely touched on SBTi at all in your
testimony. So can you please elaborate as to how SBTi was
selected to fill this role?
Mr. Mayock. Yes, thank you for the question, Mr. Chairman.
In addressing the question of--well, a couple couple of points
up front, Mr. Chairman. One is I do want to emphasize the
status of this as a proposed rule. It was November a year ago
that the Biden-Harris Administration put the rule out in the
Federal Register----
Chairman Obernolte. Certainly.
Mr. Mayock [continuing]. As a proposed rule to gain comment
from the public. We--the Biden-Harris Administration had the
rule out for a three-month time period, were requested to
extend that time period, extended that time period, and have
received thousands of comments.
Chairman Obernolte. Sure. So how was SBTi selected to be
part of that rule?
Mr. Mayock. Yes. So in the selection itself and the
development of policy when it comes to third-party standards, I
think it's important to take a step back and understand the use
of third-party standards of which SBTi----
Chairman Obernolte. No, no, sir----
Mr. Mayock [continuing]. Is one of those standards----
Chairman Obernolte [continuing]. I understand. And that----
Mr. Mayock. Yes.
Chairman Obernolte. I'm not--we're talking about SBTi, not
the propriety of setting standards. So how was SBTi selected?
Were there multiple applicants?
Mr. Mayock. Well, in the identification of the third-party
standards that are in the proposed FAR rule, there was
extensive stakeholder outreach to seek--basically to find what
is the leading and wide--most widely used standard when it
comes to science-based targets? And when it comes to science-
based targets, and when it comes to these other targets, what
you find is that 6,000 companies globally used SBTi as a
nonprofit organization to set the standard and guide this
standard. And those 6,000 companies represent 1/3 of global
market capitalization. And so in the----
Chairman Obernolte. So you're saying that----
Mr. Mayock [continuing]. Policy review process----
Chairman Obernolte [continuing]. The third parties are the
ones that recommended SBTi. Did you ever contact SBTi? Did you
ask for other people to apply? Did you have meetings with them?
Mr. Mayock. Well, just to be clear, the identification of
any of the standards that were under review took place by
taking a look at all standards----
Chairman Obernolte. No, no, sir.
Mr. Mayock [continuing]. Under that setting.
Chairman Obernolte. I'm not asking about the standards. I'm
asking----
Mr. Mayock. Yes.
Chairman Obernolte [continuing]. About the entity that was
selected to enforce those standards, to set the standards and
enforce them.
Mr. Mayock. Yes, and I'm talking about the same thing, in
that SBTi is the third-party standard bearer. And when looking
at what are the leading third-party standard organizations when
it comes to science-based targets, SBTi far and away is the
most widely used and the most--and the leading standard, so
that was the----
Chairman Obernolte. I got it.
Mr. Mayock. That was that was the question that was put
before our office and other offices as the policy advisors----
Chairman Obernolte. Sure.
Mr. Mayock [continuing]. To the FAR Council.
Chairman Obernolte. So let me----
Mr. Mayock. What is the leading standard----
Chairman Obernolte. Let me ask you a different question
then.
Mr. Mayock. Yes.
Chairman Obernolte. Did you consider--since this is a
quasi-regulatory rule, did you consider empowering an agency of
the Federal Government, for example, the EPA to provide those
services? Because doing that, as opposed to a private business,
would have had some pretty powerful benefits. You--businesses
who would be afforded due process. They'd have appeal rights,
would--none of which exists when you delegate this to a private
company. So did you consider the EPA?
Mr. Mayock. No, in that the EPA--again, the primary
question was, who is the leading standard? What is the most
widely used standard? And the EPA, not to my knowledge, does
science-based targets.
Chairman Obernolte. All right. Well, I want to thank you
for your responses. I'm looking forward to CEQ actually
producing the documents that we asked for in March. The--and I
want to remind my colleagues that we asked the White House to
send someone. They sent Mr. Mayock, so anyone that's interested
in talking to the FAR Council, they had an opportunity to be
here today and elected not to. But I look forward to continuing
our discussion, Mr. Mayock. Thank you for your testimony.
Mr. Mayock. Thank you.
Chairman Obernolte. That concludes my question. I'd like to
recognize Ranking Member Foushee for five minutes for her
questions.
Mrs. Foushee. Again, Mr. Mayock, thank you for being here
with us today, though, as I said in my opening statement, there
are so many important issues you would probably be more suited
to address than this topic. Holding a hearing on any proposed
rulemaking is difficult. Government witnesses, like yourself,
are so limited in what they can share as the rule is being
finalized. But holding a hearing on a proposed rulemaking and
inviting an agency that is not leading the rulemaking process,
that is puzzling to me. So I want to be sure we have all of our
facts straight. I have quite a few questions here, so I would
appreciate if you could answer the first few by saying yes or
no.
No. 1, is CEQ promulgating the rulemaking titled
``Disclosure of Greenhouse Gas Emissions and Climate-Related
Financial Risk''?
Mr. Mayock. No.
Mrs. Foushee. Did CEQ write the language of the proposed
rule?
Mr. Mayock. No.
Mrs. Foushee. In your statement, you referenced the memo
CEQ co-authored pursuant to an Executive order. Did CEQ
determine how the proposed rule would incorporate the
guidelines laid out in the memo?
Mr. Mayock. No.
Mrs. Foushee. The title of this hearing refers to CEQ's
selection of SBTi. Did CEQ select SBTi for inclusion in the
rule or select SBTi for any contract, award, grant, loan, or
Federal funding of any kind?
Mr. Mayock. No.
Mrs. Foushee. At our last hearing on this topic just two
months ago, accusations of impropriety were made regarding the
so-called selection of SBTi. We've established that CEQ did not
write this rule. So let's talk about the memo CEQ co-authored.
When developing the memo pursuant to the EO, did CEQ meet with
SBTi?
Mr. Mayock. The CEQ met with a variety of stakeholders in
the development of our policy advice that we provided to the
FAR Council, and it's my recollection that we met with the
standards governance organizations as a matter of the due
diligence in putting the policy together. And my recollection
is that we did have one meeting--I recall personally one
meeting with SBTi as a part of that due diligence policy
development for the memo.
Mrs. Foushee. OK. When developing the memo, did CEQ also
meet with industry groups?
Mr. Mayock. We did. We met, for example, with AIA and a
wide variety of companies, nonprofits, nongovernmental
organizations, a number of organizations broadly.
Mrs. Foushee. OK. When developing the memo, did CEQ also
meet with contractors who would be required to adhere to the
rule's requirements if finalized?
Mr. Mayock. We did, including, for example, a number of
members of AIA.
Mrs. Foushee. Why is it important for CEQ to meet with a
broad range of stakeholders, including entities like SBTi,
industry groups, and impacted companies when developing policy
guidance?
Mr. Mayock. Well, as I shared with the Chairman, Ranking
Member, you know, the critical question here in using third-
party standards is what is the leading standard, and is it
widely accepted? And so we wanted to understand across the
three standards that have been proposed by the FAR Council, are
those truly the leading standards? Are they widely accepted?
And when doing that work, we identified certain facts of this
situation like 18,000 companies worldwide that sign on to CDP,
and those 18,000 companies representing over 50 percent of
global market capitalization. And so when we asked the question
what is the best third-party standard to go execute and deliver
on this question of severe climate risk and make our supply
chain most resilient, we identified what's the leading one in
the public domain.
Mrs. Foushee. Thank you for clarifying how CEQ was and was
not involved in the development of this proposed rule. I fear
the rampant speculation we heard at the last hearing will
continue at this one, but I think you have clarified that CEQ
is a misguided target for criticism of this proposed rule, and
I yield back.
Chairman Obernolte. The gentlewoman yields back. We'll hear
next from the gentleman from Mr. Miller--or gentleman from
Ohio. Mr. Miller, you're recognized for five minutes.
Mr. Miller. Thank you. And I agree with my colleague on the
other side of the aisle. I'm puzzled as well, sir. The
Committee asked for a witness for this hearing, and the White
House sent you. So why would they send you if you're not the
expert to make the decision? Are you wasting our time? Is this
obstructing congressional oversight? Which one is it? Are you
the expert that--President Biden and his Administration sent
you here, yes or no?
Mr. Mayock. Yes.
Mr. Miller. OK. So you're not the expert or you are the
expert, yes or no?
Mr. Mayock. I'm the Federal Chief Sustainability Officer.
Mr. Miller. You are the--a yes or no question.
Mr. Mayock. I'm an expert in----
Mr. Miller. Yes or no question.
Mr. Mayock [continuing]. Sustainability.
Mr. Miller. I'm reclaiming my time. Mr. Mayock, I want to
dig a little bit deeper into that very concerning hypothetical
I mentioned in my opening statement. Do you agree with my
assessment that SBTi has every legal authority and right as a
private business to change their legal analysis, methodologies,
or models whenever they want to without any public input?
That's capitalism after all, right? Yes or no? Or do I need to
read it over again?
Mr. Mayock. Well, they're a nonprofit organization, and
yes.
Mr. Miller. OK. Thank you. So rather than paint a broad
stroke picture, I'm going to highlight a very real scenario,
which you're probably unfamiliar where--with where this rule on
SBTi could literally endanger lives. And I like your smile
right now. Thank you. Hamas brutally attacked Israel last month
and continues to partner with their terrorist allies in an
attempt to wipe Israel off the face of the Earth. Israel has
defended itself and its citizens from mass casualty missile
attacks through its sophisticated multibillion dollar intercept
system called the Iron Dome. But, like anything that is being
used, it needs to be restocked. And just last month, the
Pentagon helped to do exactly that, transferring U.S.
inventories of Tamir interceptors to our ally. From your
knowledge of this rule, would you dispute the scenario that
SBTi could deny validation to a U.S. contractor of missiles
used by the Iron Dome based on the emissions of producing those
missiles? You're going to have to get back to me on that?
Mr. Mayock. I think I would have to get back to you on
that.
Mr. Miller. Yes, I bet you would. All right, thank you. You
know, I can talk to you about your waiver process and maybe
educate you a little bit. So there is a waiver process that you
guys do and that you're going to have to look at, and you're
going to be dealing with thousands of these waivers as you're
dealing with these emissions. So I'm just curious, when you're
going through the waiver process, I mean, do you really support
this rule? Do you really think that climate change as opposed
to saving our allies or Americans that were taken and killed
just a month or a month and a half ago is more important to
this world and to American lives and to my brothers and sisters
on the battlefield? Yes or no? Yes or no? Be careful with your
answer, sir. Yes or no, military we're talking about.
Mr. Mayock. I think I'd ask you to repeat the question,
please.
Mr. Miller. OK. I'm more than happy to. Do you think that
caring about climate change right now is worth more than
American and our allies' lives on the battlefield right now all
across the world as we have men and women deployed everywhere,
yes or no?
Mr. Mayock. I don't think that's at issue here.
Mr. Miller. It's--you're not answering the question. It's
yes or no. God, you guys are unbelievable.
Mr. Mayock. I appreciate the question but I----
Mr. Miller. So can I----
Mr. Mayock [continuing]. Don't think [inaudible]----
Mr. Miller. I'm reclaiming my time. So you know what this
reminds me of? In the Trump Administration if President Trump
hired the Koch brothers to run an entity, what would the
Democrats do? What would you all do? I promise you, you would
probably threaten impeachment and drag him again, like you did
mercilessly twice, which was unwarranted. I got to tell you,
I've been a freshman in Congress for 11 months. This is the
most blatant corruption that I have ever seen, and literally,
the White House sends you. You have to be so proud of yourself.
Congratulations. I yield back. It's disgusting.
Chairman Obernolte. The gentleman yields back.
I'll now recognize the gentlewoman from North Carolina, Ms.
Ross, for five minutes for her questions.
Ms. Ross. Thank you, Mr. Chairman.
Well, Mr. Mayock, you've received some harsh criticism
today, right off the bat, and it's also related to proposed
rulemaking, again, that your office did not draft and that you
do not have final say in finalizing. And the agency that does
have final say in finalizing that has received this
information, the information that we're discussing, and they
can proceed accordingly. You, however, have no power in this
situation.
And having this hearing doesn't strike me as a recipe for a
good use of your time, so I want to use that time more
effectively. I would like to try and ask the kinds of questions
that deserve our attention and that will inform the Committee's
deliberations on environmental issues going forward.
First, a major initiative of your office has been the
coordination of an agency climate adaptation plan. This plan is
critical for identifying climate vulnerabilities, integrating
climate risks into long-range planning decisions, and so much
more. Can you provide us with an update on the progress of
Federal agencies to make--what they've done to strengthen their
own climate adaptation and resilience since the initial plans
were released in October 2021?
Mr. Mayock. I'd be happy to, Congresswoman Ross. You know,
as I shared in my opening statement, President Biden has from
the beginning identified this as a clear and present danger for
the American people and the American Government. And, as I
identified in my statement, the United States has been--has
suffered from significant disasters due to climate over the
last five years in particular as the effects of global warming.
And this year in 2023, what will be the hottest year on record,
those effects visit not only the American public, but American
operations throughout the country and abroad.
And I wanted to note that not only have those billion-
dollar disasters ticked up from the average of eight that I
mentioned in my opening remarks to an average of 18 to a
current number in 2023 of 25, but those billion-dollar
disasters visit us in U.S. Government operations and, yes, us
in national security. So just in 2019, as an example, Offutt
Air Force Base in Nebraska suffered from record Missouri River
floods. They lost dozens of buildings, and they had a half-mile
of runway that was underwater, with estimates of those damages
being as much as a billion dollars. And that's our U.S.
Strategic Command, which oversees the Pentagon's nuclear
strategic deterrence.
And then in 2018, due to Hurricane Michael and Hurricane
Florence, at Tyndall and at Camp Lejeune, we suffered over 900,
almost 1,000 buildings destroyed between the two of those
bases, planes and runways destroyed, the defense communities,
in addition to the other communities around those bases,
affected to the tune of $5 billion for Tyndall Air Force Base
and $4 billion for Camp Lejeune and Camp New River.
So it's very real, and the President ordered us in the
first 120 days to revitalize adaptation plans so we get a hold
of climate risk, and the Defense Department and other major
departments report on those vulnerabilities and report on those
actions. And I'm happy to be here today to report that I think
the agencies have done an excellent job in revitalizing that
capability and understanding these issues and rebuilding
important critical national strategic infrastructure like
Tyndall Air Force Base, which is becoming a model for climate
adaptation. Thank you.
Ms. Ross. Thank you. Just to note for the Committee, my dad
served at Offutt Air Force Base, and Camp Lejeune is in North
Carolina.
So I think you've alluded to this, and we only have a few
seconds, but do you consider climate impacts something that's
important for Federal procurement when we rebuild these runways
and we rebuild these bases?
Mr. Mayock. It is essential.
Ms. Ross. OK. Thank you, Mr. Chairman, and I yield back.
Chairman Obernolte. The gentlewoman yields back.
We'll hear next from the gentleman from Florida. Mr. Posey,
you're recognized for five minutes.
Mr. Posey. Thank you, Chairman Obernolte.
Mr. Mayock, will U.S. space launch companies be required to
comply with SBTi or the so-called Science Based Target
initiative emission standards?
Mr. Mayock. Under the proposed rule, and it's proposed, as
I've noted, any company that has annual sales of $50 million or
more----
Mr. Posey. Is that a yes? Is that a yes?
Mr. Mayock. If the company has 50 or more million in sales
annually----
Mr. Posey. OK.
Mr. Mayock [continuing]. It's a yes for them.
Mr. Posey. OK. What about Russian space launch companies?
Will they have to comply?
Mr. Mayock. This rule is about the American--U.S.
Government supply chain, sir.
Mr. Posey. OK. Will China space launch companies have to
comply Chinese defense companies?
Mr. Mayock. I do not believe they serve the U.S. Government
supply chain, sir.
Mr. Posey. OK. How about Indian launch companies? Do they--
--
Mr. Mayock. Again----
Mr. Posey [continuing]. Have to comply? What about French,
the European Space Agency, French Aireon, will they have to
comply, their launch services have to comply?
Mr. Mayock. Under the proposed rule, if there is a European
company that provides sales to the U.S. Government for
aeronautics and they're over $50 million, they would have to
comply.
Mr. Posey. So the Russians don't have to, the Chinese don't
have to, the Indians don't have to. France, they have to. What
about Japanese space launch? Will they have to comply?
Mr. Mayock. Same rule would apply if they're providing over
$50 million worth of sales to the U.S. Government supply
chain----
Mr. Posey. What about----
Mr. Mayock [continuing]. As a prime contractor, yes.
Mr. Posey. So what about New Zealand, their space launches?
Mr. Mayock. Same rule.
Mr. Posey. They have to comply or don't have to comply?
Mr. Mayock. If they're providing $50 million worth of goods
and services to the U.S. Government, they do have to comply.
Mr. Posey. OK. So United States does, France, Japan, and
New Zealand. Russia and China, our biggest adversaries, they
don't have to comply, big competitors? Does that make sense to
you?
Mr. Mayock. The rationale beyond strengthening the
resilience of the U.S. supply chain does make sense to me.
Mr. Posey. Well, let's see. To some people they might
think, well, this is a Marxist way of helping America help the
Marxist regimes. You know, you give them an unfair competitive
advantage and put the United States at a disadvantage. I mean,
is it your intent to drive more jobs and more American workers
out of business, drive more jobs to these other countries?
Mr. Mayock. It is our intent to strengthen U.S. supply
chain and U.S. companies, and as I noted----
Mr. Posey. Well, how do the----
Mr. Mayock [continuing]. In my remarks, over 50 percent of
our existing----
Mr. Posey. How do you----
Mr. Mayock [continuing]. Major suppliers----
Mr. Posey. How do you strengthen----
Mr. Mayock [continuing]. Comply----
Mr. Posey. How do you--I mean, that doesn't pass the
straight face test, pal. I mean, how do you strengthen somebody
putting them at a competitive disadvantage?
Mr. Mayock. I think you strengthen them, Congressman, with
all due respect, by doing what all these major companies have
done themselves without the proposed rule to----
Mr. Posey. So why do you need a proposed rule if
everybody's happy doing it? I mean, I don't hear our--I don't
hear the Russians clamoring to get involved in this. I don't
hear the Chinese clamoring to get involved in this.
Mr. Mayock. I think what President Biden is focused on is
the security of the American people and security of the
American supply chain.
Mr. Posey. Would you be kind enough to tell me what
constitutional authority allows you to delegate government
functions to a foreign company without congressional approval?
Mr. Mayock. I'm not aware in the proposed rule of any
delegation of functions to a foreign company.
Mr. Posey. I mean, you're incorporated outside the United
States so you'll operate outside the control from either branch
of the Federal Government. So, you know, you're out there, it's
a rogue agency dictating policy that puts America at a
competitive disadvantage. I mean, I'd have a hard time
explaining to my constituents why this is a good idea.
Mr. Mayock. Well, the proposed rule does what other third-
party standards do, in the existing U.S. supply chain, for
example----
Mr. Posey. Well, if everybody wants to do it, why shove it
down their throat? Why do you need a rule if it's such a good
thing?
Mr. Mayock. Well, I'd be happy to provide an example of
another requirement of a third-party standard in the
government's supply chain, which has done a lot to----
Mr. Posey. I know----
Mr. Mayock [continuing]. Strengthen our supply chain.
Mr. Posey. Our main competitors, our main adversaries on
this globe, the people who wish us ill will have a competitive
advantage, and we're at a competitive disadvantage because of
your so-called Science Based Target initiative emission
standards reporting.
Mr. Mayock. I appreciate the question, Congressman, and I
think what the point of the Administration's rule and our
comprehensive policy is to strengthen U.S. companies and to
strengthen the U.S. supply chain.
Mr. Posey. Yes. That's some work. I yield back, Mr.
Chairman.
Chairman Obernolte. The gentleman yields back.
We'll hear next from the gentlewoman from Oregon. Ms.
Bonamici, you're recognized for five minutes.
Ms. Bonamici. Thank you very much to the Chairs and Ranking
Members.
Thank you, Mr. Mayock, for being here today. I've been on
this Committee and in Congress for more than a decade. We have
differences of opinion here in Congress, but people who come
here to testify, especially in this Committee on Science,
Space, and Technology, are typically treated with respect, and
I regret that you were not so treated today.
I've been also working on climate issues throughout my time
in Congress, and I'm going to ask you about that, but first, I
want to note that there seems to be a fundamental
misunderstanding about what this rule does and does not do. It
says nothing about how agencies make their ultimate decisions.
On contracts, agencies can use the validation information as
they may see fit, or they may waive the requirement entirely.
Nothing would allow SBTi to shut down a contractor's operations
overnight. That accusation is far beyond hyperbolic. There may
be legitimate criticism of this proposed rule, but we need to
focus on that, not on outlandish claims that we've heard today.
So I know well, Mr. Mayock, that climate change and extreme
weather are destabilizing forces that affect military
readiness, and I strongly support the Biden Administration's
work to address the climate crisis, so thank you for your work,
including the disclosure of emissions and climate-related risk.
I also strongly support the use of standards in those
disclosures. That's important to have those standards.
I'm going to take the opportunity that you're here today to
ask you a couple questions. We know now especially in light of
the Fifth National Climate Assessment that curbing greenhouse
gas emissions is urgent, and we know we have the strategies to
do so. In fact, according to the assessment, our country's
emissions have declined by 12 percent since 2007, even with a
growing population and economy. So this is an encouraging trend
driven by a transition from coal and other fossil fuels toward
renewable energy and technologies and improved energy capacity.
The assessment, the recent assessment emphasizes the
importance of natural solutions, something that I've been
working on, including blue carbon. Blue carbon refers to
restoring marine, coastal, and estuarine ecosystems using, for
example, mangrove, kelp, seagrasses. And those capture
atmospheric carbon at high rates. So the new assessment is
evidence that our climate strategies are lowering emissions,
but we know we need to do more.
So in 2021, CEQ and the National Oceanic and Atmospheric
Administration, NOAA, convened to launch the White House
Coastal Resilience Interagency Workgroup. And CEQ Chair Mallory
underscored the essential role that coastal communities play in
mitigating climate change. So how has CEQ worked to implement
blue carbon strategies to reduce atmospheric carbon? And how
can CEQ partner with agencies like NOAA to identify blue carbon
ecosystems in need of protection and work with coastal
communities to restore them?
Mr. Mayock. Thank you, Congresswoman. I would like to--
before I address that, I would like to pick up on your comment
regarding authorities and the suggestion that there's some
delegation of authority through the proposed rule. And I just
want to make crystal clear for the record, there is no
delegation of authority. The U.S. Government, the contracting
agency, the contracting officer have full authority that they
had before the rule and that they would have after the rule if
the rule was finalized.
Ms. Bonamici. I appreciate it. And again, this is a
proposed rule.
Mr. Mayock. It is a proposed rule, and the only thing that
goes to the third-party standards is information. It's about
information disclosure and sharing with the third-party
standards governance organizations. And, as I noted in my
testimony as well, we already have, you know, 50 percent of
existing major suppliers in the government supply chain that
would be subject to this rule that are reporting to Climate
Disclosure Project.
Ms. Bonamici. Already?
Mr. Mayock. Already, leading countries--leading companies
like GM, Cummins, Airbus, Palantir, Johnson Controls, and I
could go on. So those countries--those companies identified
that this was important for their business and to increase
their competitiveness, and we see that in a similar way in
developing this policy. This is about strengthening our supply
chain, making it more resilient. And we are following other
U.S. corporate leaders as we make--as we propose this rule.
Second, I just wanted to note, too, quickly that utilizing
third-party government standards is a standard thing that we
do. And one required standard is through the Global Electronics
Council, a standard called EPEAT (Electronic Product
Environmental Assessment Tool) that we have required government
agencies to utilize, and that has led to when they buy and they
dispose electronics--and that has led to--just in 2021, it's
touched 43 million electronics purchased by the U.S.
Government. It saved American taxpayers $2 billion, the
equivalent of 4 million households in the United States their
energy bills. So utilizing third-party standards through these
kinds of disclosures leads to savings, leads to transparency
publicly.
Ms. Bonamici. Sure. And, Mr. Mayock, my time has expired. I
appreciate your answer, and will you please respond in writing
to my question on blue carbon and the work the CEQ is doing on
that?
Mr. Mayock. Happy to.
Ms. Bonamici. Thank you, and I yield back.
Mr. Mayock. Thank you.
Chairman Obernolte. The gentlewoman yields back.
We'll hear next from the gentleman from Texas. Mr. Babin,
you're recognized for five minutes.
Mr. Babin. Thank you, Mr. Chairman.
In response to Chairman Obernolte's question about EPA's
activities related to this rule, Mr. Mayock, you said that you
don't believe EPA has target-setting capabilities. Are you
aware of EPA's Center for Corporate Climate Leadership?
Mr. Mayock. I'm aware of that, and I believe I said--and if
I didn't, I meant to say they don't have third-party standards
when it comes--the don't have standards when it comes to
science-based targets.
Mr. Babin. Well----
Mr. Mayock. That's my understanding.
Mr. Babin. Well, I just want to enter into the into the
record a page from their website titled ``target setting'' and
a paragraph that says, and I quote, ``EPA has developed two
target-setting resources,'' which are right there for anyone to
access, including you.
I also want to ask if you are aware of the fact that SBTi
did not even exist until last June, and now it is based in
Europe, of course, in the U.K., with zero Americans serving on
the board.
I also want to kind of switch over to space since I
represent Johnson Space Center. NASA and the Department of
Defense rely on contractors to conduct launch activities. Has
CEQ, NASA, DOD, or the FAR Council assessed the impact of civil
and national security space activities? If so, please provide
their input for the record. If the Administration did not
assess the impact prior to issuing the proposed rule, then we
should all be very concerned about how this rule could impact
our space exploration activities, as well as our national
security. And give me SBTi's expertise related to aerospace
systems engineering, rocket physics, space propulsion, and
astrodynamics. Can you do that?
Mr. Mayock. Can I provide you with that?
Mr. Babin. Yes.
Mr. Mayock. I'm happy to take a look at that and happy to
provide you if we have any information on that.
Mr. Babin. OK. In 2020, Amazon voluntarily committed to
setting a mission target--or reduction targets to having these
targets validated by SBTi. However, earlier this summer, SBTi
removed Amazon's validation after they failed to meet certain
submission deadlines. Amazon accused SBTi of changing their
methodologies and requirements for a submission, making it very
difficult for them to submit data in a meaningful and accurate
way. In other words, as you move--you move the goalposts. How
are companies supposed to meet SBTi submission guidelines and
methodologies if SBTi can change them seemingly on the fly and
without notice?
Mr. Mayock. Yes, as I noted, the question for us is are
they the leading standard and are they widely accepted? And as
I've noted throughout this testimony, information for the
record like the Amazon experience is welcome during this
proposed--as the information that we're gaining from this
Committee during this proposed rule time period----
Mr. Babin. How much of a financial burden would an abrupt
change by SBTi in methodologies and submission requirements
imposed on any U.S. company, not just--obviously, Amazon felt
like they had the rug jerked out from under them and then
withdrew. How is any U.S. company going to comply with this?
Mr. Mayock. Well, there's, you know, 6,000 companies
globally that currently comply with it that represent 1/3 of
global market capitalization. And then when it comes to the
U.S. supply chain specifically, there's approximately 100 of
our major suppliers that comply with SBTi currently, companies
that I mentioned like GM, CVS, Merck, Dell, Abbott Labs. So
there's--in the question in developing the policy and putting
it out as a proposed rule was, is it the leading standard when
it comes to science-based target? Is it widely accepted?
Mr. Babin. I would remind, again, our Committee--our
Subcommittee here that this is a brand new company, and you
have hundreds of people--of companies you say are having to
comply with them, and yet they weren't even in existence until
June of last year with no Americans on their board. I would say
this puts--as Mr. Posey said, this puts our companies, American
companies, at a distinct disadvantage.
One last question. Since SBTi is incorporated outside of
the United States, they will essentially operate outside of any
oversight or control from either the Administration, Congress,
or even the courts. Was this done intentionally?
Mr. Mayock. SBTi's incorporation, you know, is consistent
with a number of third-party standards incorporation. The
question is the third-party standard leading and widely used?
Mr. Babin. Was it done intentionally? That's what--could
you point us----
Mr. Mayock. And it was----
Mr. Babin [continuing]. To the constitutional authority
that allows you to delegate government functions to a foreign
company without----
Mr. Mayock. Yes.
Mr. Babin [continuing]. Congressional approval?
Mr. Mayock. I can tell you that the intention, that the
focus was on the standard and whether it's leading and widely
accepted by 6,000 companies and 100 of USG suppliers.
Mr. Babin. I think that's unsatisfactory as an answer.
Thank you. I yield back.
Chairman Obernolte. The gentleman yields back.
We'll hear next from the gentleman from Illinois. Mr.
Casten, you're recognized for five minutes.
Mr. Casten. Thank you, Mr. Mayock, for being here today and
for your patience with us.
You know, full disclosure, I think some of these
conversations are sort of silly. It's no offense to you.
Multiple U.S. Administrations have decided that we're not going
to participate in international standard-setting bodies when it
comes to climate, and now we're complaining that we don't have
a leadership role. When you choose to get in the back of the
line, that's where you end up.
I want to--I do have a concern I want to raise, but I want
to first make sure that--I think you and I have agreement on a
number of issues, but I want to just flip through a couple
things so we can--none of these are gotcha, but just--I want to
be quick to get to the final point. Do you agree that the U.S.
Government is exposed to climate risks?
Mr. Mayock. Yes.
Mr. Casten. Do you agree that the U.S. Government depends
substantially on contractors to carry out the work of the
government?
Mr. Mayock. Yes.
Mr. Casten. Are any of those contractors subject--currently
subject to voluntary domestic or international carbon
disclosure rules?
Mr. Mayock. I believe the answer is yes, but I would----
Mr. Casten. Yes.
Mr. Mayock [continuing]. Need to check on that. If they're
doing business globally, yes.
Mr. Casten. Yes, I would assume so as well. Are those rules
that they are currently complying with consistent with one
another?
Mr. Mayock. No.
Mr. Casten. OK. So far, I'm four for four. I'm hoping I can
finish up strong here. Is it in the national interest of the
United States for atmospheric CO2 emissions to rise?
Mr. Mayock. No.
Mr. Casten. All right. I'm pleased to see that we're on the
same page on everything. Now I get to the tricky question. In
the rules that you are contemplating applying--and again, I
don't really care who the contractor is--do they include scope
3 emissions?
Mr. Mayock. For the major contractors, those who supply--
those who have annual sales of $50 million and above, that is
one of three major--three party standards, yes.
Mr. Casten. And under the standards as you read them, is
the United States as a country currently decarbonizing per
dollar of GDP (gross domestic product) or carbonizing?
Mr. Mayock. Decarbonizing.
Mr. Casten. OK. Now I get to one where I disagree with you
on. And the reason that I--the reason I raised that is because
we have--and I had this conversation with Secretary Granholm in
here a few weeks ago. If you ignore scope 3, renewables are
kicking coal's butt, electric vehicles (EVs) are kicking IC
(internal combustion) engines' butt, efficiency pays, people--
given the choice between paying for fuel and not paying for
fuel, people like money. I know it surprises some of my
colleagues across the aisle sometimes, but having more money in
your pocket is a--that polls at 100 percent.
The U.S. oil and gas industry has responded to that, not by
providing a competitive product, but by massively ramping up
exports. And if we agree that it is in the national interest of
the United States to not increase atmospheric CO2
emissions, and the Natural Gas Act says that we should not be
approving LNG (liquefied natural gas) terminals unless they are
in the national interest, what are we doing, right?
And you can--I think you can only answer that last question
that the United States is decarbonizing if you ignore scope 3,
right? And this isn't about SBTi. Like who cares? Get somebody
who's good. I don't care. Get the best people in the world to
work for the best government in the world. Awesome. But we need
to be honest about what our goals are. And we need to have--if
we don't have--and, look, it is in our narrow self-interest, I
suppose, to tell the rest of the world that we're doing a good
thing and we're decarbonizing, but if we're saying, you know
that dirty, expensive fuel we have that nobody wants? We're
going to ship that to the Third World so that you can buy it
and burn it and pollute, and then we're going to take credit
for being the good guys. That ain't true.
And if we care about getting these rules right, if we care
about decarbonizing, we care about the national interest, we
need to hold ourselves as a government subject to the same
rules that it sounds like we're going to hold our contractors
to.
So I appreciate what you're doing. It's a good start. We
live in a big glass house, and let's not throw any rocks.
Thank you. I yield back.
Chairman Obernolte. The gentleman yields back.
We'll go next to the gentleman from Montana. Mr. Zinke,
you're recognized for five minutes.
Mr. Zinke. Thank you, Mr. Chairman, and thank you for
serving. As a former Secretary, it's not easy. I thank you for
the call of duty.
So I see in your job description you are in charge of
making sure the Federal Government prepares for and responds to
the impacts of climate change, the Federal Government. So
you're in charge?
Mr. Mayock. That is--I'm one among many with that.
Mr. Zinke. But the White House sent you. So quick other
questions. Are you aware the SBTi is a foreign company? Just
yes or no. Are you aware that SBTi is a foreign company?
Mr. Mayock. My understanding is they're a foreign
nonprofit.
Mr. Zinke. Foreign company, all right. Are you aware that
SBTi only incorporated in June of 2023 in the United Kingdom?
Mr. Mayock. Now I am, yes.
Mr. Zinke. OK. Are you aware that when the proposed rule
explicitly mentioned SBTi, that was released in November of
2022, so that was prior to them being a formal corporation? Are
you aware of that?
Mr. Mayock. I'm aware of that now, yes.
Mr. Zinke. Are you aware that Anabella Advisors and its
various satellite nonprofit organizations directed more than
$200 million to the Democratic Party campaigns and left-leaning
causes in 2020? Are you aware of Anabella and their ties to the
Democratic Party, $200 million?
Mr. Mayock. Only through the Committee's communications.
Mr. Zinke. OK. Are you aware that there's a financial
interest of We Mean Business, an Arabella advisory group and
new venture capital initiative in SBTi? Are you aware of the
link between the two?
Mr. Mayock. Only where I've read it in the communications
from this Committee.
Mr. Zinke. And when did you--from the communications in
this Committee? So you were unaware prior to this? Prior to
communications of this Committee, you were unaware of there's--
--
Mr. Mayock. I'm not----
Mr. Zinke [continuing]. A link between the two?
Mr. Mayock. I'm not familiar with this concept.
Mr. Zinke. OK. Are you aware that, as a foreign entity,
SBTi has no legal obligation to respond to or oversight from
Congress or, for that matter, the executive branch of the
United States Government? Are you aware of that?
Mr. Mayock. I'm aware of that now.
Mr. Zinke. All right. Are you aware that a founder of SBTi
Bill Baue said in a letter to this Committee, and I quote,
``SBTi structures itself on a double helix of intertwining
conflicts of interest?'' Were you aware of that statement?
Mr. Mayock. I'm not aware of that statement.
Mr. Zinke. Are you aware of a Rutgers--a Reuters report
from yesterday that four major banks, including HSBC, withdrew
from SBTi because the entity would not validate them solely on
the basis of fossil fuels?
Mr. Mayock. I'm not aware of that.
Mr. Zinke. Are you aware of the Federal Acquisition
Regulation in regards to sole-source contracts?
Mr. Mayock. I'm broadly aware of that.
Mr. Zinke. Are you aware that this sole-source contract has
irregularities that may cause question?
Mr. Mayock. I do not understand this to be a sole-source
contract, Congressman.
Mr. Zinke. Who specifically approved it, do you know, this
contract?
Mr. Mayock. Well, again, I'm not familiar with any contract
as part of this proposed rule.
Mr. Zinke. In your meetings with him, was it discussed, any
financial arrangements, entities? Because you did meet with
SBTi.
Mr. Mayock. I did have one meeting with SBTi, and we did
not have any discussion about finances.
Mr. Zinke. Mr. Chairman, I yield back.
Chairman Obernolte. The gentleman yields back.
We'll go next to the gentleman from Florida. Mr. Frost,
you're recognized for five minutes.
Mr. Frost. Thank you, Mr. Chairman, and thank you so much
for being here.
For all people, and especially my generation, the word
sustainability really means life-sustaining, and President
Biden's Federal Sustainability Plan is going to work to sustain
the livability of folks across the country, the world, and
especially my home State of Florida, which is rapidly become--
being destroyed by the climate crisis.
To date, what have been some of the successes of the
Federal Sustainability Plan, especially in the areas of
resiliency?
Mr. Mayock. I think there's a number of successes that
we've had with the Federal Sustainability Plan, inclusive of
the area of resiliency, and that those would go to--from a
resiliency perspective, I've had the opportunity to testify
today about how the U.S. Government has moved out in force to
assess our vulnerability to climate risk, climate risk as we
experienced at Tyndall Air Force Base in 2018, and then to
address that climate risk head on. And we see the Department of
Defense's leadership, for example, as a real success. And
they're rebuilding a more durable Tyndall Air Force base for
our security, and their leadership in creating tools such as
the DCAT (DOD Climate Assessment Tool) tool for climate
assessment vulnerability that is not only used by DOD now, but
is used by other Federal agencies to make sure that we're in as
resilient posture as possible. I think there's a number of
other accomplishments of the Federal Sustainability Plan that
I'm happy to go into, Congressman, but I also want to be
conscious of your time.
Mr. Frost. Yes. No, no, I appreciate it. I mean, what are
some potential obstacles to the implementation of the plan, and
what can Congress do to help the Administration?
Mr. Mayock. Well, one, I'd like to thank Congress--what
Congress has done to help the plan, and through President
Biden's leadership and Congress's leadership through the
Bipartisan Infrastructure Law, through the Inflation Reduction
Act, through the CHIPS Act, that's given a real boost to the
country as a whole and to the Federal Sustainability Plan
specifically. And so when it comes to creating a more efficient
and sustainable government powering our buildings and vehicles
on clean energy, utilizing vehicles that that are zero emission
vehicles, creating greater energy efficiency in our buildings,
continued support from Congress is always helpful. And we
appreciate the relationship we have with Congress and the
ability for Congress to support us.
Mr. Frost. The plan also commits the Federal Government to
net zero by 2050. Can you speak a little bit about the
outstanding challenges for the Federal Government in meeting
this commitment?
Mr. Mayock. I think from the outstanding challenges
perspective is that, you know, one of the challenges that we
are, you know, currently working through successfully, the
supply chain challenges as the United States and the globe
makes this historic transition, a transition that we've seen
include, you know, over $150 billion of investment from the
private sector since the passage of the Inflation Reduction Act
and over 200,000 new clean energy jobs, another million clean
energy jobs on their way in the next decade.
And so as that--as the economy makes that transition to
input the charging infrastructure, as Ford and GM move to
create the vehicles that they're creating for us to be using,
we're ready recipients for those vehicles, and we're ready to,
as I've stated in my testimony, make sure that the U.S.
Government does what it does best and lead by example when it
comes to sustainability.
Mr. Frost. In the proposed rule, the new regulations would
apply to just over 1 percent of Federal contractors. Folks that
take on the largest multimillion dollar contracts have the
potential to be large greenhouse gas emitters. Why is it
important to create new targets and disclosures for the largest
Federal contractors around greenhouse gas emissions?
Mr. Mayock. What's really critical, as I've shared in my
testimony today, is the U.S. Government is as vulnerable to
climate change and the clear and present danger and the clear
and present impacts of climate change as the rest of the United
States. And we've seen that in examples I've laid out today in
the Department of Defense installations, but throughout the
civilian side of the government as well.
And so making sure that our government does what other
leading companies have chosen to do by addressing climate risk
head on, companies like PWC, like Verizon, like Johnson &
Johnson, like Cisco by signing on to these third-party
standards, we're putting ourselves in a place where our supply
chain is going to be as resilient as possible. When those next
disasters come along, we're going to be in a much ready
position to handle those and to bounce back from those.
Mr. Frost. Yes, thank you so much for your time. And, you
know, as it relates to the climate crisis, the cost of not
doing anything is far greater than the cost of taking action
now.
I appreciate it, and I yield back.
Chairman Obernolte. The gentleman yields back.
We'll hear next from the gentleman from Georgia. Mr.
Collins, you're recognized for five minutes.
Mr. Collins. Thank you, Mr. Chairman.
You know, before I really get started, I want to make a
comment. My colleague said over there on the other side that
since we didn't get on board, that we deserve to be in the back
of the line. I'm going to tell you something. This is United
States of America. We are the best country in the world,
period. We don't have to get in any line. We are the line.
Now, what I want to talk to you about is SBTi and the fact
that they're a third party or whatever foreign corporation with
no American input, been in business for a little bit over a
year, and you say all these people that have joined up on their
own recognizance, whatever. You got four big banks that have
quit using SBTi's validation services after SBTi said it will
not validate any bank that finances new fossil fuel projects.
What are the government contractors supposed to do when SBTi
makes a similar requirement change, but your rule mandates
contractors go through SBTi in order to do business with the
government?
Mr. Mayock. Well, as I noted, there's 6,000 companies that
have signed up to SBTi and 100 U.S.--current U.S. major
suppliers----
Mr. Collins. Well, I'm asking what are they supposed to do?
I know you keep rattling that over and over, but they just
can't quit like those banks. So what are they supposed to do?
Mr. Mayock. Well, our expectation is that if the currently
proposed rule becomes a final rule, that companies are going to
sign on to SBTi.
Mr. Collins. OK. So we have a situation here where SBTi is
telling the banks who they can lend money to. So once your rule
is finalized, SBTi will be telling all U.S. contractors what
they can and can't do. So I'm going to use a real-life example
here because I'm a trucker, and truckers are the backbone of
our country. And our government uses their services for both
logistics, both domestically and abroad. So what if SBTi
decides tomorrow that all trucking companies must switch to EV
or else they can't be validated? Do you think that a private
foreign-based company should wield that kind of power over the
U.S. economy?
Mr. Mayock. The only requirement in the proposed rule is
that U.S. companies provide information to SBTi.
Mr. Collins. If you're going to--if this rule gets
finalized, SBTi will be telling all U.S. contractors what they
can and can't do, agree?
Mr. Mayock. That is not my understanding of the proposed
rule--it's that the contractors need to supply information----
Mr. Collins. Then why do you need the rule then?
Mr. Mayock [continuing]. To--because it's a common use of
third-party standards to----
Mr. Collins. No, if that's the case, people can voluntarily
do whatever they want to. You're saying if the rule is
finalized, that tells me that SBTi is going to be telling these
contractors what they can and can't do, correct? Correct.
Mr. Mayock. That's not my understanding of the proposed
rule, with all due respect.
Mr. Collins. Well, then y'all--I think you need to get an
understanding what y'all are trying to do over there.
Mr. Mayock. Well, I'm trying to provide that understanding
today, Congressman.
Mr. Collins. You are not doing too good of a job at it.
Let me ask you this, then. Director Mallory has been
invited to testify before Congress numerous times, yet she's
only shown up once. Why does Director Mallory refuse to attend
congressional hearings?
Mr. Mayock. I know that Director Mallory has testified
before Congress on numerous occasions, so----
Mr. Collins. I can attest she's only been to one.
Mr. Mayock. I think I share a different understanding about
her----
Mr. Collins. Not during this----
Mr. Mayock [continuing]. Testimony before Congress.
Mr. Collins [continuing]. Congress. I'm a freshman here,
so----
Mr. Mayock. OK.
Mr. Collins [continuing]. You know, during my tenure here--
--
Mr. Mayock. OK.
Mr. Collins [continuing]. The four times she's been
invited, she showed up once. Do you believe the executive
branch officials have an obligation to appear before Congress
and answer our questions?
Mr. Mayock. I do. I'm here today.
Mr. Collins. Do you believe that Director Mallory should be
here to justify the actions of this rogue agency to the
American people?
Mr. Mayock. I think it's important for representatives to
show up, and I think that that's a priority for the
Administration as a whole.
Mr. Collins. Thank you. I yield back, Mr. Chairman. I have
no more questions.
Chairman Obernolte. The gentleman yields back. We'll hear
next from my colleague from California. Mr. Issa, you're
recognized for five minutes.
Mr. Issa. Thank you, Mr. Chairman.
Sir, I waved on today because I'm trying to understand some
very basic things about the United States, its current role and
its future role. Would you agree that the United States
historically has been the premier standard-setting country of
the world, whether it's the underwriters' laboratory for safety
or the myriad of standards that we all deal with, including
safety in aviation? You name the area, we have been the
standard setters, haven't we?
Mr. Mayock. I don't know if my expertise extends that far,
but in my--within my expertise, yes. In sustainability, the
land of sustainability and the sector of that, a good example
is like the U.S. Green Building Council is another--is one
example that's set the international standards, sir.
Mr. Issa. So along that line, it is fair to say--I'll save
you having to answer it and just say it, it's fair to say that
we're the most entrepreneurial major country on the planet. We
have more startups, more unicorns. We have more unicorns in my
State of California than all the countries of Europe combined.
So why is it that there's--that by the commonsense rule of
contracting, that a non-existent company in Britain was chosen
to oversee and develop the ongoing standard, which they had to
do from scratch by definition, while claiming that a startup
here and/or human beings here or who could come here would be
insufficient?
In other words, if you had to choose to make--to authorize
somebody to become a startup in Britain or someone become a
startup in the United States for the same purpose, how could
you base choosing in any way, shape, or form a country--an
entity outside the United States? Many of my colleagues have
been concerned about the fact it's outside the United States.
I'll leave that aside for a moment and say, aren't we the best
place to choose for a startup organization to set standards?
Mr. Mayock. I think our essential question in the review,
sir, was what is--what entity is providing the leading standard
that's most widely accepted?
Mr. Issa. What if this entity didn't exist? This entity was
started after the decision was made in 2022 and then 2023. So
we're talking about a startup.
Mr. Mayock. It has been stated today that the entity was
incorporated later, but the entity SBTi, this initiative that
it is, has been in force for a number of years and prior to----
Mr. Issa. OK. But let's go through----
Mr. Mayock [continuing]. The Biden Administration----
Mr. Issa. OK----
Mr. Mayock [continuing]. Being in office.
Mr. Issa. What talent, expertise, trade secrets exist at
SBTi that cannot be duplicated inside the United States?
Mr. Mayock. Oh, I think that the United States has plenty
of capability to create a new--to create a standard-setting
body like SBTi to be able to perform that function, and the
U.S. Government has standards inside its contracting that some
are U.S.-based and some are internationally based.
Mr. Issa. But again, I'm frustrated. The CHIPS Act exists
to try to onshore and bring home a technology that we were the
creators of, and we outsourced it. Over time, it left. We are
all--fair disclosure, I'm the former Chairman of the Consumer
Electronics Association, was on the executive committee of EIA
(Electronic Industries Alliance), and we were a standard-
setting organization, still are. And just like IEEE (Institute
of Electrical and Electronics Engineers) or any of the other--
SAE and so on, I'm familiar with how the private sector has
successfully been involved in standard setting. As a matter of
fact, over at Judiciary, we spend a lot of time trying to
preserve that ability to create standards, and then Congress,
or government in general--Federal, State and local--refer to
those when it's legislating.
So I'll go back, final time, with some frustration. The
Chairman of this Committee has called and sent a request for
information and not gotten it, including the deliberative
decision that you're claiming was made. There wasn't a
competitive bid process. There was not a broad outreach for who
would like to do it.
So I'll close with this, and it's a question but it's open-
ended, and I would hope you could answer it. Wasn't there
anyone who could have done it in the United States? And since
you didn't look, aren't you responsible for making a decision
to outsource outside America something that, in fact, over time
is an important asset for America to have, and by overseeing
it, gift it to the world?
Mr. Mayock. I think, Congressman, you're, likely through
your experience in electronics, familiar with the Global
Electronics Council, and I would note that the--in the proposed
rule, the SBTi is a similar situation. The question is what's
the leading standard currently, and is it widely accepted? And
some of those standards for which U.S. companies abide by are
international, and some of them are United States-based. And
when we looked--and we did look in the United States for a
leading standard when it comes to science-based targets, and we
didn't find any. So that was really the focal point of our--of
the policy development question.
Mr. Issa. Well, Mr. Chairman, thank you for your
indulgence. I will say that nothing you're saying here today
really makes sense when America's leadership in electronics, in
lots of areas, is generally stifled when Europe is involved in
setting standards that often give them competitive advantage.
The history of that is constant. It's one of the reasons that
we serve on global standards organizations, but each coming
with their own standards. Even Japan has its own Society of
Automotive Engineers for a reason, and that is that the
domestic issues in development are important. And usually, the
United States leads the world after we do our own standard
setting, our own oversight. We certainly do in electronics
safety. We certainly have in a lot of other areas. And for a
country that has led in reducing energy consumption and its
carbon footprint, I find it unacceptable that you were unable
to at least offer somebody the opportunity to bid.
Thank you, Mr. Chairman. I yield back.
Chairman Obernolte. The gentleman yields back.
We'll hear next from the gentlewoman from New York. Ms.
Tenney, you're recognized for five minutes.
Ms. Tenney. Thank you, Mr. Chairman and Ranking Member.
And, as in our last hearing on this matter, I ask unanimous
consent to insert the Science Based Targets initiative's
articles of incorporation, a document from We Mean Business
stating that they are a project of the New Venture Fund, and
the ``Who We Are'' page from the New Venture Fund, which states
that they're managed by Arabella Advisors into the record.
Chairman Obernolte. Without objection.
Ms. Tenney. So, Mr. Mayock, I want to jump right in. We've
had a lot of issues here today, and thank you for being here. I
know it's not always an easy position to be in. But I know my
colleagues have been focusing on so much of how do we get to
this company being the only option and trying to get an answer
out of you as to how this company is the only option, foreign-
based, foreign board of directors, as it says in the documents
that we've submitted for the record.
You talked about--and in your testimony just a little while
ago, that President Biden's focus and your focus is on the
security of the American people, yet we have a foreign company
able to get the information from American companies
contracting, and that this is--this regulation puts legal
issues, national security issues at risk with a foreign entity,
not to mention the controversial nature of this foreign
entity's umbrella organization that is a Democratic dark money
operation that raises, you know, hundreds of millions, billions
of dollars over the years to donate to Democratic donors. And
yet this is the only option that these American companies have.
And so I'm just--I know some of my colleagues on the other
side, particularly Mr. Casten said, I don't care who the
contractor is, and I don't care who the entity is. But I think
that, you know, some of my colleagues raised a really good
point. If this were a Republican Administration and we had a
dark money Republican operation putting up as the sole source
of determining the emissions for these American companies, was
a foreign company controlled by the Republicans and donates to
Republican umbrella organizations and all kinds of entities, I
think he would be concerned about that.
And I think from a--the American people's perspective,
don't you think as--just as an American citizen, not someone
who is, you know, involved in--maybe a Member of Congress or in
serving in your role would be concerned that we would have
something so politically charged like Arabella Advisors create
an entity--or so it appears--after this rule was created
because we were looking for something to create so we could
find an entity? Don't you think that would be suspicious to any
American regardless of their political persuasion?
Mr. Mayock. I can just assure you, Congresswoman, that our
focus is--was on what is the leading standard in the
marketplace, and is it widely accepted?
Ms. Tenney. But--right, but reclaiming my time. What--
you've said that, but we're talking about giving the ability to
shut down an American company's opportunity to get a contract
based on political views. Wouldn't that be the case here if
your--if this is the only option? Wouldn't we want a choice?
Wouldn't we want other companies to be able to be part of this
mix to make these standards, and especially companies that
maybe existed prior to the creation of this rule who are
already engaged in this business instead of one that was
created by a dark money, you know, Arabella Advisors-type group
created just for this purpose? So it looks very suspicious. It
doesn't look like an open-ended process.
And so one of the things that you've stated, and I want to
just clarify this, is--and it hasn't been accurately set forth,
and I just want you to clarify it. The Carbon Disclosure
Project is where companies actually make their emissions
public. Is that correct?
Mr. Mayock. Yes.
Ms. Tenney. So SBTi, the company in question here, the sole
contractor that we all are subject to, a foreign entity created
by dark money Democratic donor super PAC, sets the standards
for the emissions reduction and validates that reduction.
Failure to get this validation from this company that's under
the umbrella of a dark money Democratic super PAC makes the
company non-responsible and unable to contract with the
government unless it gains a waiver from the contractor. Is
that true?
Mr. Mayock. That's----
Ms. Tenney. That's what the rule states. So----
Mr. Mayock. Yes, I----
Ms. Tenney [continuing]. Is that OK?
Mr. Mayock [continuing]. Think we have a different
understanding of the rule, and so I'm happy to share----
Ms. Tenney. But the rule is a mandate----
Mr. Mayock [continuing]. My understanding of the rule.
Ms. Tenney [continuing]. Though. It says----
Mr. Mayock. So----
Ms. Tenney [continuing]. It has to go through SBTi.
Mr. Mayock. You have to disclose a----
Ms. Tenney. Well, disclosure is the----
Mr. Mayock [continuing]. Science-based target----
Ms. Tenney [continuing]. Carbon Disclosure Project.
Mr. Mayock. Right.
Ms. Tenney. SBTi----
Mr. Mayock. Yes.
Ms. Tenney [continuing]. Is the company that gets to decide
if you get to have this contract or not. And you have to get a
waiver, or you don't get it. So you have to go through a
Democratic dark money super PAC subdivision in order to get
your contract approved. And as--I think it was Mr. Issa or Mr.
Zinke asked you--you said you weren't aware of it--but as shown
by a former board member of SBTi, that these--some of these
contracts are awarded on a partisan basis. If you're a donor, a
Democrat donor, then you're going to get that contract. Don't
you think that's unfair?
Mr. Mayock. I think, again, our process of focusing on
the--of what's the leading standard and what's widely
accepted----
Ms. Tenney. You're talking about standards. I'm talking
about what's----
Mr. Mayock [continuing]. By 6,000 companies----
Ms. Tenney [continuing]. In place. This is a mandate, is it
not?
Mr. Mayock. This is a requirement----
Ms. Tenney. So requirement----
Mr. Mayock [continuing]. In order to----
Ms. Tenney. Is a requirement a mandate, do you think?
Mr. Mayock. It's a requirement----
Ms. Tenney. This is----
Mr. Mayock [continuing]. In order to contract----
Ms. Tenney. This is semantics, but----
Mr. Mayock [continuing]. With the U.S. Government.
Ms. Tenney [continuing]. Requirement means mandate, right?
So we have to use SBTi. Is that correct?
Mr. Mayock. If the proposed rule moves to final, and then
SBTi is----
Ms. Tenney. Right.
Mr. Mayock [continuing]. Yes.
Ms. Tenney. So it is a mandate, requirement, to use a sole
entity that was created after the formation of the rule by a
Democratic dark money entity that is--has a preference for
Democratic companies that donate? Isn't that exactly what----
Chairman Obernolte. The gentlewoman's time has expired.
Ms. Tenney. Isn't that exactly what everyone in America
hates? I mean----
Chairman Obernolte. You could submit that for the record to
Mr. Mayock.
Ms. Tenney. Thank you, Mr. Chairman. I yield back. And
thank you for your testimony today.
Mr. Mayock. Thank you, Congresswoman.
Chairman Obernolte. That concludes our questioning. I'd
like to thank all of the Members of the Subcommittees for their
questions.
Mr. Mayock, I'd also like to thank you very much for being
here and for your testimony. But two points I'd like to make
briefly as we close here. The first is that we here in Congress
have a constitutional obligation to perform oversight. That
oversight role does not have to be adversarial, but making it
non-adversarial requires transparency and responsiveness. So
I'm looking forward to receiving the results of our inquiry
back in March within, as you say, days, not weeks, hopefully.
The second point is that there is a big difference between
adopting a third-party standard and requiring U.S. companies to
contract with a third party to validate and enforce that
standard. You have said several times today that the rule that
we're talking about is not a final rule, and so I am in hopes
that you will take our concerns about the selection of SBTi and
the role that that company would play in this process back to
your agency and the Administration and seriously consider it as
this rule is finalized.
The record will remain open for 10 additional days for
comments and written questions from Members.
And with that, this Committee meeting is adjourned.
[Whereupon, at 3:33 p.m., the Subcommittees were
adjourned.]
Appendix I
----------
Answers to Post-Hearing Questions
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Appendix II
----------
Additional Material for the Record
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
[all]