Greenhouse Gas (GHG) Emission Target-Setting

Greenhouse gas (GHG) emission target-setting means establishing quantified targets to reduce an organization's greenhouse gas emissions, generally over specified time periods and in alignment with the Paris Agreement or a net-zero pathway. The emissions in question cover an organization's activities, facilities, assets and supply chain.

In Canadian federal procurement, the formal wording is "the setting of reduction targets" rather than "GHG emission target-setting." The phrase comes from the Government of Canada's Standard on the Disclosure of Greenhouse Gas Emissions and the Setting of Reduction Targets. The standard requires applicable suppliers to disclose their emissions and set reduction targets through Canada's Net-Zero Challenge or an approved equivalent standard or initiative, as explained in CanadaBuys guidance on the standard.

The concept belongs to climate accounting and emissions management. An organization measures or discloses its emissions, establishes a baseline, and adopts a quantified reduction objective.

The Treasury Board standard behind the wording

The Treasury Board of Canada Secretariat establishes the Standard on the Disclosure of Greenhouse Gas Emissions and the Setting of Reduction Targets. It is made under the Policy on Green Procurement, applies to federal organizations subject to that policy, and came into force on April 1, 2023. The Treasury Board page on other procurement measures sets out these details.

Public Services and Procurement Canada reflects the same direction in its sustainable development strategy. The PSPC 2023-2027 strategy says procurements over $25 million are to include measures that induce suppliers to measure and disclose their GHG emissions and/or adopt a science-based target to reduce emissions.

Which procurements are covered and which are excluded

• The standard concerns federal procurements of goods, services and construction valued at more than $25 million, according to CanadaBuys.
• It does not apply to intergovernmental contractual arrangements, emergency procurements or foreign military sales.
• Defence suppliers should note the foreign military sales exclusion, since procurements established through that channel fall outside the standard.

How suppliers demonstrate compliance

Suppliers can demonstrate the required action by participating in Canada's Net-Zero Challenge or another approved equivalent standard or initiative. The exact obligation depends on the procurement documents. Depending on the solicitation, a supplier may need to disclose emissions, present a reduction target, show participation in an approved initiative, or provide evidence of progress toward net zero.

Solicitation or contract documents can carry evaluation criteria or instructions on measuring and disclosing a company's GHG emissions, along with evidence of actions toward net-zero targets by 2050. A published example is a request for proposal posted on CanadaBuys.

How NATO uses the term

NATO's Greenhouse Gas Emissions Mapping and Analytical Methodology gives guidance and tools for calculating emissions from NATO civilian and military facilities, installations and assets. Emissions data are collected and analysed to support the setting of GHG-reduction targets, but the methodology itself does not set those targets.

NATO has stated organizational targets of reducing emissions by at least 45% by 2030 and reaching net zero by 2050, as recorded on its climate change and security page.

What it means for a supplier bidding on Canadian public contracts

Check the contract value first. A federal procurement over $25 million for goods, services or construction may require or request that you measure and disclose emissions and set reduction targets, per CanadaBuys. Then read the solicitation closely.

• Look for evaluation criteria or instructions on GHG disclosure and net-zero evidence.
• Confirm whether Canada's Net-Zero Challenge participation, or an approved equivalent, satisfies the requirement.
• Confirm whether an exclusion such as emergency procurement or foreign military sales applies.