Climate Contract Playbook Edition 3
147
Stakeholders
1. Insurers and insureds across multiple sectors and industries.
Application
All insurance contracts.
Clearly, such a clause would be a strategic policy decision for an insurer in the same way that some banks, as a policy, want their whole lending portfolios to be Pairs aligned 76 .
Insurers may decide to allow cover for certain high GHG emitting activities where the cedant commits to meeting or working towards specific targets for reducing GHG emissions.
This clause has been drafted widely, in order to encompass any type of insurance policy and to demonstrate the principle being considered. Further specific and detailed drafting would be required for any specific policy of insurance.
Notes for users
Drafters should consider if the definition of Climate Change should be limited to effects caused by human activity. Policyholders will want to amend the definition in this way and Insurers will prefer the wider definition.
Drafters should consider if the definition of GHG Emissions should be limited to only Scope 1 (direct emissions e.g. from fuel consumption) and 2 Emissions (indirect emissions from electricity purchased and used by the Insured) rather than Scope 3 Emissions (all indirect emissions other than Scope 2 Emissions) (see the definition in the TCLP Glossary). Insureds will want this as it narrows the exclusion.
Additional Definitions Greenhouse Gas (GHG or GHGs) means the natural and anthropogenic gases which trap thermal radiation in the earth’s atmosphere and as specified in Annex A to the Kyoto Protocol to the United Nations Framework Convention on Climate Change (UNFCCC) or otherwise specified by the UNFCCC and which currently include carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulphur hexafluoride (SF6), and nitrogen trifluoride (NF3). Greenhouse Gas Emissions (GHG Emissions) means emissions of Greenhouse Gases over a specified area and period of time, each expressed as a total in units of carbon dioxide equivalent (CO2e) [and calculated in accordance with the GHG Protocol Corporate Accounting and Reporting Standard or such other equivalent and generally recognised Greenhouse Gas emission calculation methodology]. Claim means written demands, civil or criminal proceedings, extradition proceedings, regulatory or administrative proceedings against the Policyholder for actual or alleged, negligence, misstatements, default, breach of duty or breach of trust.
76 https://home.barclays/society/our-position-on-climate-change/
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