Climate Contract Playbook Edition 3
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Users to consider the legitimate interest of the supplier to ensure the Climate Remediation Fee is not unenforceable as a penalty. This is envisaged to be used by a larger corporate purchaser. Users may wish to use a bid document clause format to address the issue of incentivising higher estimates, e.g. ‘Climate Part 36 offer’ ‘Green Part 36 Offer’. Users may wish to instead use softer incentives such as rights of first refusal. An example would be a ‘climate option’, where the Purchaser has option to pay Supplier to enact carbon reducing changes in systems, at cost of Supplier, or at a discount. The Purchaser is then able to lower its own emissions profile and Purchaser incentivised not to deviate from climate behaviour standards; if it does then it can still reduce its carbon footprint with what amounts to financial assistance from the Purchaser. The climate warranties may be used in M&A transaction documents.
Notes for users
Recital [Note: Agreement to contain recital below in addition to the other recitals relevant to the agreement.]. The parties acknowledge that performance of this agreement by the parties is expected to have climate and ecological impacts as detailed in this agreement.
Climate and Ecological Impacts Under this Agreement 1.1
The parties acknowledge that the performance of this agreement will result in certain climate [and ecological] impacts, including the emission of greenhouse gases. For the purpose of this agreement, the parties agree that the quantity of greenhouse gas emissions related to this agreement will be quantified first in the Initial Emissions Report and then in subsequent Annual Emissions Reports. Each party agrees to use all reasonable endeavours, and co-operate in good faith with the other party and its contractors, to minimise as far as reasonably practicable the quantity of greenhouse gas emissions related to this agreement as set in accordance with clause 2.1.
1.2
Climate Reporting and Warranties [Note: The parties should agree a mechanism for measuring their climate and environmental impacts under this agreement. The warranties below should be adjusted accordingly. These could also be used as warranties in M&A transaction documents.]
2.1
The Supplier agrees to: 2.1.1
collect sufficient data, and analyse that data as required, to populate the Initial Emissions Report and the Annual Emissions Reports; provide the Customer with the Initial Emissions Report within [twelve (12)] months after the start date of this agreement; provide an Annual Emissions Report no later than forty (40) Business Days after the applicable Emissions Report Date; [and]
2.1.2
2.1.3
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