Climate Contract Playbook Edition 3
29
[Owen’s clause]
The Origin Story
Child’s name
Owen’s clause
Full name
Net Zero Target Supply Chain Cascade Clauses
Practice Area / Sector
Commercial
Many businesses and organisations have publicly committed to a net zero target across their value chain. Their supply chains and business partners contribute to their emissions and thus whether they achieve their net zero target.
Issue
Clauses that “back to back” or align a business’s net zero target with its supply chain and business partners, thus enabling the business to achieve its target or take control to achieve it.
Solution
Many businesses and organisations are publicly announcing targets to be net zero by a particular date, not just in their own operations, but including emissions upstream in their supply chains and downstream in their distribution networks 9 . Some such as Unilever have gone further and declared they will become ‘carbon positive’ by 2030 10 . The UK government has a target to be net zero by 2050. UK businesses and organisations may be required by law to be net zero in order to achieve this target, or it may simply become economically unfeasible for emissions intensive companies to operate within this framework. In order to achieve a net zero target, a business or organisation will need to work with its suppliers and partners. As such it is necessary to pass on obligations through contracts to ensure targets are met. The clause will ensure that business and organisations have the greatest chance of achieving their net zero targets. Cascading net zero obligations through a value chain should accelerate the rate of change in the economy and mean that net zero targets become common place. The key stakeholders that you think need to be engaged to deliver this Impact 1. Suppliers and business partners 2. Procurement teams 3. Sustainability managers 4. Precedent and know how providers 5. Professional support lawyers 6. Private practice firms
Context
Impact
Stakeholders
9 https://www.edie.net/news/6/Beyond-Paris--500-companies-target-net-zero-by-2030/ 10 https://www.unilever.com/sustainable-living/reducing-environmental-impact/greenhouse-gases/global-climate-action/
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