Climate Contract Playbook Edition 3
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Climate Change Event : an event, series of events or circumstance arising from the physical impacts of climate change that is either Pan-terra or Epi-terra in scope and prevents a party from performing its obligations under this agreement [including an obligation to pay money], and includes but is not limited to: a) unavailability of water, clean air or other natural capital required by a party to manufacture or supply the [Products/Services]; b) damage to a party’s premises, including flooding due to sea level rise or an increased intensity of rain and storms; c) disruption of logistics and transport systems relied on for the supply and distribution of key inputs or outputs; d) unsafe working conditions due to heat stress, extreme weather or increased disease; e) damage or disruption to food supply chains, housing or transport affecting the availability of food, shelter or transport for workers; f) unavailability of insurance; g) unavailability of workers for other reasons caused by the event; and h) [INSERT OTHERADVERSE EVENTS] Current Liabilities : a party’s financial obligations falling due for payment during the Period of Disruption. Embedded Carbon : the Greenhouse Gas Emissions emitted during the lifecycle production, delivery and disposal of the [Products/Services]. Force Majeure : any circumstance not within a party’s reasonable control including, without limitation: a) terrorist attack, civil war, civil commotion or riots, war, threat of or preparation for war, armed conflict, imposition of sanctions, embargo, or breaking off of diplomatic relations; b) nuclear, chemical or biological contamination or sonic boom; c) collapse of buildings, fire, explosion or accident; d) any labour or trade dispute, strikes, industrial action or lockouts; or e) interruption or failure of utility service, but excluding a Pandemic or Climate Change Event. Greenhouse Gas Emissions : gases that contribute to or accelerate the greenhouse effect by absorbing infrared radiation, including but not limited to: carbon dioxide, methane, nitrous oxide, sulphur hexafluoride, hydrofluorocarbons, perfluorocarbons and chlorofluorocarbons. Disruption Liquidity Ratio : a liquidity ratio measuring a party’s ability to maintain its operations (where possible) and pay its staff for the Period of Disruption, calculated as Operating Cash Flow divided by Current Liabilities. Operating Cash Flow : the net amount of cash or cash-equivalents being transferred into and out of a party’s business during the Period of Disruption.
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