Climate Contract Playbook Edition 3
48
[Zain’s clause] NEW
The Origin Story
Child’s name
Zain’s clause
Carbon Footprint Reduction - Mutual Notification Right (Carbon Footprint Reduction Notice)
Full name
Practice Area / Sector
Commercial, Public Procurement
Supply chains often hold the key to emissions savings 17 . However, contractual obligations may turn out to have a more significant climate impact than originally envisaged at the time of contracting. Unless there is a change management provision, contracts do not give sufficient flexibility to parties to adjust their obligations to become ‘lower carbon’ or require their counterparty to do the same.
Issue
A standard clause containing mutual obligations to allow each/all parties to an agreement to either: • perform their own obligations in a way that reduces their carbon footprint; and/or • require other parties to perform their respective obligations in this way. Many significant Outsourcing, Construction and IT contracts have detailed change management provisions that would allow a party (often the customer) to request a change to obligations. However, none are focused on carbon reduction and are often not mutual. The parties to an agreement should be familiar with the issues in their sector that could increase their carbon footprint be that business travel emissions, direct v indirect flights, importing produce, delivery miles, food wastage, packaging, catering, single use items etc. These will differ depending on what is being supplied or procured but the clause can be used on a wide range of commercial relationships that don’t traditionally have change management and carbon targets imbedded:
Solution
Context
• • • •
Professional Retainers Consultancy Contracts
Catering Contracts
Many other general commercial contracts
Contracting parties can control the outcome of their Scope 1-3 emissions. Since all parties are entitled to alter either their own performance or that of their counterparties to save carbon, the opportunities are considerable.
Impact
All types of contracting parties (public and private entities, individuals, law firms, professional firms).
Stakeholders
17 https://www.cdp.net/en/articles/media/supply-chains-hold-the-key-to-one-gigaton-of-emissions-savings-finds-new-report
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