Climate Contract Playbook Edition 3
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There is reference in clause 2 to ‘climate change risks’ to the business, but no guidance as to what might constitute such risks. This may be fine to leave broad for the party relying on disclosures, but the disclosing party would likely want much more specificity and may wish to reference the climate change risks referred to in the recommendations of the Task Force on Climate-related Financial Disclosures, or any guidance from corporate or securities regulators in the jurisdiction.
Notes for users
Additional Definitions Carbon Budget means [x] the aggregate of [value] tonnes of Carbon Dioxide Equivalent of Greenhouse Gas emissions permitted within the period of [YEAR to YEAR]. Carbon Dioxide Equivalent (CO2e or CO2eq) means the standard metric measure used by the UN’s Intergovernmental Panel on Climate Change (IPCC) to compare the emissions from various Greenhouse Gases (GHGs) on the basis of their global warming potential over a specified timescale in order to express a Carbon Footprint that consists of different GHGs as a single number. Carbon Footprint means the amount in tonnes of Carbon Dioxide Equivalent of Greenhouse Gas emissions that will be released into the atmosphere as a result of the [manufacture/supply/use] of [the Product/Service] determined in accordance with international carbon reporting practice, being the accepted practice from time to time in relation to reporting for the purposes of the protocols to the United Nations Framework Convention on Climate Change. Disclosure Letter means the disclosure letter in the agreed form having the same date as this Agreement from the [Sellers] addressed to the [Buyer]. Disclosure Documents means the Disclosure Letter and the USB memory stick containing the documents included in the electronic data room maintained by the [Sellers], an index of which is attached at Schedule [1] of the Disclosure Letter. Greenhouse Gases (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 at the date of this agreement]. [These GHGs are currently: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulphur hexafluoride (SF6), and nitrogen trifluoride (NF3)]. Material Climate Contracts means any contract, agreement, arrangement or similar between the Company and a third party that: a) contributes to more than [5]% of the Company’s [Scope 2 [or] Scope 3] emissions; b) a failure to perform by either party or a material breach by the counterparty could result in a material risk that the Company will not meet an interim target it has set as part of its Net Zero Target and/or exceed its Carbon Budget; or c) is identified as an onerous contract or otherwise relates to a material risk on the climate change risk register referred to in clause 2.
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