Climate Change Due Diligence Questionnaire for Suppliers
A due diligence questionnaire (DDQ) that asks potential suppliers to provide information regarding a wide range of climate change-related issues going beyond the standard questions.
What this clause does
Customer procurement teams can appraise supplier approaches to climate-related risks and impacts (if at all) and how well they align with the customer’s own climate strategy, targets, and obligations. The DDQ imports climate considerations as a consideration in procurement which is vital for decarbonizing supply chains.
Clauses
Introduction
We are making this information request as part of our supplier due diligence questionnaire.
[Insert paragraph on the strategic importance of climate change issues to the Customer (for example, by reference to its corporate strategy)]. Accordingly, the Customer is making this information request to understand how the Supplier approaches climate change-related issues. Please note the Response Guidelines below and provide your answers in the spirit of openness and transparency – the Customer does not expect the Supplier to be ‘perfect’ and would prefer the Supplier to be honest if particular areas have not been addressed to date.
Response Guidelines
[Drafting note: Standard Response Guidelines to be inserted by Customer’s legal advisers.]
This is an initial request for information and we may ask for further information.
Responses to this information request are subject to the warranties, guarantees and indemnities in the legal documents relating to the [supplier's bid OR services etc.].
Responding to this questionnaire shall not create the presumption of a legal relationship between the parties, including but not limited to any contract, joint venture, partnership, or agency relationship.
Questionnaire
Please provide the information and copies of documents requested below.
Corporate policies, processes and risk analysis
1. Provide details of how climate change issues are considered in Supplier’s corporate strategy or business plan, including any examples of where it has mapped against U.S., United Nations, EU, or other international climate and sustainability goals.
2. Has Supplier set a Net Zero Target, a Science Based Target or a Carbon Budget, signed up to Race to Zero, or adopted a climate transition plan? If so, provide details of the target, budget, or plan, including the year by which Supplier plans to meet its targets.
3. Does Supplier assess and disclose climate risks and opportunities according to the recommendations of the TCFD or any other climate disclosure and reporting standards or frameworks (for example, GRI, ISSB, CDP, or SASB)? If so, please provide details regarding the reporting standard(s) or framework(s) used, and provide copies of the most recent [●] years of disclosures or state the public sources from which such disclosures and related information may be obtained.
4. If Supplier has a climate or sustainability policy, provide a copy and details of any key performance indicators it has set to measure its success against this policy.
5. If Supplier publishes a corporate social responsibility report, sustainability report, or similar reports or scorecards provide copies of the most recent [●] years of reporting.
6. Does Supplier voluntarily report GHG Emissions under the GHG Protocol or other GHG reporting standard? If so, please describe Supplier's practices, including a description of appliable standards and the scope of emissions reported, and provide copies of the most recent [●] years of disclosures.
7. Is Supplier required to report GHG Emissions to any government or regulatory agency? If so, identify them and provide copies of the most recent [●] years of reporting in each jurisdiction, including any independent verification of its reporting.
8. Provide details of all estimated GHG Emissions [or other Carbon Footprint measurements] by Supplier and its supply chain relating to the contract or services or goods that are the subject of this bid or procurement, including the standard used for calculation, any benchmarking versus peers and/or industry standards, any independent verification of its GHG Emissions, and any other documentation or reporting, public or otherwise, of GHG Emissions relating to the goods or services to be provided.
9. Provide details of how Supplier embeds achievement of its climate and/or sustainability targets or requirements (including any contractual emissions limits, emissions disclosures, and other required climate disclosures) into any or all of its subcontracts and relationships with other relevant parties.
10. Provide details of any known or reasonably foreseeable climate risks to Supplier's business or possible legal, financial and commercial impacts of climate change on its business (for example, the impact of extreme weather on its supply chain, the potential for increased operating costs due to climate change, the potential for decreased revenues due to policy, regulatory, technological developments or stakeholder preferences in the economic transition to net zero, or climate-related liability risks). Also provide details of any adaptation or resilience measures to minimize Supplier’s exposure to risk from physical climate risks. How do you keep this up to date?
11. Provide details of any current or proposed climate change laws and regulations in the jurisdictions where Supplier operates that might impact Supplier’s business and its delivery of goods or services to Customer.
12. Does Supplier have a board member or executive committee who is primarily accountable for climate risk measurement, management, and reporting or a non-executive director with experience of improving sustainability and reducing carbon footprints who advises it on these issues? If so, then please detail their expertise, qualifications or access to expert advice in performing this role.
13. Provide details of how Supplier integrates climate change and just transition factors into decision-making, including details of any rewards (financial or otherwise) to executives or key decision makers based on meeting internal or external climate or sustainability-based goals or performance indicators.
Goods or services provision and contracting
14. Details of any climate change-related, sustainability, or social due diligence Supplier will conduct when procuring goods or services for Customer.
15. Details of any environmental obligations Supplier includes in its contracts for the supply of goods or services, including the percentage of contracts in Supplier’s supply chain that contain environmental obligations.
16. Information about resource efficiency in relation to the product(s) to be provided by Supplier including information relating to the product’s expected life, durability, reparability, upgradeability, and the ways in which it can be disposed of at the end of its life, whether the materials used in the products are recyclable, and the materials and techniques used in its manufacture.
17. If Supplier’s business involves the production and/or supply of goods, what, if any, steps have been taken to minimize environmental and related social impacts of the production and supply (for example, to use recycled goods or packaging where possible, to use environmentally friendly production methods, to offset Supplier’s Carbon Footprint, to use local, low GHG emissions materials and labor, to implement circular economy and zero waste principles, to give surplus materials to community projects, to invest in training for low GHG emissions product manufacturing, to help underrepresented groups to access new 'green' job opportunities, and so on).
18. If Supplier uses Forest Risk Commodities at any stage in its operations or supply chain, does Supplier have a due diligence system in place to provide information, assess the potential risk and take steps to mitigate those risks? If so, please provide details.
19. Details of any program under which customers are provided the option to offset the carbon footprint of delivering the Supplier’s goods or services at the point of sale.
20. Details of any activities Supplier undertakes to offset its GHG Emissions, generally and with regard to the delivery of goods or services to Customer. Please detail:
20.1 any Supplier strategy(ies) for offsetting GHG Emissions;
20.2 whether Supplier follows a mitigation hierarchy (in other words, only offsetting emissions of GHG after it has used all reasonable efforts to first reduce them, revising this approach over time as it is able to reduce more emissions);
20.3 any source(s) from which Supplier obtains offset credits, such as voluntary carbon markets, including details regarding any certification or verification of such credits;
20.4 any Supplier plans to transition the underlying offsetting projects to long-lived storage methods which have low risk of reversal over millennia; and
20.5 any Supplier plans to transition to purchasing offsets from projects that remove emissions, rather than avoid or reduce third party emissions.
Supplier’s estate, facilities
21. Does Supplier purchase renewable energy [and/or use web hosts and cloud service providers which run their servers on renewable energy]? If so, please provide details, including the percentage of Supplier's energy needs supplied by renewable energy.
22. Are any of Supplier’s facilities certified to meet the requirements of an accredited green building program (for example, LEED or BREEAM)? If so, please provide details.
23. Copies of the energy performance certificates (EPCs), Energy Star documentation, or other energy efficiency certifications for the Supplier’s facilities.
24. Does Supplier have an environmental management system (EMS) covering waste generation, energy usage, water usage and GHG emissions? If so, please provide details.
Employees and operations
25. Details of any information provided or training given to Supplier’s employees regarding climate change-related issues generally and in so far as they affect its business and the potential delivery of the goods and services to Customer?
26. Details of any 'green' employment benefits, terms, or initiatives offered to Supplier’s employees and their level of utilization.
27. Does Supplier have any policies in place to reduce the environmental footprint caused by travel or commuting? If so, please provide details.
28. What percentage of Supplier’s company-owned or leased vehicle fleet, including company cars, is electric?
29. Are you providing any 'green' solutions, initiatives or services to other customers that Customer may benefit from? Please detail.
Definitions
Carbon Budget means the aggregate of [value] metric tons 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 to compare the global warming potential of various GHGs over a specified timescale.* It allows a Carbon Footprint consisting of different GHGs to be expressed as a single number.
Carbon Footprint means the total annual GHG Emissions relating to the [Supplier]’s business, expressed as a CO2e.**
CDP means the CDP (formerly Carbon Disclosure Project) system of climate change, forests, and water security disclosure questionnaires and related scoring processes.
Control means the possession, directly or indirectly, of the power to direct the management and policies of a person or entity, whether through ownership of voting interests, by contract, or otherwise.
Customer is the party propounding this questionnaire.
Forest Risk Commodity means a commodity that has been produced from a plant, animal or other living organism, where it is considered that forest is being or may be converted to agricultural use for its production. Some examples include beef, cocoa, palm oil, rubber, and soy.
Greenhouse Gasses (GHGs) means the gasses that trap thermal radiation in the Earth’s atmosphere, each expressed as a total in units of CO2e. They are specified by the United Nations Framework Convention on Climate Change (UNFCCC) in Annex A to the Kyoto Protocol and may be updated periodically.***
GHG Emissions means the [Supplier’s] emissions of GHGs, including any emissions classified as scope 1, 2, and 3 Emissions by the GHG Protocol.
GHG Protocol means The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard, Revised Edition 2015 as updated periodically,**** and all related standards and guidance, including but not limited to the Greenhouse Gas Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard.
GRI means the GRI Reporting Standards promulgated by the Global Reporting Initiative.
ISSB means the International Sustainability Standards Board of the IFRS Foundation.
Net Zero Target means a target to reduce and remove GHG Emissions, including by offsetting Residual Emissions, to achieve a balance between the [Supplier’s] sources and sinks of GHGs. This must be achieved by [2050 OR Insert earlier date] and align with [the goals of the Paris Agreement].
Residual Emissions means GHG Emissions that are emitted after all reasonable efforts have been made by the [Supplier] to reduce them.*****
SASB means the Sustainability Standards Accounting Board (now part of IFRS Foundation).
Science Based Target means [Supplier’s] target to reduce its GHG Emissions as validated and published by the Science Based Targets initiative (SBTi).
Single Use Item means a manufactured item which is likely to be used only once, or used only for a short period of time, before being disposed of.
Supplier means the person, company, or entity to whom this Questionnaire is directed, including any parent or other person or entity exercising Control over Supplier.
TCFD means the Task Force on Climate-Related Financial Disclosures.
* See also TCLP Glossary: Carbon Dioxide Equivalent.
** See TCLP Glossary: Carbon Footprint.
*** See TCLP Glossary: Greenhouse Gases (GHGs).
**** [Drafting note: Scope 1, 2 and 3 emissions are defined on page 27 of the GHG Protocol.]
***** See TCLP Glossary: Residual Emissions.
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