Board Minutes: Consideration of Climate Change Factors

Clauses

[Drafting note: capitalised words that are not defined are assumed to be defined elsewhere in the main board minutes.]

Additional resolution

After due and careful consideration of the above matters and each of the documents produced to the meeting, including consideration of:[Drafting note: consider whether  the organisation’s decarbonisation targets, net zero target or other criteria should also be expressly referenced in the list of additional considerations set out below.]

a) the matters referred to in section 172 of the Companies Act 2006;

b) [the environmental and social impact policies and objectives of the Company (as stated in its [accounts for the year ended [●]] OR [sustainability report dated [●]]];

c) the Company’s net zero greenhouse gas emissions, zero-emissions and net-negative emissions targets and the short-, medium- and long-term interim targets towards each (as stated in its strategic plan for the period [●]);

d) the direct and indirect carbon greenhouse gas emissions associated with the transactions under completion at the meeting (including scope 1, 2 and 3 emissions as categorised by [The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard] as updated from time to time);

e) the direct or indirect climate risks associated with the transactions under contemplation at the meeting (including risks related to the transition to a lower-carbon economy and  the physical impacts of climate change);

f) alternatives with a lower carbon footprint and giving rise to less climate risk;

g) measures for reducing, measuring and verifying the greenhouse gas emissions and reducing, mitigating and/or avoiding climate risks;

h) whether the matters or activities under discussion, and the activities and policies of any parties related to those matters or activities (including without limitation their [decarbonisation OR net zero] targets, lobbying activities or trade association memberships), align with [or could potentially undermine] the  objectives of the Paris Agreement and/or the Company’s own climate commitments and targets, and whether any action should be taken to improve such alignment;

i) the impact of the [proposed activities] (including any resourcing choices and the measures taken by the Company to mitigate the associated greenhouse gas emissions and climate risks) on key stakeholders (including but not limited to employees, clients, end customers and supply chain partners) and how these can address a just transition to net zero; and

j) the board’s expertise in making decisions based upon these considerations and whether external advice should be sought from, or the decision or emissions measurements independently verified by, an appropriately qualified climate, sustainability or environmental consultant who has the skills and experience to diligently, competently and professionally advise on improving sustainability and mitigating carbon footprint,

it was resolved:

1. [Drafting note: The above drafting can be used as relevant considerations for the approval of any climate-related actions to be taken by the company, which could include actions to mitigate increased emissions and climate risks associated with transactions, or the adoption of energy efficiency measures to reduce scope 1 emissions, entering into renewable power procurement agreements to address scope 2 emissions, or changing product design to encourage reuse or recycling to address scope 3 emissions. We have also included an example resolution which relates to the purchase of carbon credits to address residual emissions by way of example]

2. to purchase a quantity of carbon credits:

(a) equal to [●] tonnes of CO2 eq, equivalent to the amount of any direct or indirect residual emissions that the Company was not able to reduce or avoid;

(b) from a project that has been verified in accordance with [insert name of voluntary standard] or under the UNFCCC clean development mechanism [or [successor OR equivalent] UNFCCC mechanism];

(c) where the emissions of greenhouse gases avoided, reduced or removed by the project are additional;

(d) that, in relation to greenhouse gas removals, employs long-lived storage methods that have a low risk of reversal over millennia;  

(e) that prioritises the removal of greenhouse gases from the atmosphere rather than avoids or reduces third party emissions of greenhouse gases; and

(f) that takes account of a just transition and addresses wider social and ecological goals;

3. [insert other resolutions].