Climate and Nature Impact Investing Terms
Model environmental terms and conditions that an impact investor (financing private sector projects) can incorporate and adapt for its specific needs into its standard documents.
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What this clause does
This clause will assist investors (and their financiers and intermediaries) in financing projects with positive environmental impact, in accordance with the Paris Agreement targets and the United Nations Sustainable Development Goals. This will in turn help the country of investment achieve its nationally determined contributions and transition to a low-carbon economy.
Recitals
[Investor’s name] (Investor) and the [investee company name] (Company) (hereinafter the Parties) wish to align the [operation and management of the Company] delivering [project name] (Project) with the Sustainability Goals.
Clauses
[Drafting note: capitalised terms relate to either a defined term in this clause or a defined term in the main agreement that this clause is designed to be inserted into.]
1. Business of the Company
1.1 The Parties will each act in good faith to promote the best interests of the Company and ensure that:
1.1.1 its business is conducted and developed responsibly, sustainably, ethically and in accordance with all applicable laws and good business practice; and
1.1.2 any business plan for the Company that is adopted from time to time is in furtherance of (in equal emphasis):
(a) the Business Purpose; and
(b) the Sustainability Goals.
2. Company Sustainability Goals
2.1 Within [30 (thirty)] Business Days from the date of execution of this Agreement the board of the Company (Board) shall meet and resolve to do all of the following:
2.1.1 appoint an independent environmental advisor with science-based expertise in environmental matters to [advise the Board on and to assist with the delivery of] the Project (Environmental Advisor)* and agree the scope of work to be carried out by the Environmental Advisor (Environmental Advisor Scope of Work) and to
2.1.2 adopt the Company’s Sustainability Goals, including a programme to measure the positive impact of the Project and the progress against the Environmental Targets [in accordance with [indicate any specific performance metrics and/or Environmental KPIs]
2.1.3 adopt a sustainability management framework by reference to [insert specific standard] (the ‘Sustainability Management Standards’) that shall include details of the Transition Plan and set a Net Zero Target Date
2.1.4 appoint a member of the Board to be the Company’s Chief Sustainability Officer (CSO).
Within [14 (fourteen)] Business Days following the date of such meeting the Board shall provide a copy of meeting minutes to the Investor detailing the adopted Sustainability Goals together with a copy of the Company’s Sustainability Management Standards.
*[Drafting note: parties may consider granting the Investor the right to require the replacement of the Environmental Advisor.]
2.2 The impact and effectiveness of the Company’s Sustainability Goals shall be reviewed and evaluated by the Board [and the Environmental Advisor] on a quarterly basis (Sustainability Review Meeting), and such review and evaluation shall include an assessment of the following:
2.2.1 the Company’s progress in achieving its current Sustainability Goals, the Project’s Environmental Targets and Transition Plan;
2.2.2 whether any positive modifications should be made to the current Sustainability Goals, Environmental Targets or Transition Plan (for the avoidance of doubt, modifications that reduce the impact of the Sustainability Goals, Environmental Targets or Transition Plan are not permitted);
2.2.3 whether any positive modifications should be made to the Sustainability Management Standards (for the avoidance of doubt, modifications that reduce the impact of the Sustainability Management Standards are not permitted);
2.2.4 the effect of the current Sustainability Goals on the Company’s Business Purpose;
2.2.5 a measurement of the Project’s Carbon Footprint as at the date of each meeting; and
2.2.6 any additional Sustainability Goals that the Company should adopt.
2.3 The Board shall provide copies of the meeting minutes from all Sustainability Review Meetings and the measurement of the Project’s Carbon Footprint as at the date of each meeting to the Investor within [14 (fourteen)] Business Days of the meeting date and any material changes to the Sustainability Goals shall be proposed to the Investor with such minutes in accordance with clause [2.1].
2.4 The Board shall provide in a timely and accurate manner any further information reasonably requested by the Investor in respect of the Sustainability Goals and the Project’s Environmental Targets including but not limited to both of the following:
2.4.1 any information recommended to be disclosed by a company under the GHG Protocol, provided that such request is made by the Investor within 30 (thirty) Business Days of receipt of the minutes provided under clause [2.3]
2.4.2 any information on matters related to the Investor’s environmental due diligence on the Project.
2.5 Subject to prior approval of the Board and compliance with the Sustainability Management Standards, the Company shall create an Offsetting Strategy. It will review the Offsetting Strategy at least annually and submit the revised version within [30 (thirty)] days of the end of each Financial Year.
2.6 Evidence of the Company’s compliance with clause [2.5] shall be provided to the Investor together with the minutes of the Board’s first Sustainability Review Meeting by the end of each Financial Year.
2.7 The Company shall ensure that any investment or equivalent activity that it makes using [funding] provided by the Investor is on equivalent terms to clauses [1] to [11]).
3. Purpose or use of funds or use of guarantee
3.1 The [Company OR financial intermediary] shall apply all amounts [provided] [borrowed by it] [guaranteed] under this [Agreement] [Facility] [Deed] exclusively to Eligible Transactions.
3.2 The Company shall ensure that the legal documentation for any Eligible Transaction [and any other transaction that the [Company OR financial intermediary] is a party to] shall include equivalent terms to [the Company’s Sustainability Policies OR [these clauses [1] to [11]].
4. Investor’s covenants
4.1 The Investor shall perform comprehensive environmental due diligence with respect to the Project [in accordance with the Due Diligence Questionnaire set forth in Schedule [●]]* and, before proceeding with the disbursement of funds, shall assess whether the information provided by the Company is satisfactory for the achievement of the Sustainability Goals and the Environmental Targets.
*[Drafting note: for more information about the ESG Due Diligence Questionnaire, see TCLP Clause: Gordon’s DDQ.]
4.2 The Investor shall not at any time carry on or be employed, engaged, or interested in any business that does any of the following:
4.2.1 has not publicly set a Net Zero Target Date or has not taken demonstrable steps to achieve Net Zero and sustainability goals similar to the Company's Sustainability Goals.
4.2.2 operates in the following sectors [insert sectors or industries that the Investor does not want to be involved in or that conflict with ESG aims];
4.2.3 does or omits to do anything which could reasonably be expected to cause the Company to not achieve Net Zero, the Sustainability Goals or the Environmental Targets, whether pursuant to this contract or otherwise.
4.3 The Company acknowledges and agrees that its obligations under this Agreement are independent from the Investor’s obligations under this clause [4] and the Company’s obligations under this Agreement shall not be affected in any way by reason of any breach by the Investor of its obligations under this clause [4].
[4.4 The Investor shall at all times comply with the United Nations Principles for Responsible Investment (UNPRI) and this Agreement.]
[4.5 Subject to agreement between the Parties, the Investor shall reasonably provide the Company with non-financial resources, including but not limited to training, capacity building support, and knowledge sharing platforms, to facilitate the Company’s achievements of the Sustainability Goals and the Environmental Targets.]
5. Conditions precedent for first drawdown and representations
5.1 The Company shall have adopted Sustainability Management Standards, Sustainability Goals and Environmental Targets in form and substance satisfactory to the Investor.
5.2 The Company shall have appointed a member of the Board to be the CSO.
5.3 The Company shall have both agreed the Environmental Advisor Scope of Work and appointed an Environmental Advisor.
5.4 [Insert any environmental risk mitigation measures required and not addressed during the Due Diligence phase, for example climate risk insurance.]
5.5 The Company represents and warrants that it is not in breach of any applicable Environmental Law.
6. Conditions precedent for subsequent drawdowns and repeating representations
6.1 The Company continues to have in place Sustainability Management Standards, Sustainability Goals and Environmental Targets in form and substance satisfactory to the Investor.
6.2 The Company continues to have a CSO [and an Environmental Advisor]*.
*[Drafting note: there should be a clear mechanism for replacing the Environmental Advisor. Resignation or dismissal of the latter should not, of itself, be considered as misrepresentation.]
6.3 No Environmental Breach has occurred which:
6.3.1 has not been remedied to the satisfaction of the Investor; or
6.3.2 is not subject to an agreed Corrective Action Plan.
6.4 The Company shall comply with the [Company’s Sustainability Policies] set out in Schedule [●] as amended from time to time; and shall implement such policies, procedures and systems as may be required to monitor compliance with the [Company’s Sustainability Policies] and to prevent liability under any applicable law.
6.5 The Company is in compliance with its climate reporting obligations under clause [2] and clause [8].
6.6 The Company represents and warrants that it is not in breach of any applicable Environmental Law.
7. Inspections
7.1 The Company shall, if deemed necessary by the Investor (acting reasonably), permit representatives of the Investor [or a third party appointed by the Investor], their accountants and their other advisors, at all reasonable times and on reasonable notice, free access to the Project and the Company’s premises, persons, documents and other information.
7.2 Investor’s rights under clause [7.1] may be exercised for the purpose of carrying out monitoring visits or audits and/or investigations into any failure or potential failure by the Company to comply with the Sustainability Management Standards, the Sustainability Goals, the Environmental Targets, or any Corrective Action Plan.
7.3 All costs associated with such visits or investigations under clauses [7.1] and [7.2] shall be borne by the Company, unless (other than in respect of or in connection with any Corrective Action Plan) they do not reveal any material non-compliance by the Company.
7.4 The Company shall:
7.4.1 cooperate in good faith with the representatives of the Investor [or a third party appointed by the Investor], its accountants and its other advisors to assist any such representatives in preparing reports for the Investor on [environmental matters] in connection with the Project
7.4.2 implement the recommendations of such representatives in order to address any non-compliance with [environmental matters] by the Company.
8. Reporting
8.1 The Company commits to supporting the recommendations of the [International Sustainability Standards Board (ISSB) or Task Force on Nature-Related Financial Disclosures (TNFD)] and to include environmental-related disclosures in its financial reporting from [insert date].
8.2 The Company will include an assessment of risks in both the Environmental Monitoring Report, and its business continuity plan, as required by the Investor, including but not limited to:
8.2.1 environmental risk, including:
(a) physical risks associated with climate change and biodiversity loss, and
(b) transition risks associated with the change to a net zero emissions economy (for example, as a result of amendments to NDCs); and
8.2.2 nature-based risks, including:
(a) risks required to be assessed by law, and
(b) risks arising from the application of [the TNFD ‘LEAP’ approach] or [insert other frameworks used by the Investor, for example, the Network for Greening the Financial System].
8.3 The Company’s assessment under clause [8.2] shall also address climate resilience and determine whether the Company and its activities are ‘climate proof’.
8.4 A copy of the Company’s business continuity plan will be updated and provided to the Investor within [30 (thirty)] days of the end of each Financial Year.
8.5 The Company shall, as soon as it is available, but in any event no later than [90 (ninety)] days after the end of each [quarter for Construction Period] or [financial year for Operating Period], deliver to the Investor the Environmental Monitoring Report.
8.6 By the end of each Financial Year the Board shall provide the Investor with details of the Project’s total Carbon Footprint for the Financial Year. This information must also be included in the Directors’ Report for each Financial Year.
9. Ongoing covenants
The Company shall do all of the following:
9.1 continue to have adopted Sustainability Management Standards, Environmental Targets and Sustainability Goals satisfactory to the Investor
9.2 have a CSO and an Environmental Advisor
9.3 [have in place insurance for its material environmental risks (where insurable) at a level acceptable to the Investor and shall have provided a copy of the certificate of insurance to the Investor within [30 (thirty)] days of [insert event]]
9.4 comply with the Company’s Sustainability Policies as amended from time to time; and shall implement such policies, procedures and systems as may be required to monitor compliance with the Company’s Sustainability Policies and to prevent any breach of, or liability under, any applicable law (including, without limitation, any Environmental Breach)
9.5 be in compliance with its reporting obligations under clause [2] and clause [8].
10. Breach
10.1 A breach of any of clauses [1] to [11] or any Environmental Law will be an environmental breach (Environmental Breach) and the following shall apply:
10.1.1 The Company shall notify the Investor of any Environmental Breach (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence.
10.1.2 Upon becoming aware of or suspecting an Environmental Breach, the Investor shall have the right to investigate the breach (or suspected breach) using its own staff or such third parties as it may consider necessary.
10.1.3 Within [30 (thirty)] days of the Investor informing the Company that it considers that an Environmental Breach has (or may have) occurred, the Investor and the Company shall meet to discuss possible remedies for the Environmental Breach.
10.1.4 In respect of any suspected breach, if the investigation by the Investor finds that there has been an Environmental Breach, the costs of such investigation will be borne by the Company.
10.2 Upon the Investor being notified of the occurrence of an Environmental Breach or determining that an Environmental Breach has occurred, in consultation with the Company, it may:
10.2.1 require the Company to produce a Corrective Action Plan, in which case the Company shall, as soon as practicable following such request but in any event within [15 (fifteen)] Business Days of such request, provide a draft Corrective Action Plan for that Environmental Breach to the Investor (for its acceptance);
10.2.2 agree with the Company any other course of action to remedy the Environmental Breach; or
10.2.3 declare that such Environmental Breach is incapable of remedy.
10.3 An Environmental Breach will be deemed incapable of remedy to the extent that the Investor notifies the Company that:
10.3.1 the Environmental Breach is incapable of remedy in accordance with clause 10.2.3 above; or
10.3.2 the draft Corrective Action Plan has not been accepted within [6 (six) months] of the request in accordance with clause [10.2.1] above.
10.4 Following a request by the Investor to provide a draft Corrective Action Plan in accordance with clause [10.2.1] above and pending acceptance by the Investor of any draft Corrective Action Plan, the Company shall take or procure the taking of all such actions and measures to immediately address the adverse impacts of the relevant Environmental Breach, including such actions or measures as are required by any draft Corrective Action Plan in accordance with the timescales set out in that draft Corrective Action Plan.
10.5 If the Investor does not accept the draft Corrective Action Plan pursuant to clause [10.2.1] above:
10.5.1 the Investor shall indicate to the Company the areas in which the draft plan is deficient and the time period within which a revised draft Corrective Action Plan shall be resubmitted to the Investor for its acceptance; and
10.5.2 the Company shall submit a revised draft Corrective Action Plan after consulting with the Investor and taking any views of the Investor fully into account.
10.6 If the Investor does not accept the revised draft Corrective Action Plan submitted by the Company, the Investor and the Company shall repeat the process set out above until such time as either:
10.6.1 a revised draft Corrective Action Plan is accepted by the Investor; or
10.6.2 the Investor declares that the Environmental Breach is incapable of remedy.
10.7 A draft Corrective Action Plan shall be deemed to have been accepted by [the Investor] [30 (thirty)] Business Days after its submission unless the Investor advises the Company otherwise.
10.8 After acceptance of the Corrective Action Plan, the Company shall take or procure the taking of all such actions and measures as are required by the Corrective Action Plan in accordance with the timescales set out therein.
10.9 Every [3 (three) months] from the date on which a Corrective Action Plan is accepted, the Company shall provide the Investor with a report on the implementation of that Corrective Action Plan, and shall provide a final report to the Investor on completion of the Corrective Action Plan. Each report is to be in a form and substance acceptable to the Investor.
10.10 To the extent that an Environmental Breach is not remedied within the timescales set out in the relevant Corrective Action Plan, the Investor may:
10.10.1 require the Company to produce a new Corrective Action Plan or take any other corrective measure in accordance with the procedures set out above; or
10.10.2 declare that the Environmental Breach is incapable of remedy.
[10.11 The Company shall have a defined period (as agreed by the Investor and not to exceed a maximum period of 6 (six) months) in which to remedy the Environmental Breach in the manner agreed by the Investor.]
[10.12 If the Environmental Breach is remedied to the Investor’s satisfaction within the defined time period or the same is waived by the Investor, then the Environmental Breach shall be considered remedied.]
[10.13 If the Environmental Breach is not so remedied or declared to be incapable of remedy, then this shall be an Event of Default]*
*[Drafting note: the Investor shall consider whether an Environmental Breach that cannot be remedied should constitute an Event of Default, and what consequences the latter will trigger, especially if other lenders or investors are involved in the Project. The consequences of an unremedied breach should be assessed on a case-by-case basis, depending on its nature.]
11. Notices
The Company shall:
11.1 use recycled paper and non-solvent based ink when printing a notice;
11.2 if the notice is being delivered by hand, use a courier service which operates zero or ultra-low emission vehicles only; and
11.3 allow notices to be given electronically.
Schedule [●]
Matters requiring the Investor’s consent
Company operations
1. Enter into any contract, transaction or arrangement in relation to the Company and the Project that is likely to impede the achievement of the Sustainability Goals, the Sustainability Management Plan and the Environmental Targets.
2. Make any material change to the Sustainability Goals or the Environmental Targets.
3. Make any change to the Net Zero Target Date.
Definitions
Biomass Emissions means the [estimated] GHG Emissions from changes in soil carbon content, changes in aboveground biomass and/or decay of organic matter resulting from the Project-related activities of the Company.
Business Purpose means the [insert summary of activities of the Company].
Carbon Dioxide Equivalent (CO2e or CO2eq) means the standard metric measure used by the United Nation (UN)’s Intergovernmental Panel on Climate Change (IPCC) to compare the emissions from Greenhouse Gases on the basis of their global warming potential over a specified timescale in order to express a Carbon Footprint that consists of different Greenhouse Gases as a single number.
Carbon Footprint means the amount in tonnes of carbon dioxide and Carbon Dioxide Equivalent of GHG Emissions that will be released into the atmosphere as a result of [the Project] any Eligible Transaction funded by the Company using monies provided by the Investor determined in accordance with the Investor’s carbon footprint methodology and carbon footprint tool.
[Carbon Footprint Standard means an internationally recognised standard for quantifying, monitoring, reporting and validating or verifying GHG Emissions.]
Company’s Sustainability Policies means the [Sustainability Management Standards, Environmental Targets and Sustainability Goals] as amended from time to time.
Contractor Climate Obligations means the contractual obligations that the Company will include in each contract with suppliers and contractors, and will require each supplier and contractor to include in its contracts with any subcontractors, to ensure that the Project and its design are carried out in such a way that:
(a) maximises:
(i) the use of sustainable materials;
(ii) the use of materials which result in lower GHG Emissions throughout the supply chain;
(iii) resilience to the impacts of climate change;
(iv) energy efficiency; and
(v) restoration, regeneration of nature and implementation of nature-based solutions; and
(b) minimises:
(i) GHG Emissions;
(ii) the use of environmentally harmful materials;
(iii) the use of water;
(iv) the generation of waste;
(v) the generation, emission or transmission of pollution (without diminishing any obligation to avoid pollution in particular circumstances);
(vi) degradation of nature, including its biodiversity, and the loss of ecosystem services that flow from it; and
(vii) the misalignment of economic actors with actions aimed at protecting, restoring, and/or reducing negative impacts on nature.
Corrective Action Plan means a plan produced by the Company pursuant to clause 10.2 specifying in detail the corrective action (including the timings and responsibility for such action(s)) being taken, or proposed to be taken, in order to remedy or mitigate all damage and adverse consequences caused by an Environmental Breach, as may be amended or updated from time to time with the consent of the Company.
Eligible Transaction means a transaction that:
(a) is permitted under the [Company] [Investor]’s Sustainability Policies; [and]
(b) [is a Paris Aligned Investment][.][; and]
(c) does not increase the Project’s Scope 1, Scope 2 and Scope 3 Emissions].
Environment means all, or any of, the following media:
(a) the air (including, without limitation, the air within buildings and the air within other natural or man-made structures above or below ground);
(b) water (including, without limitation, territorial, coastal and inland waters, ground and surface water and water in drains and sewers);
(c) land (including, without limitation, surface and subsurface soil);
(d) animals;
(e) plants;
(f) natural habitats; and
(g) human (including workforce and community residents) health, quality of life and legal rights.
Environmental KPI* means a science-based key performance indicator measuring the Project’s Environmental Targets which shall be agreed by the Board and Investor.
*[Drafting note: specific KPIs for biodiversity can include measuring (a) the Living Planet Index (LPI), (b) the Mean Species Abundance (MSA), (c) the Potentially Disappeared Fraction of Species (PDF). For further information on biodiversity metrics visit biodiversity-metrics.org.]
Environmental Law means any legislation, rule, decree, judgement, regulation, directive, by-law, order or any other executive or legislative measure or act having the force of law at the relevant time, including any authorisations required by any of the above, which directly or indirectly relate to the protection of or the prevention of harm or damage to the Environment in respect of (a) the Project or (b) the assets, business and operations of the Company relating to the Project.
Environmental Monitoring Report means a report on:
(a) [the total Scope 1 Emissions, Scope 2 Emissions and, where appropriate, Scope 3 Emissions of associated with the Project as at [insert reporting date];]
(b) [the total Biomass Emissions of the Project as at [insert reporting date];]
(c) [an assessment of the environmental risks that may affect the Project (including physical risks associated with climate change and biodiversity loss, and transition risks associated with the change to a low-carbon economy, for example as a result of amendments to NDCs) and an assessment of whether the Project is resilient to climate change;]
(d) [the Project’s performance against the Environmental Targets and Environmental KPIs;]
(e) [whether the Environmental Targets have been met on the Impact Calculation Date;] and
(f) [nature-related risks in line with the Basel Committee on Banking Supervision for climate-related risks]; and
(g) mandatory information required to be reported on by applicable law.
Environmental Targets* means measurable, time-bound objectives agreed between Investor and Company in relation to the Project which are designed to achieve specific positive environmental outcomes alongside financial returns. Environmental Targets may be inclusive of, but not limited to:
(a) Net Zero goals [validated by the Science Based Targets initiative];
(b) Land reforestation;
(c) Reduce land deforested
(d) Biodiversity footprint;
(e) Reduction in water usage;
(f) Conservation of fresh water bodies;
(g) Species abundance;
(h) Reduce species and habitat loss;
(i) Protected land;
(j) Reduction in air and water pollution;
(k) Reduction in waste production;
(l) Increase in renewable energy production;
(m) Positive effects on key stakeholders (including but not limited to employees, local communities, clients, end customers and supply chain partners);
(n) [Insert other targets as appropriate.]
*[Drafting note: parties may agree on nature-related targets to be validated by the Science Based Targets Network (SBTN). For further information visit sciencebasedtargets.org.]
GHG Protocol means the current GHG Protocol Corporate Accounting and Reporting Standard produced by the World Resources Institute and the World Business Council for Sustainable Development, among others.
Greenhouse Gases (GHG or 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, and which currently include: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulphur hexafluoride (SF6), and nitrogen trifluoride (NF3).
GHG Emissions means emissions of Greenhouse Gases over a specified area and period of time, each expressed as a total in units of carbon dioxide equivalent (CO2e) [and calculated in accordance with the GHG Protocol Corporate Accounting and Reporting Standard or such other equivalent and generally recognised greenhouse gas emission calculation methodology].
Impact Calculation means a determination by the Board as to which Environmental Targets have been met in the delivery of the Project as at the Impact Calculation Date.
Impact Calculation Date means [insert date] of each year.
Nationally Determined Contribution (NDC(s)) means the stated successive intended goals of a country to reduce its national emissions and adapt to the impacts of climate change as required under Article 4, paragraph 2 of the Paris Agreement.
Net Zero means the stage when the Company’s activities within its value chain result in no net accumulation of Greenhouse Gases in the atmosphere, for example when the Company has decarbonised all sources of GHG Emissions. This is achieved by reducing value chain GHG Emissions in line with 1.5C pathways and by balancing the impact of any remaining GHG Emissions with an appropriate amount of carbon removals.
Net Zero Target Date means the date set by the Board to achieve Net Zero, which should be no later than [2050].
Offset Provider means [see TCLP Glossary: Offset Provider].
Offsetting Strategy means [see TCLP Glossary: Offsetting Strategy].
Paris Agreement means the climate change agreement among countries to reduce GHG Emissions to:
(a) limit the global average temperature increase to well below 2C above pre-industrial levels by the year 2100;
(b) pursue efforts to limit the global average temperature rise to 1.5C above pre-industrial levels; and
(c) reach net zero emissions in the second half of this century, as agreed during the 21st Conference of the parties to the UNFCCC in Paris in 2015.
Paris Aligned Investment means an investment that:
(a) is aligned with the mitigation goals set out in articles 2.1 and 4.1 of the Paris Agreement to limit the global average temperature increase and reach net zero emissions, and
(b) does not undermine the implementation of NDCs of signatories to the Paris Agreement.
Project means [insert summary info about project to be financed].
Scope 1 Emissions means all direct emissions from the activities of the Company in delivering the Project or under its control, including on-site fuel combustion and emissions from production in owned or controlled process equipment, company vehicles, [other relevant examples may be added].
Scope 2 Emissions means all indirect emissions from electricity purchased and used by the Company in delivering the Project where the emissions occur at sources owned or controlled by another company [relevant examples may be added].
Scope 3 Emissions means all estimated indirect emissions other than Scope 2 Emissions that are a consequence of the activities of the Company in delivering the Project, but occur from sources not owned or controlled by the Company, including [road users], [waste and water], [other relevant examples may be added].
Sustainability Goals means the Company’s goals and objectives to achieve Net Zero as set by the Board in accordance with clause [2], which shall include:
(a) establishing the Project’s annual Environmental Targets and Environmental KPIs;
(b) conducting a comprehensive environmental risk assessment of the Project and developing an environmental risk management plan to prevent and mitigate such risks;
(c) the Company achieving pre-agreed reductions of its Carbon Footprint measured in accordance with one of the Carbon Footprint Standards;
(d) identify UN SDGs that the Project aims to achieve, including but not limited to UN SDG 13 (Climate Action), applicable targets and indicators (the latter to be developed taking into account locally-provided disaggregated data);
(e) including Contractor Climate Obligations in all [applicable] contracts;
(f) [the purchase by the Company of electricity for its offices [and Project site] on a tariff that uses 100 percent renewable energy; [and]]
(g) [the use by the Company of web hosts and cloud service providers which run their servers on 100 percent renewable energy or have their own Net Zero Target Date;] [; and][.]
(h) [developing and implementing a responsible procurement policy as required by the Investor]
(i) implementing zero waste and circular economy practices and principles in existing operations and design of new products and services;
(j) adopting a travel and expense reimbursement policy that puts environmental protection and restoration at the forefront and has been approved by the CSO;
(k) [creating Environmental KPIs to measure Company’s impact of its operations; and]
(l) [others as applicable].
Transition Plan means a plan which explains how the Company will credibly reduce its GHG Emissions consistent with Paris Agreement Goals by the Net Zero Target Date that:
(a) sets interim reduction targets for the Parties’ GHG Emissions that are aligned with Paris Agreement Goals;
(b) links executive remuneration to achieving the interim targets;
(c) is updated in line with developments in science and technology;
(d) is reviewed and approved annually by the Board; and promotes a just transition to a low-carbon economy.
[Drafting note: for more information about transition plans, see TCLP Guide: Deliver a climate transition plan.]
UN SDGs (United Nations Sustainable Development Goals) means the 17 (seventeen) global goals adopted by all United Nations Member States in 2015, aimed at ending poverty, protecting the planet, and ensuring peace and prosperity for all by 2030. The UN SDGs provide a universal framework for sustainable economic, social, and environmental development.
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