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
This DDQ provides climate-related questions which will enable procurement teams to appraise supplier approaches to climate-related risks and impacts and how well they align with the customerâs own climate strategy and targets.
This is a large menu of suggested DDQ questions which cover the recommended disclosures of the Task Force on Climate-Related Financial Disclosures, the IFRS S2 disclosure framework and other important areas not covered by those regimes. We suggest reviewing the full list and choosing those which are most useful and relevant to the organisation.Â
You may want to consider the following in making your choice:
(i) the level of carbon in the contract and the impact this will have on the Customer's climate targets
(ii) the length of the contract term
(iii) the Supplier's level of maturity in dealing with climate-related matters
(iv) the level of criticality the goods or services supplied by the Supplier are to the Customer
(v) the sector and industry.
Clauses
Climate Change Due Diligence QuestionnaireÂ
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 âperfectâ 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 Customerâs legal advisers.]
This is an initial request for information and we may ask for further information in due course.
Responses to this information request are subject to the warranties, guarantees and indemnities in the legal documents relating to the [tender OR services OR other].
Responding to this questionnaire shall not create the presumption of a legal relationship between the parties including but not limited to any contract.
Questionnaire
Please provide the information and copy documents requested below.
Governance
1. Does the Supplier have a board member or executive committee that 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 you have such a person then please detail their expertise, qualifications or access to expert advice in performing this role with the requisite degree of professionalism, care and diligence?
1.1. Please describe the frequency and processes used to inform the board member, executive committee or non-executive director of climate-related risk and opportunities.Â
1.2 Are any climate-related considerations factored into executive remuneration? And what percentage of executive remuneration is linked to such considerations?
2. Details of how the Supplier integrates climate change and just transition factors into decision-making and operations and details of:
2.1Â how climate risk, GHG Emissions, nature impacts and just transition are reviewed by the board for all major decisions
2.2 the process and the outcome of board decisions where the above factors were disregarded in favour of other commercial factors.
3. Is the Supplier (or a group or parent company) required to report under the streamlined energy and carbon reporting (SECR) requirements in the Companies (Directorsâ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 (SI 2018/1155) or any similar legislations in the jurisdictions it operates? If so please provide copies of the last [â] years of reporting?Â
Strategy and metrics
4. Details of how climate change issues are considered in the Supplierâs corporate strategy or business plan, including examples of where it has mapped against UN Sustainable Development Goal (SDG) 13 (Climate Action).
5. Has the Supplier set a Net Zero Target, a Science-Based Target, a Carbon Budget or Shadow Price of Carbon? What is the year by which it plans to meet its targets, for example, 2050 or earlier?
5.1 Has the Supplier set any interim climate-related quantitative or qualitative targets or milestones? What is the year by which it plans to meet those targets?
5.2 Please provide a copy of your transition plan.
6. Does the Supplier assess and disclose climate risks and opportunities in line with the recommendations of the Task Force on Climate-related Financial Disclosures or IFRS S2?
7. Can the Supplier provide a copy of its sustainability policy and details of any key climate-related performance indicators or metrics it has set to measure its success against this policy.
8. Details of all GHG Emissions or Carbon Footprint measurements (including assumptions) and reporting by the Supplier as relates to the contract or services or goods that are the subject of this procurement, including the standard used for calculation, any benchmarking versus peers and/or industry standards, any independent verification of its GHG Emissions reporting and any reporting, public or otherwise, on GHG Emissions.
9. Details of how the Supplier embeds achievement of its climate and/or sustainability targets into any or all of its subcontracts and relationships with other relevant parties.
10. Details of any green solutions, initiatives or services provided to other customers that the Customer may benefit from.
11. What is the estimated carbon footprint of the subject of this tender and how did you calculate that sum?
Employees
12. Details of any information provided or training given to the Supplierâs 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 the Customer?
13. Details of any âgreenâ employment benefits, terms or initiatives offered to the Supplierâs employees and their level of take-up.
Risk management
14. Provide a copy of the Supplierâs climate change risk appetite statement, policy and/or register. If not maintained, please:Â
14.1 describe the climate-related physical and transition risks and opportunities the organisation has identified over the short, medium and long term to the organisation and to the subject under tender
14.2 summarise any identified material impacts of climate-related physical and transition risks and opportunities on the organisation's business, strategy, and financial planning
14.3 provide a copy of your climate resilience strategy and explain to what extent it has been put into effect.Â
15. Details of any current or proposed climate change laws and regulations in the jurisdictions that the Supplier operates that might impact upon the Supplierâs business and its delivery of goods or services to the Customer.
16. Details of any activities the Supplier undertakes to offset its businessâ GHG Emissions. Please detail whether:
16.1 the Supplier has a strategy for offsetting
16.2 the Supplier follows a mitigation hierarchy (that is, 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)
16.3 the Supplier sources its offset credits through a project that has been verified by a recognised voluntary standard (such as the Voluntary Carbon Markets Integrity Initiative) or from a United Nations Framework Convention on Climate Change (UNFCCC) clean development mechanism, with a view to the offsets being additional, permanent and verifiable
16.4 the Supplier considers the implications of the offsets purchased on a just transition and wider social and environmental goals
16.5 whether the Supplier has a plan to transition to long-lived storage methods or to purchasing offsets from projects that remove emissions, rather than avoid or reduce third party emissions
16.6 whether, if the Supplierâs business is operated online, customers are provided with the option to offset the carbon footprint of delivering the Supplierâs goods or services at the point of sale.
17. Details of any climate change-related or sustainability due diligence the Supplier will conduct when procuring goods or services for the Customer.
18. If the Supplier uses forest risk commodities at any stage in its operations or supply chain, does the Supplier have a due diligence system in place to provide information, assess the potential risk and take steps to mitigate those risks?
19. Details of any GHG Emissions-related obligations the Supplier includes in its contracts for the supply of goods or services. What percentage of contracts in the Supplierâs supply chain contain GHG Emissions-related obligations?Â
Production of goods or services
20. Does the Supplier's business involve the production and/or supply of goods? If so, please provide information about:
20.1 circularity and resource efficiency in relation to the product(s) being supplied
20.2 information relating to: the productâs expected life, durability, reparability, upgradeabilityÂ
20.3 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, including implementing circular economy and zero waste principles and/or providing surplus materials to community or other projects.
20.4 what, if any, steps have been taken to minimise emission impacts of the production and supply (for example, to use recycled goods or packaging where possible, to use lower carbon production methods), to use lower GHG Emissions materials and labourÂ
20.5 to invest in training for low GHG Emissions product manufacturing.
Facilities and operations
21. Does the Supplier have an environmental management system (EMS) covering waste generation and disposal (including recycling), energy usage, water usage and GHG Emissions?
22. Does the Supplier purchase utilities on renewable energy tariffs [and/or use web hosts, and cloud or data service providers which run their servers on renewable energy]?Â
23. What AI products and services does the Supplier use and are these products run on renewable energy?
24. Are any of the Supplierâs facilities certified to meet the requirements of an accredited green building programme (for example, Building Research Establishment Environmental Assessment Methodology BREEAM)?
25. Provide copies of the energy performance certificates (EPCs) or equivalent for the Supplierâs facilities.
Reputation and legacy issues
26. Is the Supplier aware of any business activities (including but not limited to downstream supply chain contracts), practices or outcomes that have produced a substantial negative climate or environmental impact? If so, please provide details.
27. Details of any [material] contracts which [are not aligned with the Supplier's sustainability policy disclosed under question [5] or the Supplier considers to be not climate or environmentally friendly] (or where a more sustainable option was rejected due to other factors, such as economic factors) and any rights of termination or renegotiation for this reason.
Definitions
Carbon Budget means 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 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. [See also TCLP Glossary: Carbon Dioxide Equivalent.]
Carbon Footprint means the total annual GHG Emissions relating to the [Supplier]âs business, expressed as a CO2e. [See TCLP Glossary: Carbon Footprint.]
Forest Risk Commodity means a commodity that has been produced from a plant, animal or other living organism, where it is considered that the forest is being or may be converted to agricultural use for its production. Some examples include: beef cocoa, palm oil, rubber and soy.
Greenhouse Gases (GHGs) means the gases that trap thermal radiation in the Earthâs 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. [See TCLP Glossary: Greenhouse Gases (GHGs).]
GHG Emissions means the [Supplierâs] emissions of GHGs, classified as scope 1, 2 and 3 Emissions by the The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard, Revised Edition 2015 as updated periodically. [Drafting note: Scope 1, 2 and 3 emissions are defined on page 27 of the GHG Protocol.]
IFRS S2 means the Sustainability Disclosure Standard on Climate-related Disclosures of the International Financial Reporting Standards Sustainability Standard Board, initially published on 26 June 2023, as amended from time to time.
Net Zero Target means a target to reduce and remove GHG Emissions, including by offsetting Residual Emissions, to achieve a balance between the [Supplierâs] 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. [See TCLP Glossary: Residual Emissions.]
Science-Based Target means [Supplierâs] target to reduce its GHG Emissions as validated and published by the Science Based Targets initiative (SBTi).
Shadow Price of Carbon means the price of GHG Emissions consistent with a given climate mitigation objective, such as a Net Zero Target.
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.
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