A due diligence questionnaire that asks potential suppliers to provide information regarding a wide range of climate change-related issues going beyond the standard questions.
Why use this?
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 and targets. The DDQ imports climate considerations as a consideration in procurement which is vital for decarbonising supply chains.
How to use this clause
Disclaimer - please read
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Climate Change Due Diligence Questionnaire
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.
[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 in due course.
Responses to this information request are subject to the warranties, guarantees and indemnities in the legal documents relating to the [tender/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.
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 [Drafting note: See also TCLP Glossary: Carbon Dioxide Equivalent]. 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. [Drafting note: See TCLP Glossary: Carbon Footprint.]
Greenhouse Gases (GHGs) means the gases 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. [Drafting note: See TCLP Glossary: Greenhouse Gases (GHGs).]
Greenhouse Gas (GHG) Emissions means the [Supplier’s] 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.]
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/ 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. [Drafting note: See TCLP Glossary: Residual Emissions.]
Science Based Target means [Supplier’s] target to reduce its GHG Emissions as validated and published by the Science Based Targets initiative (SBTi).
Please provide the information and copy documents requested below.
Corporate Policies, Processes and Risk Analysis
1. Details of how climate change issues are considered in the Supplier’s corporate strategy/business plan, including examples of where it has mapped against UN Sustainable Development Goal (SDG) 13 (Climate Action)..
2. Has the Supplier set a Net Zero Target, a Science Based Target or a Carbon Budget? What is the year by which it plans to meet its targets e.g. 2050 or earlier?
3. Does the Supplier assess and disclose climate risks and opportunities in line with the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD)?
4. Is the Supplier signed up to Race to Zero?
5. Copy of the Supplier’s sustainability policy and details of any key performance indicators it has set to measure its success against this policy.
6. Details of all GHG Emissions or Carbon Footprint measurements and reporting by the Supplier as relates to the contract/services/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.
7. 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.
8. Please provide a copy of the Supplier’s climate change risk register. If not maintained, details of any known or reasonably foreseeable climate change risks to its 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). Details of any adaptation or resilience measures to minimise Supplier’s exposure to risk from physical climate risks. How do you keep this up to date?
9. Details of any current or proposed climate change laws and regulations in the jurisdictions that the Supplier operates that might impact upon the Supplier’s business and its delivery of goods or services to the Customer.
10. Does the 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 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?
11. Details of how the Supplier integrates climate change and just transition factors into decision-making?
12. Details of any board decisions taken where climate change and just transition factors were:
a. given a higher weighting than other commercial factor; or
b. disregarded in favour of other commercial factors.
13. Is the Supplier (or a group or parent company) required to report under the streamlined energy and carbon reporting (SECR) requirements in the Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 (SI 2018/1155)? If so please provide copies of the last [●] years of reporting?
Goods/ Services Provision and Contracting
14. Details of any climate change-related, sustainability or social due diligence the Supplier will conduct when procuring goods or services for the Customer.
15. Details of any environmental obligations the Supplier includes in its contracts for the supply of goods or services. What percentage of contracts in the Supplier’s supply chain contain environmental obligations?
16. If the Supplier’s business involves the production and/or supply of goods, what, if any, steps have been taken to minimise environmental and related social impacts of the production and supply (for example, to use recycled goods/ packaging where possible, to use environmentally friendly production methods, to offset the Supplier’s Carbon Footprint, to use local, low GHG emissions materials and labour, 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, etc).
17. If the Supplier’s business is operated online, are customers provided with the option to offset the carbon footprint of delivering the Supplier’s goods or services at the point of sale?
18. Details of any activities the Supplier undertakes to offset its business’ GHG Emissions, particularly with regard to the delivery of goods or services to the Customer. Please detail whether:
a. the Supplier has a strategy for offsetting;
b. the Supplier follows a mitigation hierarchy (i.e. 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);
[c. the Supplier sources its offset credits through a project that has been verified by a recognised voluntary standard or from a United Nations Framework Convention on Climate Change (UNFCCC) clean development mechanism (CDM), with a view to the offsets being additional, permanent and verifiable;
d. the Supplier considers the implications of the offsets purchased on a just transition and wider social and environmental goals;
e. the Supplier has a plan to transition the underlying offsetting projects to long lived storage methods which have low risk of reversal over millennia; and
f. whether the Supplier has a plan to transition to purchasing offsets from projects that remove emissions, rather than avoid or reduce third party emissions.]
Supplier’s Estate, Facilities
19. Does the Supplier purchase utilities on renewable energy tariffs [and/or use web hosts and cloud service providers which run their servers on renewable energy]?
20. Are any of the Supplier’s facilities certified to meet the requirements of an accredited green building programme (e.g. BREEAM)?
21. Copies of the energy performance certificates (EPCs) for the Supplier’s facilities.
22. Does the Supplier have an environmental management system [EMS] covering waste generation, energy usage, water usage and GHG emissions?
23. Details of the steps the Supplier takes to recycle its waste.
24. Does the Supplier send any of its waste to landfill?
25. Details of any single-use plastic products that the Supplier purchases or consumes on a regular basis.
Employees and Operations
26. Details of any information provided or training given to the 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 the Customer?
27. Details of any ‘green’ employment benefits, terms or initiatives offered to the Supplier’s employees and their level of take-up.
28. Does the Supplier have any policies in place to reduce the environmental footprint caused by travel/commuting?
29. What percentage of the Supplier’s fleet, including company car provision, is electric?
30. Details of any current or proposed climate change laws and regulations that might impact upon the Supplier’s ability or the cost to deliver goods and services to the Customer.
31. Are you providing any green solutions, initiatives or services to other customers that the Customer may benefit from? Please detail.
32. 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 environmental impact? If so, please provide details?
33. Details of any [material] contracts which [are not aligned with the Supplier’s sustainability policy disclosed under question 5/ the Supplier considers to be not 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.