Glossary entry

Adverse Climate Outcome (ACO) & Adverse Social Outcome (ASO)

Definitions

Adverse Climate Outcome

Adverse Climate Outcome (ACO) means any outcome directly resulting from the non-performance of an affected obligation, or the enforcement of this clause [FORCE MAJEURE] in relation to that non-performance, which may have an adverse effect on the climate, and includes but is not limited to:

1. reduced Air Quality;
2. an increase in Greenhouse Gas Emissions;
3. dumping of stock that was created using Natural Capital;
4. wasted Embedded Carbon; or
5. [INSERT OTHER ADVERSE EFFECTS].

Adverse Social Outcome

Adverse Social Outcome (ASO) means any outcome directly resulting from the non-performance of an affected obligation, or the enforcement of this clause [FORCE MAJEURE] in relation to that non-performance, which may have an adverse social effect, and includes but is not limited to:

1. the insolvency of a party;
2. redundancies over and above [x];
3. an increase in poverty, deprivation or hunger; or
4. [INSERT OTHER ADVERSE SOCIAL EFFECTS].

Drafting notes

These definitions are based on those in Iris’ Clause.

Application

Commercial agreements, supply chain clauses, public procurement contracts – any clause that is activated when an event increases the climate impacts of a contract, insurance contracts.