Glossary entry

Carbon Footprint

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Definitions

Carbon Footprint

Option 1

Carbon Footprint means the total annual [GHG Emissions]/ [Scope 1, 2 and 3 Emissions] relating to the [product] [event] [individual] [Company’s] [party’s] business[, expressed as a Carbon Dioxide Equivalent (CO2e).]

Option 2

Carbon Footprint means the amount in tonnes of Carbon Dioxide Equivalent of Scope 1, 2 and 3 Greenhouse Gas Emissions that will be released into the atmosphere as a result of the [manufacture/supply/use] of [the Product/Service/Business Operation/Project], determined in accordance [with international Carbon Reporting practice, being the accepted practice from time to time in relation to reporting for the purposes of the protocols to the United Nations Framework Convention on Climate Change] [with an internationally recognised environmental standard] [with the [organisation’s] carbon footprint methodology and/or carbon footprint tool / standard].

Organisational Carbon Footprint

Organisational Carbon Footprint means total annual [worldwide] Scope 1, 2 and 3 Greenhouse Gas Emissions originating from all the activities, including energy used in buildings, industrial processes and business travel, across the organisation, including its supply and value chains.

Product Carbon Footprint

Product Carbon Footprint means the total Scope 1, 2 and 3 Greenhouse Gas Emissions over the whole life of the [product/  service], from the extraction of raw materials and manufacturing through to its use and final re-use, recycling or disposal, including Greenhouse Gas Emissions associated with the raw materials and services purchased by the Supplier in order to deliver the [product/service].

Supply Chain Carbon Footprint

Supply Chain Carbon Footprint means total annual Scope 1, 2 and 3 Greenhouse Gas Emissions  associated with the purchase of raw materials and services by [insert organisation name] in order to deliver its service[s] [[and/or] product[s]].

Drafting notes

Carbon Footprint

  • The term ‘Carbon Footprint’ is often used as an umbrella term for more specific carbon emission measurements, such as Organisational Carbon Footprint, Supply Chain Carbon Footprint, and Product Carbon Footprint. Therefore, the common use of ‘carbon footprint’ often means these more specific terms are obscured or conflated. 
  • An overall Carbon Footprint accounts for all of the Greenhouse Gases mentioned in the Kyoto Protocol (see the definition of Greenhouse Gases (GHGs)).

Supply Chain Carbon Footprint

  • It would be appropriate to use this more specific definition of Carbon Footprint in supply chain contracts that seek to reduce carbon emissions at each stage of a manufacturing process.

Product Carbon Footprint

  • This product-specific definition of Carbon Footprint may be favoured by larger companies when assessing the overall environmental impact of their products (goods and / or services) and meeting CSR obligations.
  • Product Carbon Footprint is sometimes abbreviated to ‘PCF’.
  • The Product Carbon Footprint sums up the total Greenhouse Gas emissions generated by a product over the different stages of its life cycle, ‘from cradle to grave’ (see the definition of Embodied Carbon (Embedded Carbon)).

Application

Company articles, shareholder agreements, employment contracts, consumer laws, supply chain clauses, loan agreements and government guidance.

Such clauses related to carbon footprint can drive change from the ‘bottom up’ as contracting parties will need to be proactive in meeting a reduction in their carbon footprints.

Carbon Footprint is used in the following TCLP clauses:

[Alex’s Clause] Circular Economy Product Design Obligation; 

[Annie’s Clause] Green Termination Provision (Short Form);

[Caesar’s Clause] Greener and More Efficient HGVs in Road and Multimodal Transport Agreements;

[Callum & Theo’s Clause] Climate Standard Transaction Terms; 

[Dottie’s Clause] Climate Purchase Agreement and Underwriting Sponsor Warranties; 

[Elliot’s Handbook] Net Zero Culture Employment Handbook; 

[Felix’s Clause] Net Zero Completion Adjustment Clause;

[Lewi’s Clause] Green Film Production Credits;

[Luke’s Clause] The ‘Green Supplier’ Contract – A Standardised Contractual Pricing Model;

[Luna’s Clause] Net Zero Aligned Construction Modifications;  

[Ming’s Clause] Target Product Carbon Footprint (Schedule for Consumer Goods Contracts);

[Ragnar’s Clause] Green Company Articles; 

[Raphael’s Procurement DDQ] Climate Change Due Diligence Questionnaire for Suppliers; 

[Scarlett’s Performance Conditions] Environmental, Social and Governance (ESG) Based Performance Conditions for Employee Incentive Awards;

[Sebastian’s Clause] Entire Business Net Zero Objectives; 

[Teddy’s Clause] Supplier Environmental Threshold Obligations; 

[Zack’s Clause] SPA/ Investment Agreement: Disclosure of Climate Change Plans; and 

[Zain’s Clause] Carbon Footprint Reduction – Mutual Notification Right (Carbon Footprint Reduction Notice)Mutual Sustainability Rights; and 

[Zoë and Bea’s Clause] Green Supplier Agreement Terms.