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The definitions on this website (and published in our Climate Contract Playbook) have been prepared in good faith on a pro bono basis and are free to download and use. The definitions have been drafted and edited by a variety of lawyers and, as such, the approaches to drafting may not conform to any particular drafting norms. We acknowledge this as a consequence of the collaborative drafting process.
The definitions on this website (and published in our Climate Contract Playbook) are provided on an ‘as is’ basis and without any representation or warranty as to accuracy or that the definitions will achieve the relevant climate goal or any other outcome.
This website (and the Climate Contract Playbook) do not comprise, constitute or provide personal, specific or individual recommendations or advice of any kind, and do not contain legal or financial advice. The definitions are precedents for legal professionals to use, amend and negotiate using their professional skill and judgement and at their own risk.
While care has been taken in the drafting of these definitions, neither The Chancery Lane Project nor any of its contributors owe a duty of care to any party in relation to their preparation and do not accept any liability for any errors or omissions, nor for any loss incurred by any person relying on or using these definitions or any other person. Users should use their own professional judgement in the application of these definitions to any particular circumstance or jurisdiction or seek independent legal advice.
At present, all the definitions are based on the laws of England and Wales. We encourage the conversion of these precedent definitions for use in other jurisdictions.
GHG Reporting - Contracts Definition
GHG Reporting shall mean the reporting of the following metrics on a [monthly/ quarterly/ annual basis] in the form of [a written report prepared/ validated by an independent expert] and published in the Company’s [financial disclosures/ annual report/ submitted to the Lender/ Licensor/ Competent Authority]:
- The Company and its Affiliates’ Scope 1, 2 and 3 Greenhouse Gas Emissions, which will be calculated in accordance with [The Greenhouse Gas Protocol – A Corporate Accounting and Reporting Standard/ the Global Reporting Initiative (GRI) Standards (305)];
- The global warming potential values of the Company and its Affiliates’ Greenhouse Gas Emissions measured in tonnes of Carbon Dioxide Equivalent, which will be calculated in accordance with [the IPCC Sixth Assessment Report Global Warming Potential Values];
- A comparison of the Company and its Affiliates’ current emissions data against the base year;
- An intensity metric expressing the Company and its Affiliates’ total Scope 1, 2 and 3 Greenhouse Gas Emissions per [employee/product sold/ sales revenue], which will be calculated in accordance with [The Greenhouse Gas Protocol Scope 3 Guidance Appendix C];
- A description of any energy efficiency measures implemented during the period; and
- A description of the methodologies used to calculate the metrics set out above.
GHG Reporting - Model Laws Definition (Carbon Reporting by Organisation)
GHG Reporting means information on an organisation’s Scope 1, 2 and 3 Greenhouse Gas Emissions in tonnes of Carbon Dioxide Equivalent, to a standard not less than that required by [the UK government’s Streamlined Energy and Carbon Reporting (SECR)].
GHG Reporting - Model Laws Definition (Carbon Reporting at National Level)
GHG Reporting means reporting of national inventories of aggregate anthropogenic Greenhouse Gas Emissions by all sources in tonnes of Carbon Dioxide Equivalent (CO2eq), using the global warming potential values as agreed by decision 24/CP.19 or any subsequent decision of the Conference of the Parties (COP) on global warming potentials, pursuant to Article 12, paragraph 1(a) of the United Nations Framework Convention on Climate Change (UNFCCC).
Drafters should consider defining “independent expert”, “current emissions data” and “base year.”
The information that is reported under this clause could be used to create a database of carbon emissions data that could be used to benchmark companies’ performance.
The definition provides an extensive list of metrics that could be included in any requirement for carbon reporting and guidance on how they should be calculated. The definition refers to guidance rather than legislation to provide flexibility and includes a number of options for how and when the information should be reported. These are designed to illustrate how the definition could be used, but parties should choose the options and metrics that apply for their purposes.
There are a variety of standards that can be used to measure, report and manage an organisation’s GHG emissions. Some of the key standards include:
1. The World Resources Institute (WRI) and WBCSD GHG Protocol Standards: These are globally recognised frameworks to track, measure and manage GHG emissions from private and public sector operations, value chains and mitigation actions. They include the Corporate Accounting and Reporting Standard and the Product Life Cycle Accounting and Reporting Standard.
2. The International Organisation of Standardisation (ISO): The ISO 14000 series of environmental management standards are intended to assist organisations in managing their environmental impact. They include:
- ISO 14001, which allows organisations to demonstrate that their environmental impact is being measured and improved.
- ISO 14064, which allows programmes to measure, quantify and reduce GHG emissions and removals and to achieve carbon neutrality.
- ISO 50001, which is an energy management system to help companies become more energy efficient.
3. BSI PAS 2050:2011: The British Standards Institution (BSI) issued PAS 2050 standard is widely used by businesses to calculate the carbon emissions of goods and services.
4. The Global Reporting Initiative (GRI) Sustainability Reporting Standards: GRI is an international standards body convened by Ceres, a non-profit coalition of investor, environmental, and social justice groups. The Sustainability Reporting Standards are a set of standards for sustainability reporting (including environmental and climate change reporting) to enable corporations to measure and understand their impacts on the environment, society and the economy.
5. The Carbon Footprint Standards: This draws together the leading standards to create a unified standard in assessing, reporting and offsetting emissions to enable businesses to promote their low carbon credentials.
GHG Reporting currently forms a part of companies’ annual reports. It may also be implemented for internal reporting (including through group company structures and supply chains), and/or submissions to certain authorities/ regulatory bodies including as part of the EU Emissions Trading System.
Model Laws Definitions
This definition can be used to draft model laws including those suggested by TCLP.
EU member states may base legislative references to Carbon Reporting on the EU Governance Regulation (Regulation (EU) 2018/1999), which repeals the GHG Monitoring and Reporting Regulation 2013 ((EU) No 525/2013) that imposed monitoring and reporting requirements on the Commission and on member states, in order to meet UNFCCC and Kyoto Protocol requirements.
GHG Reporting Standard
TCLP’s definition of Greenhouse Gas Emissions refers to Scope 1, 2 and 3 Emissions as defined in the GHG Protocol.
The definition includes an option to include reporting where this will be required in addition to measuring and managing GHG emissions. It also includes an option to report on climate forcing emissions as this would cover emissions of black carbon, which is not a gas but still has a warming effect.
Supply chain clauses, Companies Articles of Association, national climate laws, international agreements, investment or project finance documents (e.g. loan, guarantee and recourse agreements, engineering, procurement and construction contracts), franchise & licensing agreements.
Gordon’s DDQ (Capital Markets ESG Due Diligence Questionnaire)
Jessica’s Clause (Carbon Contract Clauses for Environmental Performance, and Associated Incentives and Remedies)
Ming’s Clause (Target Product Carbon Footprint (Schedule for Consumer Goods Contracts))
Owen’s Clause (Net Zero Target Supply Chain Cascade Clauses)