Glossary entry

Carbon Dioxide Equivalent (CO2e or CO2eq)

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Definitions

Option 1

Carbon Dioxide Equivalent (CO2e or CO2eq) means the standard metric measure used by [the UN’s Intergovernmental Panel on Climate Change (IPCC)] to compare the emissions from various Greenhouse Gases (GHGs) on the basis of their global warming potential over a specified timescale [in order to express a Carbon Footprint that consists of different GHGs as a single number].

Option 2

Carbon Dioxide Equivalent (CO2e or CO2eq) means a unit of measurement that is used to standardise the climate effects of various Greenhouse Gases.

Drafting notes

The various Greenhouse Gases (GHGs) do not contribute to the greenhouse effect to the same extent and they remain in the atmosphere for different periods of time. In order to make the effects of different GHGs comparable, the Intergovernmental Panel on Climate Change (IPCC) of the United Nations has defined the Global Warming Potential (GWP) for each GHG. This index expresses the warming effect of a certain amount of a GHG over a set period of time (usually 100 years) in comparison to carbon dioxide (CO2). For example, methane’s effect on the climate is 28 times more severe than CO2, but it doesn’t stay in the atmosphere as long.

Drafters should amend party names appropriate to the context. Further, if using the defined term GHG Emissions, remove “Scope 1, 2 and 3 Emissions” and “[expressed as a Carbon Dioxide Equivalent (CO2e)]” both in the definition of GHG Emissions.

Application

Used in the definition of Carbon Footprint, Carbon Budget, Carbon Reporting and Declared Carbon Capacity (of Woodland). Very wide application, being a useful metric. Could be used in any document where you would otherwise refer simply to carbon or GHGs, for example supply chain clauses, national climate laws, project finance documents (e.g. loan, guarantee and recourse agreements, engineering, procurement and construction contracts), policy documents.

Carbon Dioxide Equivalent (CO2e or CO2eq) is used in the following TCLP clauses:

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

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

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

[Cassie’s Clause] Insurance: Disclosure and Mitigation of Pending Climate Change Litigation; 

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

[Emma’s Clause] Green Residential Lease Clauses; 

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

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

[Gordon’s DDQ] Capital Markets ESG Due Diligence Questionnaire;

[Iris’ Clause] Climate Contract Risk Sharing (ex Force Majeure);

[Jessica’s Clause] Carbon Contract Clauses for Environmental Performance, and Associated Incentives and Remedies;

[Rose’s Clause] GHG Emissions Management Plans in Infrastructure and Construction Project Finance;

[Larissa’s Clause] Facility Agreement Clauses Promoting Sustainability-linked Loans within the Cement Industry; 

[Maria’s Scorecard] Supply Chain Emissions Scorecard;

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

[Owen’s Clause] Net Zero Target Supply Chain Cascade Clauses;

[Ragnar’s Clause] Green Company Articles; 

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

[Sasha’s Clause] Net Zero Within Company Whistleblowing Policies; 

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

[Tristan’s Clause] Construction Materials: Procurement; 

[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.