Glossary entry

Residual Emissions

Definitions

Option 1

Residual Emissions means [a party’s] GHG Emissions [from all operations including its value chain] that are emitted after all reasonable efforts have been made to reduce them.

Option 2

Residual Emissions are any GHG Emissions which remain after a project or organisation has implemented all technically and economically feasible opportunities, as determined by a Climate Professional as part of a Carbon Footprint assessment, to reduce emissions in all scopes and from all sources.

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Drafting notes

Residual emissions are necessary for understanding and calculating a net zero target. Once you have calculated your residual emissions, you can introduce a plan for balancing them out to achieve net zero.

Mitigation hierarchy

An organisation’s residual emissions should be reduced to the greatest extent possible before resorting to offsetting. This is achieved by avoiding, reducing or removing the emissions before resorting to offsetting.

Routine checks

The parties should regularly update and maintain their contractual commitments to emissions trajectories to net zero and estimates of residual emissions.

The appropriate trajectory will depend on the sector[s], level of climate ambition and available investment for the relevant entities. It is likely to result from the advice of a Climate Professional as part of a Carbon Footprint assessment.

Option 1

The words ‘all operations’ and ‘all scopes’ in square brackets refer to Scope 1, 2 and 3 Emissions. If the clause you are writing refers only to one or two of these categories of emissions, you will need to amend the definition accordingly.

Application

Any contract that sets a net zero target including construction contracts, contract manufacturing clauses, corporate climate policies, supply chain agreements and employment contracts.