--- title: Integrate climate obligations into contracts date: 2024-02-14T12:56:00Z modified: 2026-03-25T11:04:31Z permalink: "https://chancerylaneproject.org/guides/integrate-climate-obligations-into-contracts/" type: guide status: publish excerpt: Impose legally binding and enforceable obligations to help meet emissions-reduction targets wpid: 2925 climate-or-nature-outcome: - Decarbonisation climate-solution: - Alignment with Paris Agreement - Climate-related education and training - Configuring contracts to prevent increased emissions - Measuring managing and reporting on emissions - Reducing GHG emissions - Setting emissions reduction targets contract-lifecycle-stage: - Contract drafting and negotiation - Contract execution application: - Universal application law-or-regulation: - Paris Agreement legal-concept-activity: - Contract enforcement - Contract obligations - Supply chain management practice-area: - Commercial - Supply chain sector: - Any standard-or-framework: - GHG Protocol - Intergovernmental Panel on Climate Change (IPCC) - Science-based Targets Initiative (SBTI) tclp-principle: - Implement obligations in contracts use-case: - Commercial contract - Supply contract featured_image: "https://chancerylaneproject.org/wp-content/uploads/2024/04/Integrate-climate-obligations-into-contracts.png" --- ## This guide enables organisations to: - ensure that a requirement to set emissions-reduction targets and to develop and report on [transition plans](https://chancerylaneproject.org/glossary/transition-plan/) is integrated into contracts and legal documents - impose legally binding and enforceable climate obligations on contract counterparties that will help to achieve each party’s climate objectives. [ Download this guide as a DOCx file ](#)## Commit counterparties to decarbonisation Use supply contracts to require an organisation’s (Party A) counterparties (each Party B) to implement decarbonisation measures that align with the organisation’s own climate strategy and objectives. Best practice is for counterparties to be required to reflect their climate obligations in their own value chain. This sets emissions-reduction targets as part of all contracts, helping the organisation meet its own targets. #### Example wording \[Party B\] shall do all of the following: - set public emissions-reduction targets \[that are validated by the [Science Based Targets initiative](https://sciencebasedtargets.org/)\] within \[3 (three) months\] of entering into this agreement - develop and immediately implement a [transition plan](https://glossary.chancerylaneproject.org/term/Transition_Plan) within \[6 (six) months\] of entering into this agreement. The transition plan will be: - created with the assistance of and agreed with \[Party A\] - reviewed and updated regularly with \[Party A\] - measure, calculate and report on its [scope 1 and 2 \[and 3\] emissions](https://glossary.chancerylaneproject.org/term/Scope_1,_2_and_3_Emissions) and progress towards achieving emissions-reductions targets publicly \[and annually\] - include a copy of this clause in all of its \[third party contracts OR subcontracts OR supply chain agreements\]. ## Set emissions-reduction targets and reporting standards Use supply contracts to require counterparties to measure, manage and report on their [contract-related emissions](https://glossary.chancerylaneproject.org/term/Greenhouse_Gas_Emissions). Read our guide [Get information on contract emissions.](https://chancerylaneproject.org/guides/get-information-on-contract-emissions/) Organisations should specify the actual level of emissions reductions that counterparties must make under the contract during its term. Ideally, the emissions-reduction targets set out in the contract will: - define the scope of emissions covered by the target. Best practice is to set absolute targets relating to an organisation’s own emissions ([scope 1 and 2](https://glossary.chancerylaneproject.org/term/Scope_1,_2_and_3_Emissions)) and emissions from its value chain ([scope 3](https://glossary.chancerylaneproject.org/term/Scope_1,_2_and_3_Emissions)) include short- (annual) and medium-term (2 to 5 years) interim targets - be validated by the [Science Based Targets initiative](https://sciencebasedtargets.org/) - align with [Paris Agreement goals](https://glossary.chancerylaneproject.org/term/Paris_Agreement_Goals) and latest [Intergovernmental Panel on Climate Change](https://www.ipcc.ch/) findings. #### Example wording \[Party B\] shall reduce the scope \[1 and 2\] \[and 3\] emissions relating to the activities governed by the agreement by \[●\] percent every year. Party B acknowledges that this required reduction: - is required in order to assist \[Party A\] to meet the emissions-reduction targets contained in its transition plan at the date of the contract - is intended to assist with achieving the Paris Agreement goal to limit global temperature increase to 1.5C above pre-industrial levels. ## Require employee decarbonisation training in contracts Use supply contracts to require the organisation’s counterparties to provide decarbonisation training for their employees and contractors. Training should include training relating to the organisation’s decarbonisation strategy and objectives set out in the contract so that the counterparties’ employees know what is expected of them in fulfilling the contract terms. This will help to: - empower individuals to participate and actively engage in the decarbonisation objectives in the contract - enhance climate and carbon literacy along the value chain, helping individuals and organisations make better and more informed decisions - promote a climate-conscious culture that improves the quality of climate-related policies, and supports their implementation. #### Example wording \[Party B\] shall provide \[environmental and sustainability\] training on a regular basis (at least annually) for \[employees and contractors\] during their usual working hours (and online as required). At a minimum, the \[environmental and sustainability\] training will cover all of the following: - the latest climate science, including the projected impacts of global warming of 2C above pre-industrial levels versus 1.5C - climate policy and the relevant legal context, including core terms of the Paris Agreement and any national implementation measures - details of \[Party B\]’s public and contractual commitments, targets and governance in relation to climate and sustainability - the economic and social benefits (for example, health) to \[Party B\] in reducing the environmental impact of the workplace - sustainable lifestyle changes and issues relating to \[Party B\]’s workplace. For example: energy efficiency, digital meetings, food and travel choices, renewable energy and smart waste management. #### **Updates** **December 2025** This guide was updated following a quality assurance review. ## Case studies using the contractual solutions in this guide Case study #### [ Cambridge University Press & Assessment ](https://chancerylaneproject.org/case-studies/cambridge-university-press-assessment/) Requiring alignment of net zero targets through the value chain, supported with emissions reporting and reductions ![Cambridge University](https://chancerylaneproject.org/wp-content/uploads/2023/08/photo-1605470207062-b72b5cbe2a87-640x384.jpg) Case study #### [ Salesforce ](https://chancerylaneproject.org/case-studies/salesforce/) Requiring suppliers to set ambitious science-based emissions reduction targets by 2024 ![Sydney Salesforce Tower Skyline](https://chancerylaneproject.org/wp-content/uploads/2022/01/Sydney-Salesforce-Tower-Skyline-640x384.jpeg) Case study #### [ Vodafone ](https://chancerylaneproject.org/case-studies/vodafone/) Putting climate clauses into supply chain processes and creating low and high emitting supplier templates to accommodate SMEs ![Elton John x Vodafone AR Performance](https://chancerylaneproject.org/wp-content/uploads/2022/01/Elton-John-x-Vodafone-AR-Performance_5_high-res-640x384.jpeg) ## Related guides Guide #### [ Enforce and incentivise decarbonisation through contracts ](https://chancerylaneproject.org/guides/enforce-and-incentivise-decarbonisation-through-contracts/) Negotiate and agree incentives for suppliers to meet contractual climate obligations and set consequences for when they are not met ![](https://chancerylaneproject.org/wp-content/uploads/2024/04/Enforce-and-incentivise-decarbonisation-through-contracts-640x384.png) Guide #### [ Get information on contract emissions ](https://chancerylaneproject.org/guides/get-information-on-contract-emissions/) Gather data on emissions related to contracts to help measure, manage and report on them ![](https://chancerylaneproject.org/wp-content/uploads/2024/04/Get-information-on-contract-emissions-640x384.png) Guide #### [ Measure, manage, reduce and report on emissions ](https://chancerylaneproject.org/guides/measure-manage-reduce-and-report-on-emissions/) Commit to understanding and communicating emissions, and developing a transition plan to reduce them ![](https://chancerylaneproject.org/wp-content/uploads/2024/04/Measure-manage-reduce-and-report-on-emissions-640x384.png) ## Climate clauses using the contractual solutions in this guide Estelle’s Clause #### [ Climate Standard of Care (Construction) ](https://chancerylaneproject.org/clauses/climate-standard-of-care-construction/) Jurisdiction: [England & Wales](https://chancerylaneproject.org/news/jurisdiction/england-wales/) Updated: 6 September 2022 Not maintained Olivia’s Clause #### [ Net Zero Obligations in FIDIC Engineering, Procurement and Construction (EPC) Contracts ](https://chancerylaneproject.org/clauses/net-zero-obligations-in-fidic-engineering-procurement-and-construction-epc-contracts/) Jurisdiction: [England & Wales](https://chancerylaneproject.org/news/jurisdiction/england-wales/) Updated: 10 May 2022 Not maintained Owen’s Clause #### [ Net Zero Target Supply Chain Cascade Clauses ](https://chancerylaneproject.org/clauses/net-zero-target-supply-chain-cascade-clauses/) Jurisdiction: [England & Wales](https://chancerylaneproject.org/news/jurisdiction/england-wales/) Updated: 22 March 2022 Not maintained Matilda’s Annex #### [ The Net Zero Standard for Suppliers ](https://chancerylaneproject.org/clauses/the-net-zero-standard-for-suppliers/) Jurisdiction: [England & Wales](https://chancerylaneproject.org/news/jurisdiction/england-wales/) Updated: 10 November 2021 Not maintained ## Glossary definitions used in this guide Glossary term #### [ Greenhouse Gas Emissions ](https://chancerylaneproject.org/glossary/greenhouse-gas-emissions/) Updated: 8 July 2025 Definitions: 3 Glossary term #### [ Paris Agreement Goals ](https://chancerylaneproject.org/glossary/paris-agreement-goals/) Updated: 19 June 2025 Definitions: 1 Glossary term #### [ Scope 1, 2 and 3 Emissions and Total Emissions ](https://chancerylaneproject.org/glossary/scope-1-2-and-3-emissions-and-total-emissions/) Updated: 18 September 2025 Definitions: 3 Glossary term #### [ Transition Plan ](https://chancerylaneproject.org/glossary/transition-plan/) Updated: 18 September 2025 Definitions: 1 ## Topics **Climate or nature outcomes:** [Decarbonisation](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/climate-or-nature-outcome/decarbonisation.md) **Climate solutions:** [Alignment with Paris Agreement](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/climate-solution/alignment-with-paris-agreement.md), [Climate-related education and training](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/climate-solution/climate-related-education-and-training.md), [Configuring contracts to prevent increased emissions](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/climate-solution/configuring-contracts-to-prevent-increased-emissions.md), [Measuring managing and reporting on emissions](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/climate-solution/measuring-managing-and-reporting-on-emissions.md), [Reducing GHG emissions](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/climate-solution/reducing-ghg-emissions.md), [Setting emissions reduction targets](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/climate-solution/setting-emissions-reduction-targets.md) **Contract lifecycle management stages:** [Contract drafting and negotiation](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/contract-lifecycle-stage/contract-drafting-and-negotiation.md), [Contract execution](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/contract-lifecycle-stage/contract-execution.md) **Guide Applications:** [Universal application](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/application/universal-application.md) **Law or regulations:** [Paris Agreement](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/law-or-regulation/paris-agreement.md) **Legal concept, activity or principles:** [Contract enforcement](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/legal-concept-activity/contract-enforcement.md), [Contract obligations](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/legal-concept-activity/contract-obligations.md), [Supply chain management](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/legal-concept-activity/supply-chain-management.md) **Practice Areas:** [Commercial](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/practice-area/commercial.md), [Supply chain](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/practice-area/supply-chain.md) **Sectors:** [Any](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/sector/any.md) **Standard or frameworks:** [GHG Protocol](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/standard-or-framework/ghg-protocol.md), [Intergovernmental Panel on Climate Change (IPCC)](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/standard-or-framework/intergovernmental-panel-on-climate-change-ipcc.md), [Science-based Targets Initiative (SBTI)](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/standard-or-framework/science-based-targets-initiative-sbti.md) **TCLP principles:** [Implement obligations in contracts](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/tclp-principle/implement-obligations-in-contracts.md) **Use cases:** [Commercial contract](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/use-case/commercial-contract.md), [Supply contract](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/use-case/supply-contract.md)