This clause requires you to measure and report your greenhouse gas emissions (from energy use, transport, manufacturing, etc.) to the buyer on a regular schedule. It matters because environmental liability is increasingly a legal and financial risk—buyers face pressure from regulators, investors, and customers to reduce their supply chain emissions, and they're shifting that burden onto suppliers. For example, a UK retailer might require all suppliers to report Scope 1 and Scope 2 emissions annually. The legal principle is that contracts can impose reporting obligations even if there's no law requiring it yet.
Before signing, confirm what "carbon footprint" includes (just your factory, or also shipping and raw materials?) and whether the buyer will help you measure it or leave you to hire a consultant. Negotiate a reasonable deadline for your first report—at least 6 months—and ask if they'll accept estimates if you don't have exact data yet. ---
Frequently Asked Questions
What does this clause mean in simple terms?
This clause requires you to measure and report your greenhouse gas emissions (from energy use, transport, manufacturing, etc.) to the buyer on a regular schedule.
Why should I care about this clause?
It matters because environmental liability is increasingly a legal and financial risk—buyers face pressure from regulators, investors, and customers to reduce their supply chain emissions, and they're shifting that burden onto suppliers.
What are my options?
For example, a UK retailer might require all suppliers to report Scope 1 and Scope 2 emissions annually.
How does this affect small businesses?
The legal principle is that contracts can impose reporting obligations even if there's no law requiring it yet.