Updated Principles

I. DEFINITIONS

1. In the Principles, except in so far as the context or subject matter otherwise indicates:

Above Permissible Quantum country refers to a country that, at the beginning of a base year, has GHG emissions that exceed its permissible quantum under Principle 2.2.1 (b) if the country would continue to emit unabated quantities of GHGs.

Activity refers to all relevant energy consumption.

Base period refers to the base year and the subsequent four years.

Base year refers to the year that counts as the reference point for the determination of the enterprise’s reduction obligations in the relevant base period.

Below Permissible Quantum country refers to a country that, at the beginning of a base year, has GHG emissions that are less than its permissible quantum under Principle 2.2.1 (b) if the country would continue to emit unabated quantities of GHGs.

Board refers to the group of executive and non-executive directors of an enterprise responsible for controlling and organising the enterprise.

CO2 equivalent refers to the global warming potential values relative to CO2 as mentioned in the Greenhouse Gas Protocol, Global Warming Potential Values, https://www.ghgprotocol.org/sites/default/files/ghgp/Global-Warming-Potential-Values%20%28Feb%2016%202016%29_1.pdf.

Countervailing measure refers to a measure to be taken to fully offset non-compliance with a relevant Principle.

Emissions refers to the release of anthropogenic greenhouse gases.

Enterprise refers to

(a) a business, company, firm, venture, organisation, operation or undertaking that is private, unless it can be shown that it does not carry out commercial or industrial activities, or

(b) any non-private entity when and to the extent that it carries out commercial or industrial activities.

GHG (Greenhouse gases) refers to gaseous constituents of the atmosphere that absorb and re-emit infrared radiation.

Global Carbon budget refers to the GHGs that can still globally be emitted. In calculating the carbon budget both anthropogenic and non-anthropogenic GHGs must be taken into account. The calculation is to be based on the precautionary principle to ensure that global average surface temperature does not exceed pre-industrial temperature by more than 1.75 degrees Celsius.

Global enterprise refers to an enterprise or a group of enterprises that belongs to the most recent Forbes Global 2000 ranking of public companies before a new base period, or manufactures products or offers services that are, for a significant part, consumed in multiple Above Permissible Quantum countries.

An enterprise in a Below Permissible Quantum country is not a global enterprise if the parent company is based in a Below Permissible Quantum country and if the turnover of the group of enterprises was less than US$ one billion annually over the past five years, or if the group of enterprises is exclusively or predominantly active in Below Permissible Quantum countries.

Group of enterprises refers to the parent company and its direct and indirect subsidiaries.

Investor referstomajor investors, such as pension and hedge funds, charities, and investment funds.

Least developed country refers to any country that qualifies as least developed, as defined and classified by the United Nations Committee on Development Policy.

Nationally Determined Contributions refers to the reductions to be achieved by a country on the basis of art. 4.2 of the Paris Agreement. The Nationally Determined Contribution, in CO2-equivalents, has to be (re)calculated as a percentage related to the relevant base period.

Oslo Principles refers to the Oslo Principles on Global Climate Obligations, drafted by the Expert Group on Global Climate Obligations, adopted on 1 March 2015.

Paris Agreement refers to the agreement done at the 21^st meeting of the Conference of the Parties under the United Nations Framework Convention on Climate Change on 12 December 2015, FCCC/CP/2015/L.9/Rev.1, including any further elaboration or amendment of this agreement, or any subsequent international agreement, treaty or convention superseding this agreement.

Permissible Quantum per base period refers to the quantities of GHGs a country is allowed to emit under Principle 2.2.1 (b).

Primary reduction obligation refers to the reduction obligation under Principle 2.1.1, or Principle 5.1 as the case may be.

Reduction percentage that the world at large would have to achieve in a relevant base period refers to the reduction percentage consistent with a glidepath of steady reductions towards net zero emissions without exceeding the global carbon budget.

Relevant country refers to the country in which the enterprise undertakes its activities.

II. ENTERPRISES’ GHG REDUCTION OBLIGATIONS

Percentage GHG reduction to country’s permissible quantum

2.1.1 An enterprise must reduce its GHG emissions, expressed in CO2-equivalents, in a relevant country by the percentage required under the Oslo Principles, as amended in Principle 2.2.1.

2.1.2 If an enterprise has reduced its GHG emissions in a given base period by a higher percentage than required under these Principles, while there are no remaining reductions not achieved in previous base periods, any remaining surplus can be deducted from reductions required in subsequent base periods.

2.1.3 If an enterprise has reduced its GHG emissions in a given base period by a significantly higher percentage than required under these Principles, while there are no remaining emission reductions not achieved in previous base periods, 4% can be added to the surplus mentioned in Principle 2.1.2.

2.1.4 If an enterprise or a global enterprise has taken countervailing measures to achieve significantly higher reductions of GHG emissions than its own obligations under Principle 2.1.1, or Principle 5.1 if the enterprise is a global enterprise, or has provided States or other enterprises with the financial or technical means to achieve significantly higher reductions of GHG emissions than its own obligations under Principle 2.1.1, or Principe 5.1, the enterprise does not have to comply with Principle 2.1.1, or Principle 5.1 if it is beyond any doubt that the countervailing measures or given means have achieved the intended purpose and double counting is avoided.

2.2.1 For the purpose of these Principles the primary reduction obligation of States under the Oslo Principles, expressed in a percentage, is to be defined as follows:

(a) in calculating the global carbon budget per capita both anthropogenic and non-anthropogenic GHGs must be taken into account. The calculation is to be based on the precautionary principle to ensure that global average surface temperature does not exceed pre-industrial temperature by more than 1.75 degrees Celsius;

(b) the permissible quantum per base period is the annual global budget per capita over the first five years of a glidepath of steady reductions towards net zero emissions without exceeding the global carbon budget;

(c) Below Permissible Quantum countries are required to reduce their emissions per base period at the rate of their Nationally Determined Contributions;

(d) every Above Permissible Quantum country has to reduce its per capita GHG emissions within its jurisdiction per base period to the higher of:

i. the extent to which they exceed the per capita emissions resulting from the calculation under (b), after deduction of the sum of GHG emissions to be curbed on the basis of the Nationally Determined Contributions of all Below Permissible Quantum countries, divided by the population of all Above Permissible Quantum countries together, or

ii. the country’s Nationally Determined Contributions for the relevant base period;

(e) both the country’s GHG emissions and its required reductions are to be expressed in CO2-equivalents;

(f) the country should take reasonable steps to ensure that, in the course of the relevant base period, the reductions are 1/5 of the figure resulting from Principle 2.2.1 (c) or (d) per annum;

(g) the global carbon budget and the permissible quantum mentioned under (b) and the amount and percentage to be reduced are to be recalculated each base year.

2.2.2 In addition to their Nationally Determined Contributions, countries must take reasonable steps to avoid unnecessarily inefficient or excessively emitting new activities, or expansion of unnecessarily inefficient or excessively emitting existing activities within their territories. The reasonableness, necessity, inefficiency and excessiveness are to be determined in light of all relevant circumstances.

Flexibility in allocating reduction obligations

3.1 A country complying with the higher of its reduction obligations under the Oslo Principles, as amended by Principle 2.2.1 (d), oritsNationally Determined Contribution over the previous base period, may determine the reduction obligations for the subsequent base period of any enterprise within its jurisdiction to be different from the reduction obligations under Principle 2.1.1. In doing so, the country must consider the following factors:

(a) recent reductions achieved by the enterprise and their significance compared to the reductions of its competitors and the industry as a whole;

(b) the GHG efficiency of the enterprise and its significance compared to the GHG efficiency of the enterprise’s competitors and the industry as a whole;

(c) the GHG efficiency of the enterprise’s products or services and their significance compared to that of its competitors and the industry as a whole;

(d) the extent to which the enterprise is taking measures to increase its GHG reductions, improve its GHG efficiency, or improve the GHG efficiency of its products and services during the period for which the enterprise would have obligations different from the obligations under Principle 2.1.1;

(e) the extent to which the enterprise’s products or services contribute to (the development towards) a low-carbon society;

(f) whether the enterprise provides goods or services that are vital and, in the short term, cannot be substituted in the relevant country, even if the production or use of those goods and services is GHG inefficient or emits significant amounts of GHGs, and whether the country is taking effective measures to reduce its dependence on such goods and services;

(g) whether the enterprise avoids its obligations under these Principles to reduce GHG emissions by outsourcing a not insignificant part of its manufacturing process or other activities to enterprises in another country that is a Below Permissible Quantum country, and

(h) whether the enterprise discontinues outsourcing a not insignificant part of its manufacturing process or other activities to enterprises in another country that is a Below Permissible Quantum country.

3.2 If a country determines, under Principle 3.1, the reduction obligations of an enterprise to be different from the reduction obligations under Principle 2.1.1, the relevant enterprise must nevertheless comply with the obligations under Principles 6 to 14.

3.3.1 If a country does not make use of Principle 3.1 at all, an enterprise can self-determine its reduction obligation to be different from the reduction obligation under Principle 2.1.1 to the extent it is beyond reasonable doubt that it has achieved, or at the end of the relevant base period will have achieved, reductions of GHG emissions at such a rate that a stringent application of Principle 3.1 would justify that the enterprise does not have an additional reduction obligation over the self-determined obligation for the relevant base period.

3.3.2 If an enterprise determines its reduction obligation on the basis of Principle 3.3.1, it has to comply with the self-determined obligation.

3.3.3 If an enterprise has invoked Principle 3.3.1, but did not comply with the reductions based on the stringent application of Principle 3.1 it cannot invoke Principle 3.3.1 for future base periods and has to add the non-fulfilled reductions along with 8% over the non-fulfilled reductions to the next base period.

4.1 If a country did not comply with the higher of its reduction obligations under the Oslo Principles, as amended by Principle 2.2.1 (d), or its Nationally Determined Contribution over the previous base period, it may determine the reduction obligations of any enterprise within its jurisdiction to be different from the reduction obligation under Principle 2.1.1 only if:

(a) there is compelling reason to do so in the particular circumstances of the enterprise for the relevant base period;

(b) the aggregate reductions of GHGs of all enterprises in the country amount to a reduction of at least the same amount of GHG emissions as is required for all enterprises together in the country, and

4.2.1 If the condition of Principle 4.1 (b) is not fulfilled, a country may determine the reduction obligations of any enterprise within its jurisdiction to be different from the reduction obligation under Principle 2.1.1 only if not doing so would be manifestly unreasonable.

4.2.2 If a country aims to apply Principle 4.2.1 it must consider the factors in Principle 3.1 and the adverse impact on global climate change.

4.2.3 If a country determines, under Principle 4.1, the reduction obligations of enterprises to be different from the reduction obligations under Principle 2.1.1, the relevant enterprise must nevertheless comply with the obligations under Principles 6 to 14.

4.3.1 If a country does not use Principle 4.1 at all, an enterprise does not have to comply with Principle 2.1.1 to the extent that it would be manifestly unreasonable to require further reductions during the relevant base period. If an enterprise aims to invoke this Principle, the factors enumerated under Principle 3.1 and Principle 4.1 (a) and (b) and the adverse impact on global climate change must be taken into account.

4.3.2 If an enterprise determines its reduction obligations on the basis of Principle 4.3.1 it has to comply with the self-determined obligation.

4.3.3 If an enterprise has invoked Principle 4.3.1, but did not comply with the reductions based on Principle 4.3.1 it cannot invoke Principle 4.3.1 for future base periods and has to add the non-fulfilled reductions along with 8% over the non-fulfilled reductions to the next base period.

Global enterprises’ GHG reduction obligations

5.1 An enterprise being or belonging to a global enterprise must reduce its GHG emissions per base period:

(a) by the higher of the reduction percentage that the world at large had to achieve in the preceding base period or the reductions that must be achieved in accordance with Principle 2.1.1 for the activities of the global enterprise in all of the relevant Above Permissible Quantum countries, adjusted in accordance with Principle 3.1, Principle 3.3, Principle 4.1 or Principle 4.3;

(b) by the higher of the reduction percentage that the world at large had to achieve in the preceding base period or the NDC of the relevant country for the activities of the global enterprise in all of the relevant Below Permissible Quantum countries.

5.2 The parent company may reallocate the reductions to be achieved by enterprises belonging to its group of companies, provided that:

(a) the reductions allocated to the designated companies will be achieved in the relevant period;

(b) the reallocation is based on a legally binding agreement between the parent company and the designated enterprises;

(d) all reasonable steps to avoid double counting are taken.

Obligations of controlling enterprise

6. An enterprise must ensure that any enterprise that is within its direct or indirect control complies with its obligations to reduce its GHG emissions and fulfil its other obligations emanating from these Principles.

Taking GHG reduction measures where no relevant additional cost

7.1 An enterprise must take all measures to reduce the GHG emissions from its activities performed in the relevant country as can be taken without incurring relevant additional cost. Examples include:

(a) switching off energy-consuming equipment when not in use, such as lighting;

(b) eliminating excessive energy consumption where possible, including for heating, or cooling;

(d) promoting, to the maximum extent possible, measures that will reduce the need for consuming energy, such as improved insulation of buildings and improved efficiency of energy-consuming devices, and

(e) switching from fossil fuel-based energy sources to renewable energy sources.

7.2 An enterprise must take all measures to improve the energy efficiency of its products and services as can be taken without incurring relevant additional cost. Examples include:

(a) reducing the energy consumption of a car by using lighter materials;

(b) avoiding unnecessary energy consumption of devices by installing an automatic switch-off function, and

Taking GHG reduction measures where offset financially

8. An enterprise must take measures to reduce its GHG emissions from its activities performed in the relevant country that incur additional costs if the costs will, beyond reasonable doubt, be offset by future financial savings or financial gains within a reasonable time period.

Avoiding activities, products or services causing excessive GHG emissions

Activities

9.1 An enterprise must not carry out activities that will or are likely to cause excessive GHG emissions, including, for example, operating coal-fired power plants, without taking countervailing measures in line with Principles 9.4 to 9.6 to offset the excessive GHG emissions.

9.2 In relation to a new activity, an enterprise must achieve and maintain best practice.

9.3 GHG emissions caused by activities will not be considered excessive if the excessive emissions from putting the relevant products on the market are counter-balanced by lower emissions caused by the use of the products.

9.4 If the relevant products resulting from the activities mentioned in Principle 9.1 can be shown to be indispensable in light of prevailing circumstances the activity’s excessive emissions must be reduced, or countervailing measures to offset the excessive emissions must be taken to the extent reasonable in light of the higher of the financial capacity of the enterprise or the group of companies to which it belongs.

9.5 If the relevant products resulting from the activities mentioned in Principle 9.1 can be shown to be non-luxury and not indispensable products the enterprise must take reasonable action to reduce the activity’s excessive emissions or take reasonable countervailing measures to offset the excessive emissions at the highest rate reasonably possible in light of the higher of the financial capacity of the enterprise or the group of companies to which it belongs.

9.6 If the relevant products resulting from the activities mentioned in Principle 9.1 are luxury products, the activity’s excessive emissions must be fully reduced so as not to be excessive, or countervailing measures must be taken to offset the excessive emissions.

Products and services

10.1 An enterprise must not make available products, including packaging, that cause excessive GHG emissions, or render services that cause excessive GHG emissions, without taking countervailing measures in line with Principles 10.2 to10.4 to offset the excessive GHG emissions.

10.2 If the relevant products and services mentioned in Principle 10.1 can be shown to be indispensable in light of the prevailing circumstances, the excessive emissions must be reduced, or countervailing measures to offset the excessive emissions must be taken to the extent reasonable in light of the higher of the financial capacity of the enterprise or the group of companies to which it belongs.

10.3 If the relevant products and services mentioned in Principle 10.1 can be shown to be non-luxury and not indispensable products or services, the enterprise must take reasonable measures to reduce the excessive emissions or take reasonable countervailing measures to offset the excessive emissions at the highest rate reasonably possible in light of the higher of the financial capacity of the enterprise or the group of companies to which it belongs.

10.4 If the relevant products and services mentioned in Principle 10.1 can be shown to be luxury products or services, the excessive emissions must fully be reduced so as not to be excessive, or countervailing measures have be taken to offset the excessive emissions.

Emissions deemed excessive

11. For the purpose of Principle 9 and Principle 10 emissions will also be deemed excessive if and to the extent:

(a) the cost of taking the relevant measures could reasonably be offset by increasing the price of the products or services; or

(b) the profits generated by the relevant activity, products or services easily allow for taking the measures.

12. For the purpose of Principles 9.6 and 10.4 emissions from consumed electricity generated by excessively emitting fossil fuels will have to be offset if and to the extent:

(a) the emissions are not offset by the electricity supplier;

(b) the cost of taking the relevant measures could reasonably be offset by increasing the price of the products or services; or

The reduction obligations cannot be fulfilled

13.1If and to the extent that an enterprise or a global enterprise has taken all steps reasonably available but nevertheless has failed to fulfil the obligations under Principle 2.1.1, as adjusted in accordance with Principle 3.1, Principle 3.3, Principle 4.1, or Principle 4.3 or the obligations under Principle 5.1, that enterprise must take sufficient countervailing measures to offset the amount of GHG emissions that the enterprise has failed to reduce under its obligations or provide financial or technical means to a country or another enterprise to enable reduction of at least that amount of GHG emissions.

13.2 The receiving country or enterprise must use these means for GHG-reduction purposes.

13.3 Reductions achieved through such financial or technical means shall count as reductions of the enterprise that has provided the financial or technical means and not as reductions of the receiving country or enterprise.

13.4 To avoid double counting, the enterprise that has provided financial means, and the receiving enterprise must enter into a legally binding agreement to the effect that the reductions of the enterprise that has provided the financial or technical means, count as emissions achieved by the providing enterprise. That agreement shall be made available upon request to accounting institutions and others, not being competitors, that have sufficient interest in receiving the information.

13.5 On the request of the enterprise that has provided financial or technical means, the receiving country or enterprise must provide information to allow the providing enterprise to prove that the means were used to achieve the intended purpose and that double counting is avoided.

Transition period to achieve GHG reductions

14.1 If and to the extent that an enterprise can meet neither its obligations to reduce GHG emissions under Principle 2.1.1, adjusted in accordance with Principle 3.1, Principle 3.3, Principle 4.1, or Principle 4.3, or its obligations under Principle 5.1 in the short term, nor the alternative obligation under Principle 13.1, because it would be unreasonably burdensome, the enterprise may have a transition period in which to meet its obligations, provided that:

(a) the enterprise complies with its obligations under Principles 6 to 10;

(b) the enterprise proceeds as expeditiously as possible to comply with Principle 2.1.1, adjusted in accordance with Principle 3.1, Principle 3.3, Principle 4.1, Principle 4.3, or with Principle 5.1;

(c) the enterprise adds the reductions that could not be achieved in each base period during the transition period to the reductions that otherwise would be required in the subsequent base periods, and

(d) the enterprise adds 8% to the reduction required under (c) to offset the climate change and other consequences of not having met the GHG-emission reduction required under Principle 2.1.1, adjusted in accordance with Principle 3.1, Principle 3.3, Principle 4.1, or Principle 4.3, or its obligations under Principle 5.1, per base period in which it does not comply with its GHG-emission reduction obligations.

14.2 Principle 14.1 can only be invoked if the enterprise is sufficiently likely to achieve its obligations under Principle 2.1.1, adjusted in accordance with Principle 3.1, Principle 3.3, Principle 4.1, or Principle 4.3 as the case may be, or its obligations under Principle 5.1, as expeditiously as possible from the time Principle 14.1 was invoked.

Obligations to reduce GHG emissions apply even if minimal

15. An enterprise is not relieved of its obligations under these Principles to reduce its GHG emissions from its activities performed in the relevant country even if its contributions to the global GHG emissions are minimal.

Obligations to comply with Principles apply even if less stringent domestic laws

16. An enterprise must comply with the obligations under these Principles even if relevant national laws or international agreements would require less.

Exemption in case of exceptional circumstances

17. An enterprise is exempted from its reduction obligations under Principles 2.1.1 and 3 to 10 if and to the extent that its non-compliance is the direct result of exceptional circumstances beyond the enterprise’s control, such as a natural disaster, unless it can reasonably be expected to achieve the required reductions in full or in part.

III. CONSIDERATION OF SUPPLIERS’ GHG EMISSIONS

18.1 An enterprise must, to the extent that is reasonable and feasible possible, ascertain and take into account the compliance of any supplier to the enterprise with these Principles when selecting its suppliers.

18.2 The selection of a supplier that provides energy from coal fired power plants, or other excessively GHG emitting fossil fuels, or manufactures goods by means of energy from coal fired power plants or other excessively GHG emitting fossil fuels requires a compelling justification. If the supplier is based in a least developed country a justification is required.

18.3 When selecting a supplier an enterprise must ascertain and take into account the emissions of transporting the relevant goods and services.

18.4 The selection of a supplier of goods manufactured in or services provided from a country that significantly falls short of meeting its key reduction obligation mentioned in the Oslo Principles as amended by Principle 2.2 above requires a justification.

18.5 The selection of a supplier of goods with its head office in a country that significantly falls short of meeting its key reduction obligation mentioned in the Oslo Principles, as amended by Principle 2.2 above, requires a justification.

18.6 The selection of suppliers engaged in lobbying for measures irreconcilable with the imperative of keeping the increase in global average surface temperature below 1.75 degrees Celsius compared to pre-industrial levels, requires a compelling justification.

IV. ADVERTISING PRODUCTS AND ENTICING CONSUMERS

19.1 Advertising excessively GHG emitting products, or products of which the manufacturing caused excessive GHG emissions, requires a compelling justification.

19.2 An enterprise must not misrepresent its carbon footprint or the carbon footprint of its products and services as such or in relation to its competitors.

20. Enticing consumers to buy excessively GHG emitting products or services, or products of which the manufacturing or transport caused excessive GHG emissions, by offering special deals, offering products or services at bottom prices, huge rebates, two for the price of one, or free other products requires a compelling justification.

V. OBLIGATIONS OF BUYERS OF FOSSIL FUELS

21.1 Purchasing coal for production purposes requires a compelling justification.

21.2 An enterprise is only allowed to increase its purchasing of coal for the purpose of increasing production during the shortest possible period to allow the materialisation of its transition to renewable energy.

21.3 An enterprise is only allowed to increase its purchasing of oil for the purpose of increasing production during the shortest period reasonably possible period to allow the materialisation of its transition to gas or renewable energy.

VI. SUPERMARKET CHAINS, MAJOR INTERNET SELLERS AND OTHER MAJOR RETAILERS

22.1 Supermarket chains, major internet sellers and other major retailers of products and services must provide a compelling justification for,

(a) putting products and services on the market that emit excessive amounts of GHGs, and

(b) putting products and services on the market the manufacturing of which emitted excessive amounts of GHGs per product,

compared to similar and price-competitive products and services.

22.2 Supermarket chains, major internet sellers and other major retailers of products offering delivery at home must

(a) confine packaging to the minimum required in the given circumstances, and

(b) bring the GHG emissions of the offered modes of transport to the attention of their customers and promote the use of the least emitting mode of transport.

VII. OUTSOURCING

23. In case of outsourcing the manufacturing process or part thereof with the apparent aim of avoiding the reduction obligations under Principle 2.1.1 or Principle 5.1, the enterprise to which the manufacturing process is outsourced has to reduce its emissions to the higher of the percentage mentioned in Principle 2.1.1 or Principle 5.1 (a).

VIII. EFFECTIVE CLIMATE GOVERNANCE

24. The board of an enterprise should ensure that it has access to sufficient knowledge, skills, and experience to effectively debate and decide on climate-related risks and opportunities.

25. The board of an enterprise should ensure that:

(a) the management assesses on an ongoing basis the short-, medium- and long-term materiality of climate change related risks to the enterprise;

(b) the enterprise’s climate change-related accounting assumptions and reporting procedures are robustly tested;

(c) the enterprise’s adaptive actions and responses to climate change are proportionate to the materiality of climate change to the enterprise;

(d) the enterprise does not engage in lobbying and similar endeavours irreconcilable with the imperative of keeping the increase in global average temperature above pre-industrial levels below 1.75 degrees C.

26. The board shall ensure that executive incentives, such as bonuses, are not linked to profits generated from or otherwise linked to activities or actions that are a violation of these Principles, or activities or actions irreconcilable with keeping global warming below 1.75 degrees C compared to pre-industrial levels.

IX. ENTERPRISE’S OBLIGATIONS OF DISCLOSURE

Disclosure of vulnerability to climate change

27. An enterprise must evaluate, in accordance with Principle 25:

(a) the vulnerability of its facilities and property to climate change;

(b) the short-, medium- and long-term financial effect that climate change will, or is likely to have on the enterprise;

(d) the short-, medium- and long-term technically and financially feasible and cost effective options available to reduce GHG emissions and the risks involved if it opts for carbon capture and storage or countervailing measures, and

(e) whether the enterprise’s adaptive actions and responses to climate change are proportionate to the materiality of climate change to the enterprise.

28. An enterprise must publicly disclose in an accessible manner, including by posting on the enterprise’s websites, the information in Principle 27 (a) to (e) and ensure, in particular, that it is readily accessible to those who are or are likely to be directly or indirectly affected by the enterprise’s activities, including investors, shareholders, clients, financiers, employees, securities and environmental regulators and the public.

Disclosure of compliance performance

29. An enterprise must publicly disclose in an accessible manner, including by posting on the enterprise’s websites, information about its performance in complying with its obligations under these Principles and ensure, in particular, that this information is readily accessible to those who are or are likely to be directly or indirectly affected by the enterprise’s activities, including investors, shareholders, clients, financiers, employees, securities and environmental regulators and the public.

Disclosure of GHG emissions from products and services

30. An enterprise must publicly disclose in an accessible manner, including by posting on the enterprise’s websites, information about the GHG-efficiency and GHG emissions connected to the enterprise’s products and services, and how these emissions and efficiency compare to those connected to the products and services of other enterprises, and ensure, in particular, that it is readily accessible to users, consumers and customers.

Disclosures transparent, accurate, complete, comparable and consistent

31.1 To the extent reasonable and feasible, the disclosures required by Principles 27 to 30, 33 and 34 shall be transparent, accurate, complete, consistent and shall avoid double counting.

31.2 The disclosures must include quantifiable information on the reference point, including an identified base year, and assumptions and methodological approaches for estimating and accounting for GHG emissions and removals.

Disclosure to be proportionate

32. The content and manner of disclosure required by Principles 27 to 30, 33 and 34 should be proportionate to the relevant products and services and enterprises concerned, recognising the special circumstances of enterprises in least developed countries.

Disclosure of risk of stranded fossil fuel assets

33. An enterprise whose activities include fossil fuel production must assess the impact that any limitations imposed on the future extraction or use of fossil fuels, consistent with the “carbon budget” concept enunciated by the Intergovernmental Panel on Climate Change, will have on its financial situation. The enterprise must disclose this information, and ensure, in particular, that it is readily accessible to investors, shareholders, clients, financiers, employees, securities, and environmental regulators and the public.

Disclosure of corporate lobbying for insufficient reductions

34. An enterprise must publicly disclose in an accessible manner, including on the enterprise’s websites, any steps taken by the enterprise, in spite of Principle 25 (d), to lobby government not to take action to reduce GHG emissions, or to set GHG emission targets inconsistent with keeping the increase in the average global temperature above pre-industrial levels to below 1.75 degrees C.

X. ENVIRONMENTAL IMPACT ASSESSMENT OF NEW FACILITIES

35. An enterprise must conduct environmental impact assessment complying with the best possible practise before building any major new, or expanding existing facilities, including an assessment of:

(a) the proposed facility’s carbon footprint;

(b) the adverse upstream and downstream effects and ways to reduce such effects, and

XI. OBLIGATIONS OF INVESTORS AND FINANCIERS

Obligations of financiers

36. An enterprise in the banking or finance sector and any other major investor, irrespective of whether they are defined as an enterprise under Principle 1, must:

* ascertain and take into account the GHG emissions of any project, during both construction and operation of the project, that it considers financing;

* ascertain the likelihood of the borrower’s ability to repay the loan granted having regard to the risks posed to the project by climate change and the liability risk posed to the enterprise; and

* refrain from mechanistically relying on credit ratings or accountant reports on the issues mentioned in the Principles, unless the credit ratings or accountant reports unambiguously disclose that and how the risks were assessed.

Obligations of investors and investment managers

37.1 Any investor must ascertain and take into account whether or not the entity in which it aims to invest or has already invested, be it a State under the Oslo Principles or an enterprise under these Principles, complies with its obligations under these Principles.

37.2 Investors must refrain from mechanistically relying on Credit Ratings or accountant reports on the issues mentioned in the Principles, unless the credit ratings or accountant reports unambiguously disclose that and how the risks were assessed.

37.3 The obligations of States under the Oslo Principles have to be read as amended by Principle 2.2.

38.1 Investment in a non-complying entity, be it a State under the Oslo Principles, or an enterprise under these Principles, requires a justification that the investor must provide on request to those who are or are likely to be directly or indirectly affected by the investment, and to security-, environmental- and other regulators.

38.2 The obligations of States under the Oslo Principles have to be read as amended by Principle 2.2.

39. Investment by a prospective investor in coal-fired power plants, enterprises engaged in energy generation from other excessively emitting fossil fuels, or in otherwise excessively GHG emitting enterprises requires a compelling justification.

40. If and to the extent that an investor decides to keep its investments in a non-complying entity, be it a State under the Oslo Principles, or an enterprise under these Principles, or if it decides to make new investments in such an entity, it has to forcefully promote compliance by the relevant entity with the obligations under these principles, or the Oslo Principles as amended by Principle 2.2, by making use of its power as investor.

41.1 Major investors shall appoint, vote for, or, if they are appointed by others, promote appointment of auditors familiar with:

(a) the relevant features of climate change, including the related risks to enterprises, and

(b) the legal obligations of enterprises and their boards.

41.2 Investors shall vote against appointment, or, if they are appointed by others, promote non-appointment of directors to the board of an enterprise not complying with one of more of the obligations emanating from these Principles.

42. Investors must also promote robust testing of the enterprise’s climate change-related accounting assumptions, risk management and reporting procedures.

43.1 If investors outsource the management or selection of their investments, or the use of voting rights, or parts thereof, to others such as investment managers, they must ensure these others comply with the obligations under Principles 37 to 42.

43.2 Irrespective of whether the investor has instructed the investment manager to comply with the obligations emanating from Principles 37 to 42, the investment manager has to comply with these obligations.

43.3 Investors must disclose in a timely, accurate and accessible manner to those who are likely to be directly or indirectly affected by their investments, including supervisory institutions:

(a) their investment portfolio, and

(b) their investment strategy in light of the threat of climate change.

43.4On the request of a beneficiary or a supervisory institution investors must also disclose whether and, if so, to whom they have entrusted the asset management as well as their guidelines or instructions to the investment manager, unless they provide a justification for not disclosing such information.

44. Taking the measures required by Principles 37 to 43 should be proportionate to the relevant investment in light of the relevant circumstances.

XII. OBLIGATIONS OF INSURERS AND REINSURERS

45.1 An insurance or a reinsurance company in deciding whether to cover the liability of an enterprise for losses caused by anthropogenic climate change, it must consider whether the relevant enterprise complies with its obligations under these Principles.

45.2 Covering the liability risk of an enterprise that does not comply with these Principles requires a compelling justification, such as:

(a) the aggregate of the liability risk covered is sufficiently limited, or

(b) the non-compliance is not material.

XIII. OBLIGATIONS OF ACCOUNTANTS

46.1 Accountants in fulfilling their fiduciary duties towards enterprises whose annual accounts they audit and relevant others relying or likely to rely on their reports, have to assess whether the relevant enterprise complies with its obligations under these Principles.

46.2 If the enterprise does not comply with these Principles the accountant has to assess and subsequently provide relevant information about the assessment of the inherent liability risk.

XIV. OBLIGATIONS OF CREDIT RATING AGENTS

47.1 Enterprises active in the credit rating business must assess whether the rated enterprises comply with their obligations under these Principles.

47.2 If a rated enterprise does not comply, the inherent liability risk has to be assessed.

47.3 The outcome of the assessment under Principles 47.1 and 47.2 must be reflected in the rating, along with a transparent explanation on the way the assessment was executed.

XV. ATTORNEYS

48. Attorneys have to investigate the material climate change consequences of any activity in which they are engaged and inform their clients about these consequences.

XVI. EXCEPTION FOR HARD CASES

49. In unforeseen and unexpected scenarios and cases the Principles do not need to be applied to the extent strict application would be manifestly unreasonable.

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