Introduce Emissions Benchmarking

Clauses

[Drafting note: Capitalized terms relate to either a defined term in this clause or a defined term in the main agreement that this clause is designed to be inserted into.]

Green Target and Benchmarking

1.1 Green Target

1.1.1 Within [30 (thirty) Business Days] after each anniversary of the Commencement Date and on the Date of Practical Completion [Drafting note: Users may wish to use the end of the Defects Liability Period, and/or the time permitted under clause [●] to remove temporary works and construction plant], the Climate Professional must provide the Principal and the Contractor with an:

(a) accurate Emissions Scorecard for the preceding Year (or part of a Year where relevant); and

(b) accurate report that indicates whether the:

(i) Green Target has been met; 

(ii) Green Target has not been met but the Emissions for the specified Year are less than the Green Baseline for the applicable Year; 

(iii) Emissions for the specified Year are equal to the Green Baseline for the applicable Year; or

(iv) Emissions for the specified Year exceed the Green Baseline for the applicable Year. 

1.1.2 Subject to clause 1.1.3, if the report issued in accordance with [1.1.1(b)] has been approved by the Principal (such approval not to be unreasonably withheld or delayed) and indicates that the:

(a) Green Target has been met, then 100 (one hundred) percent of the Green Incentive is payable to the Contractor [in accordance with the payment terms at clause [●]];

(b) Green Target has not been met, but the Emissions for the specified Year are less than the Green Baseline for the applicable year, then 75 (seventy-five) percent of the Green Incentive is payable to the Contractor [in accordance with the payment terms at clause [●]]; or

(c) Emissions for the specified Year are equal to the Green Baseline for the applicable Year, then [50 (fifty)]percent of the Green Incentive is payable to the Contractor [in accordance with the payment terms at clause [●]]; or

(d) Emissions for the specified Year exceed the Green Baseline for the applicable Year, then clauses [1.2 to 1.7] shall apply. 

1.1.3 The Principal must pay to the Contractor the amount (if any) of the Green Incentive which is payable to the Contractor calculated in accordance with clause 1.1.2 or clause 1.1.3 within [60 (sixty)] days of its receipt of the Emissions Scorecard and related report. 

[Note: a Contractor's entitlement to payment under clause 1.1.1 is a separate entitlement to that contained in clause 1.6.1.]

1.2 Right to conduct a benchmark

1.2.1 The Principal may, by using a Climate Professional, initiate a benchmarking exercise of all or any part of the items or components set out in the Emissions Scorecard in accordance with clause 1.3 (Benchmarking Exercise) by giving a notice to the Contractor in accordance with clause [●] [Drafting note: Insert cross reference to notice provisions.], specifying the item or component of the Emissions Scorecard against which the benchmark is to be conducted (Benchmarked Items). 

1.2.2 The Principal undertakes to engage a Climate Professional to conduct the Benchmarking Exercise, on the terms specified in Annexure Part [●] subject to any amendments that may be requested by the Climate Professional and approved by the Contractor (such approval not to be unreasonably withheld or delayed). [Note: Consider engaging the Climate Professional by way of a short form consultancy agreement.]

1.3 Comparative benchmark

The Benchmarking Exercise will compare the Emissions for the Benchmarked Items against the Greenhouse Gasses emissions for items or components that are the same as, or substitutable for, the Benchmarked Items (Comparable Items) based on data or information from:

1.3.1 other contractors, suppliers, or service providers of deliverables or services that are similar to the Benchmarked Items and that are available in a comparable market and for a comparable project to the [project]; 

1.3.2 a reasonably reputable [national OR international] source, which provides the same or similar benchmarking services or frameworks as contemplated under this clause 1, such as:

(a) [the benchmarking frameworks produced by the National Australian Built Environment Rating System (NABERS);

(b) the 'Net Zero Company Benchmark' assessments by Climate Action 100+]; 

[Drafting note: The above are some examples of benchmarking services and databases. User should insert the relevant benchmarking services they wish to include as examples. If the User wishes to require a particular source, it should list this source and remove the words 'such as'.]

1.3.3 testing the market through reasonably reputable [national or international] databases, such as:

(a) [the Australian National Life Cycle Inventory Database (AusLCI) delivered by the Australian Life Cycle Assessment Society; or

(b) the Infrastructures Sustainability (IS) or other rating scheme developed by the Infrastructure Sustainability Council of Australia]; or 

[Drafting note: The above are some examples of benchmarking services and databases. User should insert the relevant benchmarking database they wish to include as examples. If the User wishes to require a particular database, it should list this database and remove the words 'such as'.]

1.3.4 otherwise testing the market; or

1.3.5 any combination of the sources in clauses [1.3.1 to 1.3.4], 

as elected by the Principal in its sole discretion [Drafting note: Users may wish to amend this clause to provide that the Contractor, or both parties, determine which of these data or information sources is to be used to determine a market benchmark] to determine a market benchmark (Market Benchmark). 

1.4 Assistance

The Contractor must: 

1.4.4 give the Principal, the Superintendent, any Climate Professional and their respective [employees, agents and representatives]:

(a) access to the Site (after reasonable written notice, in accordance with clauses [●] [Drafting note: Insert cross reference to notice provisions.]), the Contractor’s employees, Subcontractors, information or documents; and

(b) any other assistance,

reasonably required by the Principal and/or any Climate Professional to conduct the Benchmarking Exercise, excluding information relating to the Contractor’s costs and margins in providing the Benchmarked Items; and

1.4.2 give the Principal, Superintendent and any Climate Professional a copy of all reports from benchmarking carried out by (or at the request of) the Contractor or its Subcontractors and relating to the Benchmarked Items (which may be modified so that they do not identify the Contractor’s customers or its internal costs and margins) promptly after a request by the Principal, Superintendent or any Climate Professional, or their respective representative or agent, if any exist, in accordance with clause [●] [Drafting note: Insert cross reference to Contractor-supplied documents provisions.]. [Drafting note: Consider specifying such reports as part of the Contractor supplied documents listed in the Particulars OR Annexure Part A.]

If the Contractor fails to give such access, assistance and reports as reasonably required under this clause 1.4, this constitutes a breach of the Contract and the Contractor will not be entitled to the Green Incentive.

1.5 Prepare and provide the Benchmark Report

1.5.1 The Climate Professional shall produce a report (Benchmark Report) within [30 (thirty) days] after completing the Benchmarking Exercise. 

1.5.2 The Benchmark Report:

(a) must:

(i) itemise the Greenhouse Gas emissions of the Comparable Items; 

(ii) specify the data and information relied upon to support the findings of clause [1.5.2(a)(i)]; 

(iii) specify the methodology relied upon to support the calculation of the Market Benchmark; and

(iv) recommend alternative suppliers or service providers of the Comparable Items, if the reported Greenhouse Gas emissions are less than the Emissions; and

(b) [must OR may] be modified so that it does not identify the entity used for comparative purposes, nor such entity’s confidential information. 

1.5.3 The Principal shall provide the Contractor with a copy of the Benchmark Report within [20 (twenty) Business Days] after it is completed.

1.5.4 The Contractor shall [not] be entitled to an EOT arising from the Principal failing to produce the Benchmarking Report under this clause [1.5]. 

1.6 Consequence of benchmark

1.6.1 If the Benchmark Report shows that:

(a) the Market Benchmark exceeds the Emissions of the Benchmarked Items, then the Green Market Incentive is payable to the Contractor; or

(b) the Market Benchmark is less than the Emissions of the Benchmarked Items, then the Principal may, by notice to the Contractor: 

(i) require the Contractor to develop a plan to reduce the Emissions of the Benchmarked Items to the levels specified for the Comparable Items in the Benchmark Report; and/or

(ii) require the Contractor to use its best endeavors to procure the Benchmarked Items from the alternative suppliers or service providers recommended pursuant to [1.5.2(a)(iv)]; and

(iii) any other actions reasonably required by the Principal.

1.6.2 If the Principal issues a notice under clause [1.6.1(b)], the Contractor must, within [30 (thirty) Business Days] of such notice from the Principal:

(a) provide a copy of the plan in clause [1.6.1(b)(i)] for the approval of the Principal (such approval not to be unreasonably withheld or delayed);

(b) put the approved plan into operation;

(c) do all things [reasonably] necessary to implement the Principal’s requirements set out in the notice; and

(d) notify the Principal that the requirements of the notice issued under clause [1.6.1(b)] have been implemented.

1.6.3 If the Contractor fails to comply with any part of clause [1.6.2] then the Principal may choose to either:

(a) deduct the Green Market Incentive from the [Contract Sum]; or

(b) immediately deem the Green Market Incentive a debt due and payable from the Contractor to the Principal [Drafting note: Users may wish to amend the clause earlier in the Contract on final payments to incorporate reference to the last Benchmarking Exercise being completed first]; and

(c) within [30 (thirty) Business Days] of receiving payment of the Green Market Incentive, the Principal must pay the Green Market Incentive to [insert environmental OR sustainability organisation]. [Drafting note: This has been drafted to somewhat ‘set off’ the emissions caused by the Contractor.]

1.6.4 If the Contractor is entitled to a payment under clause 1.6.1(a), the Principal must pay to the Contractor the amount the subject of clause 1.6.1(a) within [30 (thirty)] days of providing the Contractor with the Benchmark Report. 

1.6.5 Failure by the Principal to pay an amount under clause 1.6.1(a) does not constitute a substantial breach.

1.6.6 The Contractor shall not be entitled to make any [claim] whatsoever, including an EOT, against the Principal arising from the Principal exercising its rights under this clause [1.6]. 

1.7 Costs

The parties agree to:

1.7.1 share equally the [reasonable] cost of engaging a Climate Professional to conduct the Benchmarking Exercise [Drafting note: Consider only requiring the 'reasonable' costs to be shared, requiring the Principal to provide documentary evidence of the payment to the Climate Professional, and specifying that the Consultant may issue a notice of dispute in accordance with clause [●] if it considers the cost to be unreasonable]; and 

1.7.2 otherwise, bear their own respective costs incurred under this clause [1].

1.8 Extension of time (EOT)

The Contractor is not entitled to an EOT in relation to the performance of any obligations in this clause [1].

1.9 Disputes

A Dispute arising in relation to matters the subject of this clause [●], including a dispute in relation to the Principal’s findings under clause 1.1.3, shall be subject to [clause [●]]. [Drafting note: Insert cross reference to dispute resolution provisions.]

[Note: Ensure the term 'Dispute' is defined in the relevant contract. For example, defined at cl 41 of AS4000-1992 construct only contracts.]

1.10 Variations

1.10.1 The Principal may, acting reasonably, in its absolute discretion increase the Green Target. 

1.10.2 If the Principal increases the Green Target in accordance with clause 1.10.1, the Contractor will be entitled to relief in accordance with the clause [●]. 

[Note: Insert cross-reference to relevant Variation clause or regime in Contract.]

Annexure Part [●]: Form of Emissions Scorecard

[Drafting note: Insert the emissions scorecard used in Maria’s Scorecard.]

Annexure Part [●]: Terms of Engagement of Climate Professional

[Drafting note: Insert terms of engagement of Climate Professional, as referenced in clause [1.2].]