--- title: Align Construction Projects with Climate Targets date: 2024-08-22T09:19:40Z modified: 2025-07-23T11:29:11Z permalink: "https://chancerylaneproject.org/clauses/align-construction-projects-with-climate-targets/" type: clause status: publish excerpt: "" wpid: 5805 jurisdiction: - Australia maintenance-status: - Not maintained practice-area: - Construction - Real estate and property sector: - Construction and infrastructure clause_child_name: "Edward and Elsie's Clause" clause_summary: "

This clause revises the standard of care for construction contracts to require Contractors and Service Providers to adhere to best industry practice to mitigate climate risk and ensure that a construction project meets its carbon or net-zero objectives.

" clause_last_updated_date: 2024-09-10 related_clauses: false --- ## Child’s name Edward and Elsie’s Clause ## Summary This clause revises the standard of care for construction contracts to require Contractors and Service Providers to adhere to best industry practice to mitigate climate risk and ensure that a construction project meets its carbon or net-zero objectives. ## What this clause does This clause enables a project to be aligned with the goals of the Paris Agreement to ensure that during construction and on completion, the Project meets net zero objectives and is capable of withstanding the physical climate change risks which may arise and impact the resilience of the Project. ## Clause Content **1. Contractor’s obligations** 1.1 The Contractor must carry out all of its obligations under the contract in accordance with: 1.1.1 the \[Project Documents OR Contract Documents\]; 1.1.2 all applicable laws and standards; and 1.1.3 Best Industry Practice. 1.2 The Contractor warrants that: 1.2.1 it will \[use best endeavors to\] achieve the \[Net Zero Objectives OR Climate Objectives\]; and \[_Drafting note: Considering the relevant Project and market, it may be more appropriate to require the Contractor to ‘use best endeavors’ (or similar wording) to achieve the \[Net Zero Objectives OR Climate Objectives\]. Consider also whether this requirement would be more effective in tender documentation as a matter for a tenderer to respond to. For example, consider incorporating_ [_\[Robyn's Questionnaire\] Subcontractor/ Supplier Self-Assessment Climate Questionnaire (Construction)_](https://chancerylaneproject.org/climate-clauses/subcontractor-supplier-self-assessment-climate-questionnaire-construction/) _or_ [_\[Raphael's Procurement DDQ\] Climate Change Due Diligence Questionnaire for Suppliers during the RFP phase._\]](https://chancerylaneproject.org/climate-clauses/climate-change-due-diligence-questionnaire-for-suppliers/) 1.2.2 the \[Project OR Asset\] will be fit for purpose at practical completion. \[_Drafting note: Consider amending existing definitions of Fit For Purpose (where applicable) to include the requirements under the \[Net Zero Objectives OR Climate Objectives_\].\] 2\. \[**Net Zero Targets** OR **Climate Targets**\] 2.1 The Principal and the Contractor each warrant that: 2.1.1 they have a \[Net Zero Target OR Climate Target\]; and 2.1.2 the delivery of the \[Project OR Asset\] is consistent with their respective \[Net Zero Target OR Climate Target\]. 2.2 The Contractor must ensure that each subcontract includes equivalent provisions \[to the extent they are applicable\] to clauses 1, 2.1 and \[_insert all other clauses that should be cascaded into subcontracts_\].\* \* \[_Drafting note: Consider if there should be a monetary threshold for this requirement, as it may not be practicable to include these obligations in all subcontracts. Consider also the extent that this should flow down the contracting chain, as currently this is likely to only capture subcontractors that are an immediate subcontractor to the Contractor._\] 3\. \[**Net Zero** OR **Climate Target**\] **Objectives Reporting**\*\* _\*\* \[Drafting note: Consider also requiring the Contractor to submit a \[Net Zero Objectives Plan OR Climate Objectives Plan\] at the commencement of the Project setting out how it intends to comply with the \[Net Zero Objectives OR Climate Objectives\]. Clause 3.2.2 could link to the \[Net Zero Objectives Plan OR Climate Objectives Plan\]._ 3.1 The Contractor must provide to the Principal a report on the last day of each \[quarter OR month OR \[_insert appropriate time frame_\]\] that describes conduct or actions taken to satisfy the \[Net Zero Objectives OR Climate Objectives\] (the \[Net Zero OR Climate Target\] Report). 3.2 The Principal must notify the Contractor within \[10 (ten) Business Days\] of receiving the \[Net Zero OR Climate Target\] Report if the Principal either: 3.2.1 accepts the \[Net Zero OR Climate Target\] Report; or 3.2.2 considers that the Contractor is not meeting the \[Net Zero Objectives OR Climate Objectives\], setting out reasons. 3.3 If the Principal issues a notice under clause 3.2.2, the Contractor must promptly: 3.3.1 prepare a rectification plan to the satisfaction of the Principal, detailing how it plans to correct any failure to achieve the \[Net Zero Objectives OR Climate Objectives\] set out in the notice or otherwise (including any temporary Offsetting required to realign the Contractor’s activities with the \[Net Zero Objectives OR Climate Objectives\]\*\*\*); and 3.3.2 comply with the requirements set out in that notice and the rectification plan, and within \[20 (twenty) Business Days\] notify the Principal of the rectification measures that have been implemented. _\*\*\* \[Drafting note: The reference to Offsetting is included as a back-up for the parties should they miss their Net Zero target for the year. The Offsetting requirement is described as ‘temporary’ because Offsetting should only be used when the parties miss their target for the year during the design and construction phase. It should not be used where the missed objective is the year-on-year target on completion in paragraph (b)(i)(A) and (B) of defined term Net Zero Objectives, as this would be considered a defect in the built Asset and will be dealt with in the defect regime of the construction contract.\]_ 3.4 If the Contractor does not comply with clause 3.3, this will be deemed a \[substantial breach of the Contract\] and the default clause \[●\] will apply. \[_Drafting note: This clause 3 could be alternatively placed in the Project Control Group clause of the Contract (if applicable)._\] **4. Other climate-related obligations** \[_Drafting note: Edward and Elsie’s Clause is focused on ensuring the Contractor’s activities achieve Net Zero. However, there are other climate and environmentally-conscious construction practices that should also be considered. It is recommended that the following clauses are also included in the construction contract:_\] 4.1 **Project Carbon Budget** \[_Insert \[_[_Maeve's Clause_](https://chancerylaneproject.org/clauses/set-a-carbon-budget-for-construction-projects/)_\] (Construction Carbon Budget) and relevant definitions to include a Carbon Budget for the materials procurement for the project._\] 4.2 **Waste Management** \[_Insert \[_[_Francis’ Clause_](https://chancerylaneproject.org/clauses/climate-aligned-construction-waste-management/)_\] Climate Aligned Construction Waste Management and relevant definitions for sustainable waste management during the construction phase._\] 4.3 **Sustainable On Site Work Practices** \[_Insert \[_[_Ashkan’s Clause_](https://chancerylaneproject.org/clauses/sustainable-on-site-working-practices/)_\] Sustainable On Site Work Practices and relevant definitions for inclusion of sustainable construction practices in the construction phase._\] ## Topics **Jurisdictions:** [Australia](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/jurisdiction/australia.md) **Maintenance status:** [Not maintained](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/maintenance-status/not-maintained.md) **Practice Areas:** [Construction](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/practice-area/construction.md), [Real estate and property](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/practice-area/real-estate-and-property.md) **Sectors:** [Construction and infrastructure](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/sector/construction-and-infrastructure.md)