---
title: Carbon Neutral Agreement Clause
date: 2024-03-27T14:15:53Z
modified: 2025-07-23T11:12:19Z
permalink: "https://chancerylaneproject.org/clauses/carbon-neutral-agreement-clause/"
type: clause
status: publish
excerpt: ""
wpid: 2017
jurisdiction:
  - Aotearoa New Zealand
maintenance-status:
  - Not maintained
practice-area:
  - Corporate, mergers and acquisitions (M&A)
clause_child_name: Mackenzie and Maggie’s Clause
clause_summary: "<p>This clause places a &#39;light green&#39; obligation on shareholders to work towards operating the company in a carbon neutral manner.</p>"
clause_last_updated_date: 2023-05-23
related_clauses: false
timestamp: 2025-07-23T11:12:19Z
tags:
  - Aotearoa New Zealand
  - Not maintained
  - Corporate, mergers and acquisitions (M&A)
---

## Child’s name

Mackenzie and Maggie’s Clause

## Summary

This clause places a 'light green' obligation on shareholders to work towards operating the company in a carbon neutral manner.

## What this clause does

Enables a company to place an obligation on shareholders. It may be appropriate for use by a company that is embarking on its emissions reduction journey, or which is a new or fast-growing company that does not yet have a good understanding of its emissions profile. This clause does not set specific targets for when carbon neutrality should be achieved.

This clause adapts \[Callum & Theo’s Clause\] Climate Standard Transaction Terms for use in Aotearoa New Zealand.

## Clause Content

**1. Carbon neutrality**

The parties agree that their collective intention is that the Business of the Company should be conducted in a manner which is at least Carbon Neutral and agree to work together in good faith to further that intention.

## Definitions

**Carbon Footprint** means the total annual Scope 1, 2 and 3 Emissions relating to the Business operations.

**Carbon Neutral** means the reduction and offset of the Company’s Carbon Footprint on an annual basis, achieved by:

(a) first, using reasonable endeavours to reduce its Carbon Footprint; and

(b) second, offsetting\* its residual Carbon Footprint (for example, by purchasing (and cancelling) New Zealand units as defined in the [Climate Change Response Act 2002](https://environment.govt.nz/acts-and-regulations/acts/climate-change-response-act-2002/#:~:text=This%20Act%20puts%20in%20place,Protocol%20and%20the%20Paris%20Agreement)).

**Scope 1, 2 and 3 Emissions** means the three classifications of emissions in [_The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard, Revised Edition 2015_](https://ghgprotocol.org/corporate-standard), as updated periodically.

\* _\[Drafting note: to define offsetting, consider using the TCLP Glossary:_ [_Offset or Offsetting_](https://glossary.chancerylaneproject.org/term/Offset_or_Offsetting)_.\]_

## Topics

**Jurisdictions:** [Aotearoa New Zealand](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/jurisdiction/aotearoa-new-zealand.md)

**Maintenance status:** [Not maintained](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/maintenance-status/not-maintained.md)

**Practice Areas:** [Corporate, mergers and acquisitions (M&A)](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/practice-area/corporate-mergers-and-acquisitions-ma.md)