Climate clause

Green Termination Provision (Short Form)

Annie's Clause

A clause that allows a right of termination for a customer so that they can pivot to a greener supplier to meet their sustainability, climate or other environmental objectives.

This is a net zero clause

This clause aligns with Paris Agreement goals, Race to Zero requirements and the Oxford Principles for Net Zero Aligned Carbon Offsetting. For tools and support to use this clause, use our toolkit or join one of our events.

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Why use this?

A shorter form of Agatha’s Clause, this gives customers a right to switch suppliers if the existing supplier is unable to match a ‘greener’ offer from an alternative supplier. This embeds assessment of green credentials into procurement, supporting parties to meet their net zero targets and increase their competitiveness.

Disclaimer - please read

The clauses on this website (and published in our Climate Contract Playbook) have been prepared in good faith on a pro bono basis and are free to download and use. The clauses have been drafted and edited by a variety of lawyers and, as such, the approaches to drafting may not conform to any particular drafting norms. We acknowledge this as a consequence of the collaborative drafting process.

The clauses on this website (and published in our Climate Contract Playbook) are provided on an ‘as is’ basis and without any representation or warranty as to accuracy or that the clauses will achieve the relevant climate goal or any other outcome.

This website (and the Climate Contract Playbook) does not comprise, constitute or provide personal, specific or individual recommendations or advice of any kind, and does not contain legal or financial advice. The clauses are precedents for legal professionals to use, amend and negotiate using their professional skill and judgement and at their own risk.

While care has been taken in the drafting of these clauses, neither The Chancery Lane Project nor any of its contributors owe a duty of care to any party in relation to their preparation and do not accept any liability for any errors or omissions, nor for any loss incurred by any person relying on or using these clauses or any other person. Users should use their own professional judgement in the application of these clauses to any particular circumstance or jurisdiction or seek independent legal advice.

At present, all the clauses are based on the laws of England and Wales. We encourage the conversion of these precedent clauses for use in other jurisdictions.

The clause

Additional Definitions

Carbon Footprint means the total annual Scope 1, 2 and 3 Emissions of [a party], expressed as a carbon dioxide equivalent. [Drafting note: See TCLP Glossary – Carbon Footprint. Amend the definition to match the scope imagined by the agreement this is inserted into.]

Scope 1, 2 and 3 Emissions means the three classifications of emissions in the The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard, Revised Edition 2015 as updated from time to time [Scope 1, 2 and 3 emissions are defined on page 27 of the GHG Protocol].

 

Additional Clauses

Green Termination

1.1 Without affecting any other right or remedy available to it, the Customer may terminate this agreement by giving [1 month OR [NUMBER] month’s] written notice to the [Supplier]:

1.1.1 if the Customer, [acting in good faith OR having made a reasonable comparison of the Supplier and other available suppliers]*, has decided to switch to an alternate supplier to achieve a reduction in Customer’s Carbon Footprint, provided:

  • the potential reduction is [supported by reasonable evidence and is] at least [PERCENTAGE]% less** than the Customer’s Carbon Footprint at the time of the comparison [(with that calculation meeting the requirements of [INSERT CARBON MEASUREMENT METHODOLOGY USED BY THE CUSTOMER])]; [and]
  • the proposed obligations of the alternate supplier are at least as onerous as those of the Supplier under this agreement; [and]
  • [the proposed price of the alternate supplier is not significantly different to the price of the Supplier in aggregate over an equivalent period;]

1.1.2 if the Supplier’s environmental practices, negative environmental impacts,  lobbying activities, partnerships, trade associations or public policy positions [may] bring the Customer’s reputation into disrepute because they conflict with the Customer’s published [net zero/carbon reduction] or [add specific environmental] targets from time to time; or

1.1.3 if the Supplier acts [persistently and materially] in a manner that [reasonably justifies the Customer’s opinion that the Supplier’s business operations or other conduct] [is/are] inconsistent with good environmental practice and policy [, as exemplified in [INSERT INDUSTRY ACCEPTED GUIDANCE OR STANDARD]]; or

1.1.4 if the Supplier fails within [30] days to respond fully to a request for information made by the Customer to allow the Customer to assess the Supplier’s Carbon Footprint, environmental practices and policies that relate to [the activities/ supply of Services/ Services provided] under this agreement.

* [Drafting note: To raise the climate ambition of this clause, consider removing the good faith and or reasonableness requirement.]

** [Drafting Note: It may be difficult for the Customer to evidence the percentage reduction. This could be addressed by the Supplier providing reporting, or dispensing with the requirement or clarifying that third party analytics or reasonable belief can be the trigger.]

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