Climate clause

Alteration/ Improvement Provisions in Leases to Improve Climate/ Environmental Impact of Buildings and Better Use of Shared Space

Rosie's Clause

Require landlords to act reasonably when tenants propose alterations to their premises (and associated change of use) or improvements to common areas, which have a positive climate impact.

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?

To help tenants carry out environmental improvements knowing that landlords need to act reasonably in allowing these. The clause also encourages more efficient use of land and buildings and more collaboration between landlords and tenants to achieve climate goals.

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 Recital

(A) The Landlord and Tenant [have signed up to the Race to Zero and] acknowledge their common intention to achieve their respective net zero targets and align with the objectives of the Paris Agreement, in particular pursuing efforts to limit global temperature increase to 1.5 degrees Celsius above pre-industrial levels and achieve net zero or net negative emissions by 2050 or sooner,  in a manner that promotes a just transition to a low carbon economy and that results in at least a 7%* reduction of greenhouse gas emissions year on year.

* [The ‘Carbon Law’; and  J. Rockström et al., A roadmap for rapid decarbonisation, Science 355.6331, 1269-1271 (2017)]

 

Additional Definitions 

Environmental Improvements means alterations made by the Tenant that improve the Environmental Performance of the Premises, the Estate or the Building;

Environmental Performance means all or any of the following:

(a) achieving the Tenant’s [or Landlord’s] Net Zero Target including the consumption of energy and associated generation of GHG Emissions;

(b) the consumption of water;

(c) waste generation and management; and 

(d) any other environmental impact arising from the use or operation of the Premises, the Estate or the Building. 

GHG Emissions means the Landlord’s [and Tenant’s] emissions of GHGs from all sources related to this Lease, categorised as scope 1, 2 and 3 emissions in The Greenhouse Gas Protocol: A Corporate Accounting and Reporting, Standard Revised Edition 2015 as updated from time to time [Drafting note: Scope 1, 2 and 3 emissions are defined on page 27 of the GHG Protocol].

Greenhouse Gases (GHGs) means the natural and anthropogenic gases that trap thermal radiation in the earth’s atmosphere and are specified in Annex A to the Kyoto Protocol to the United Nations Framework Convention on Climate Change (UNFCCC) [or otherwise specified by the UNFCCC at the date of this Lease], as may be amended from time to time[, which include carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulphur hexafluoride (SF6), and nitrogen trifluoride (NF3).] 

Net Zero Target means both a reduction of GHG Emissions overall and a removal of GHG Emissions associated with the Offsets acquired to address Residual Emissions of the [Landlord and] Tenant [respectively] by a specified date before 2050 to achieve a balance between the sources and sinks of GHG Emissions in a calendar year and for each subsequent year thereafter and the objectives of the Paris Agreement.

Offset means the purchase of carbon credits from a project:

(i) that has been verified in accordance with [insert name of voluntary standard] or under the United Nations Framework Convention on Climate Change (UNFCCC) clean development mechanism (CDM) [or [successor/ equivalent] UNFCCC mechanism];

(ii) where the emissions of GHG avoided, reduced or removed by the project are additional;

(iii)  that in relation to GHG removals, employs long-lived storage methods that have a low risk of reversal over millennia;  

(iv) that prioritises the removal of GHG from the atmosphere rather than avoids or reduces third party emissions of GHG; and

(v) that takes account of a just transition and addresses wider social and ecological goals. 

Residual Emissions means the GHG Emissions, that are emitted after all reasonable efforts have been made by the [Landlord] [and Tenant] to reduce GHG Emissions.

 

Additional Clauses

For Tenant’s Alterations covenant

The Tenant may, with the Landlord’s consent, which is not to be unreasonably withheld or delayed, carry out [structural and] non-structural works to the Premises [or to unbuilt parts of the Estate] which [the Tenant can demonstrate by the provision of an [energy efficiency report/ecology report/other report]] will improve the Environmental Performance of the Premises, Building or Estate. The Landlord can refuse consent to any proposed works which in the Landlord’s reasonable opinion would have a detrimental impact on the investment value of the Landlord’s reversionary interest in the Premises, Building or Estate.

For Tenant’s Yielding Up covenant

By the End Date the Tenant must have removed [INSERT DETAILS

save that the Tenant shall not be required to remove any Environmental Improvements [unless the Landlord has given the Tenant at least [X] months’ notice that it requires the Tenant to remove all or part of any Environmental Improvements on the basis that those works remaining after the End Date would have a detrimental impact on the investment value of the Landlord’s reversionary interest in the Premises, Building or Estate].

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