Climate clause

Climate Purposed NDA Terms (Confidentiality Agreement)

Kaia's Clause

Additional provisions for standard non-disclosure / confidentiality agreements (NDAs) to ensure climate change and environmental issues are discussed at the outset of new commercial relationships.

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.

Skip to clause

Why use this?

Businesses sign up to multiple NDAs each year. These clauses provide a unique opportunity for parties to raise climate issues in NDAs affecting a variety of sectors across the economy. The drafting will be particularly relevant where one or both parties has a publicly stated net zero target.

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 parties have agreed to consider the Climate Change Purpose as part of the discussions relating to the Commercial Purpose.

 

Additional Definitions

Climate Change Adaptation Measures means the measures taken or that could be taken by the Parties and their supply and value chains to achieve the Commercial Purpose whilst avoiding or minimising the actual or anticipated effects of climate change.

Climate Change Mitigation Measures means the measures taken or that could be taken by each of the Parties and their supply and value chains to reduce their respective Greenhouse Gas Emissions and to meet their Net Zero Targets. 

Climate Change Purpose means the consideration of Climate Change Adaptation Measures, Climate Change Mitigation Measures and Sustainability Measures as part of every potential commercial relationship.

Commercial Purpose means [Insert Purpose of the NDA ie Discussions about X, consideration of Y, provision of Z].

ESG means Environmental, Social and Governance factors and standards forming a [published] policy or objective of a party.

Greenhouse Gases (GHGs) means the natural and anthropogenic gases which 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 agreement], 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),] each expressed as a total in units of carbon dioxide equivalent. 

Greenhouse Gas (GHG) Emissions means the [Parties’] emissions of GHGs from all sources [related to this Non-Disclosure Agreement], categorised as scope 1, 2 and 3 emissions by 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].

Net Zero Target means the goal of achieving by [2050/INSERT OTHER DATE] a balance between a party’s emissions and removals of greenhouse gases aligned with the Paris Agreement goals.

Sustainability Measures means the measures taken or that could be taken by each of the parties and their supply chains to develop and adopt sustainable initiatives and practices (including but not limited to implementation of circular economy principles, waste management, water management and reducing negative impacts on nature and biodiversity). 

 

Additional Clauses

[Drafting note: Insert new Clause (or add to or adapt existing purpose clause)]

1. The Purposes

1.1 The parties shall, as part of their discussions and negotiations concerning the Commercial Purpose, discuss and consider how the Climate Change Purpose can be achieved as part of any future commercial relationship arising from those discussions and negotiations[, using reasonable endeavours to agree on specific, measurable, realistic and time bound targets to further the Climate Change Purpose].

1.2 When considering the Climate Change Purpose under clause 1.1 the parties shall disclose and consider:

(a) their respective Net Zero Targets; and

(b) their relevant ESG characteristics and commitments* [(including any public positions, lobbying activities or trade associations relating to the goals of the Paris Agreement]).

* [Drafting note: Users may consider widening the drafting here and throughout the clause to include particular ESG requirements in addition to climate that are of particular significance to the parties.]

1.3 Any information disclosed by one party to the other in connection with the Climate Change Purpose shall be treated as the disclosing party’s Confidential Information (and therefore subject to the applicable use and disclosure restrictions in this agreement), save that such information may be used by the recipient (but not disclosed to any third party) to make progress against its Net Zero Target or ESG goals.**

** [Drafting Note: For higher ambition consider decreasing the scope of confidentiality here, so for example, if any environment-related information is divulged in the course of commercial negotiations (or indeed the commercial relationship), the other party may disclose it to a relevant regulator, Parliamentary Inquiry, or Court where it suspects a breach of environmental laws has occurred.  Promoting a culture of transparency around transgressions against the environment promotes systemic change at an organisation, and also goes some way towards ameliorating information asymmetries between those trying to protect the environment and those who damage it.]

Join hundreds of lawyers fighting climate change

Help us and take part