Climate clause

Emissions Notification Obligation

Dharana & Keshan’s Clause

Dharana & Keshan's Clause requires parties to measure their emissions and report on them in line with the climate reporting framework in Aotearoa New Zealand's Financial Reporting Act 2013.

This is a climate clause

This clause brings climate considerations to your drafting. It is not yet net zero aligned. To align this clause with net zero, use our toolkit or join one of our events.

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Why use this?

A number of businesses in Aotearoa New Zealand are required to report on their emissions under the climate reporting framework. Reporting on emissions encourages companies to reduce their emissions and creates accountability to stakeholders. Dharana & Keshan's Clause can be use in any supply agreement.

Dharana & Keshan's Clause adapts [Sebastian's Clause] Entire Business Net Zero Objectives for use in Aotearoa New Zealand.

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The clauses on this website 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 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.

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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.

The clause

Additional definitions

Carbon Footprint means the total annual GHG Emissions of a party, expressed as a carbon dioxide equivalent.

Carbon Footprint Data means the full figures and details of the measurement and calculations carried out by a party in the assessment of its Carbon Footprint at any point in time.

GHG Emissions means emissions of GHGs from all sources, categorised as scope 1, 2 and 3 emissions by the GHG Protocol.

GHG Protocol means The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard, Revised Edition 2015.

GHGs means the natural and anthropogenic gases which trap thermal radiation in the earth’s atmosphere. They are specified by the United Nations Framework Convention on Climate Change (UNFCCC) in Annex A to the Kyoto Protocol and may be updated periodically.


Additional clauses 

1. Sustainability objectives

[The [Supplier]][Each party] must:

1.1 regularly measure and report on its Carbon Footprint in accordance with the GHG Protocol and (where applicable) the Aotearoa New Zealand Climate Standards published by the External Reporting Board;

1.2 [reduce its Carbon Footprint, as originally assessed, by [●]% within [●] months of the signing of this document, as reasonably demonstrated by Carbon Footprint Data;] [Drafting note: Insert if there is an expectation of a reduction in a party’s carbon footprint]

1.3 [establish a sustainability committee (comprising a committee of its [board of directors][management personnel]) to oversee the development, implementation and review of a net zero target (being a goal of achieving, by 2050, a balance between emissions and removals of greenhouse gases aligned with the goals of the Climate Change Response (Zero Carbon) Amendment Act 2019) and prepare and execute an implementation plan to achieve that target;] [Drafting note: Insert to impose a requirement to establish a net zero goal and a sustainability committee to oversee it]

1.4 [develop and implement a plan of continuous improvement and quantifiable short-, medium- and long-term interim targets, approved by its board of directors, to reduce its Carbon Footprint by a minimum of [7]% per year and to provide a copy of that plan to the [Customer][other party];] [Drafting note: Insert to impose a specific emissions reduction target (as an alternative to a net zero plan under paragraph (1.3))]

1.5 [report annually on the climate risks and opportunities to it and its business in accordance with the climate-related disclosure framework (as defined in section 9AA of the Financial Reporting Act 2013);]* and 

1.6 use reasonable endeavours to include contractual clauses (for example, climate clauses published by The Chancery Lane Project, as adapted for use in Aotearoa New Zealand) in contracts it signs to embed Carbon Footprint reductions in its activities and relationships.

* [Drafting note: Insert if reporting of climate risks is required, for example, to assist a party subject to TCFD reporting to obtain relevant information, or to acknowledge the existence of a mandatory TCFD reporting obligation.]

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