Climate clause

Landlord and Tenant Obligations to Provide Renewable Electricity

Lotta's Clause

A low barrier to entry clause that delivers emissions reductions for landlords and tenants by ensuring that electricity supplied to a leasehold property is from renewable sources.

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?

The clause raises renewable energy at the outset of commercial relations and in lease negotiations between landlord and tenant. As an operative provision of a lease, Lotta’s Clause delivers real impact by reducing the carbon footprint of the parties and the adverse environmental impact of leased buildings in landlord portfolios.

The clause

Additional Definitions

100% Renewable Energy means an energy system where all the energy used is sourced from Renewable Energy Sources.

REGO Certificate means a Renewable Energy Guarantees of Origin [or an equivalent] certificate for all energy consumed within the Premises and generated from a recognised source of renewable energy for which such certificates are available.

Renewable Energy Sources means naturally replenishing non-fossil sources of energy, including but not limited to hydropower and tidal power, hydrothermal power, aerothermal power and geothermal power, wind, and solar* which are in each case eligible for certification by REGO Certificates.**

* [Drafting note: Consider specifically excluding nuclear and regenerative biomasses (wood, municipal waste, biomass and landfill gas, ethanol, biodiesel) in favour of naturally replenishing sources of energy. Energy generated by incineration emits significant quantities of Greenhouse Gases and other forms of small particulate air pollution.]

** [Drafting note: The Environmental Context section of the notes accompanying Lotta’s Clause explains why REGOs and REGO certificates in the UK are not a straightforward guarantee of 100% renewable energy. This may change when the UK government announces the outcome of its 2021 review.]

[Drafting note: Capitalised terms relate to either a defined term in this clause or a defined term in the main agreement that this clause is designed to be inserted into.]

Additional Clauses 

Landlord’s Obligations

1. Electricity Supply 

1.1 The Landlord shall procure electricity for the Premises that is 100% Renewable Energy.

1.2 The Landlord shall provide the Tenant on demand with appropriate documentation to evidence the energy sources used to generate electricity for the Premises.

Tenant’s Obligations

2. Electricity Supply 

2.1 If the Tenant procures any electricity for the Premises, it shall be 100% Renewable Energy.

2.2 The Tenant shall provide the Landlord on demand with appropriate documentation to evidence the energy sources used to generate any electricity procured by the Tenant.

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