Climate clause

Sustainable On Site Working Practices

Ashkan's Clause

A clause (which is revenue neutral for the employer) requiring contractors and project delivery teams to use sustainable working practices on site in order to reduce the energy used in construction.

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?

To encourage construction site working practices that align with climate and sustainable practices.

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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.

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The clause

Additional Definitions

Alternative Green Working Practices has the meaning given to it in clause 2.1.

Contractor Related Party means the Contractor’s employees, subcontractors and agents and any persons engaged by the Contractor in connection with the Works or any part thereof.

Cycle to Work Scheme means the UK Government tax exemption initiative introduced in the Finance Act 1999 to promote healthier journeys to work and to reduce environmental pollution. [For more information, see: Cycle to Work Schemes – Essential Information.]

Electrification means converting or replacing infrastructure, machines, appliances, devices and other objects which are powered by a Finite Power Source, so that electricity generated from renewable sources is used as a permanent replacement power source.

Energy Efficient Equipment means tools and equipment which achieve Energy Savings and associated Greenhouse Gas emission reductions and include (without limitation) all-electric heavy construction equipment, hybrid and low-carbon equipment, diesel-alternatives and equipment powered by the national grid rather than on-site diesel generators. 

[Energy Savings means the amount of energy or fuel saved following implementation of energy efficient measures or practices calculated in accordance with Schedule [●].]

Finite Power Source means a power source which is reliant on hydrocarbons.

GHG Emissions Monitoring System means a system to monitor the amount of GHG emissions at the Site over a specified period of time, each expressed as a total in units of carbon dioxide equivalent [in accordance with the requirements of Regulation (EU) No 601/2012 of 21 June 2012 on the monitoring and reporting of greenhouse gas emissions pursuant to Directive 2003/EC of the European Parliament and of the Council].

Green Charitable Organisation means [insert details of nominated organisation] or their successors or permitted assignees as the case may be from time to time.      

Green Retention Fund means the amount of [to be agreed between the parties]% of the Contract Price/ Gross Valuation [Drafting note: cross-refer to appropriate definition in the Contract] to which the Contractor may be entitled pursuant to clause 3.2.

Green Working Practice Notice has the meaning given to it in clause 2.1.

Green Working Practices means the working practices set out in Schedule 1, as updated from time to time.

Green Working Practices Report has the meaning given to it in clause 1.3.

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

[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

1. Contractor’s Green Working Practices

1.1 The Contractor shall use all reasonable endeavours to, and shall use all reasonable endeavours to procure that any Contractor Related Party shall, implement the Green Working Practices when carrying out and completing the Works.

1.2 The Contractor shall procure a GHG Emissions Monitoring System to record the GHG emissions reductions resulting from the Green Working Practices.

1.3 The Contractor shall submit a written report to the Employer on a [quarterly basis] identifying:

1.3.1 the actions taken by the Contractor and any Contractor Related Party to implement the Green Working Practices;

1.3.2 the Energy Savings and GHG reductions achieved during the previous [quarter] as a result of the steps taken to implement the Green Working Practices; and 

1.3.3 any failure to implement the Green Working Practices and the actions being taken to remedy such failure,

(a Green Working Practices Report).

1.4 Within [7] Business Days of receipt of a Green Working Practices Report by the Employer, the Employer shall (acting reasonably) notify the Contractor in writing whether or not it agrees, acting reasonably, with the contents of the Green Working Practices Report (including any actions being taken under clause 1.3.3 if applicable). Any such notification shall include reasons for the Employer’s decision, in the event that the Employer does not agree with the contents of the Green Working Practices Report.

2. Alternative Green Working Practices

2.1 During the course of the Works, the Contractor may propose alternative Green Working Practices (Alternative Green Working Practices) by giving a written notice (Green Working Practice Notice) to the Employer setting out:

2.1.1 the proposed Alternative Green Working Practice(s) and the original Green Working Practice(s) which the Alternative Green Working Practice(s) [is/ are] intended to replace;

2.1.2 the reason for the Alternative Green Working Practice(s);

2.1.3 the time within, and the manner in which, the Contractor proposes to implement the Alternative Green Working Practice(s);

2.1.4 the effect (if any) the Alternative Green Working Practice(s) will have on the construction programme (including any extension of time required to the Date for Practical Completion);

2.1.5 the effects (if any) the Alternative Green Working Practice(s) will have on the Contractor’s ability to satisfy its obligations under the Contract;

2.1.6 the additional Energy Savings and GHG emissions reductions, the Alternative Green Working Practice(s) will have;

2.1.7 the cost impact (if any) to the Employer arising from the Alternative Green Working Practice(s); and

2.1.8 any other relevant information reasonably required by the Employer to assess the Alternative Green Working Practice(s).

2.2 Within [14] Business Days of receipt of a Green Working Practice Notice from the Contractor, the Employer shall (acting reasonably) issue a notice to the Contractor which either:

2.2.1 approves the Alternative Green Working Practice (either in whole or part);

2.2.2 rejects the Alternative Green Working Practice (either in whole or part), setting out reasons for any such rejection; or

2.2.3 requests further information from the Contractor to enable the Employer to properly assess the Alternative Green Working Practice or any part of the Green Working Practice which has not been approved or rejected.

2.3 If the Employer has approved the proposed Alternative Green Working Practice pursuant to clause 2.2.1, the Contractor shall cease implementing the original Green Working Practice(s) and shall instead proceed with implementing the approved Alternative Green Working Practice(s) in accordance with clause 1.

2.4 If the Employer rejects the Alternative Green Working Practice(s) (in whole or in part) under clause 2.2.2, the Contractor may:

2.4.1 amend the Green Working Practice Notice to address the Employer’s reasons for rejection, and re-submit the modified Green Working Practice Notice pursuant to clause 2.1; [or

2.4.2 issue a notice of dispute pursuant to [cross-refer to dispute resolution provisions under the Contract].]

2.5 Until such time as the Employer approves any Alternative Green Working Practices, the Contractor (and any Contractor Related Party) shall continue to comply with its obligations under clause 1.

3. Consequences of complying with the Green Working Practices 

3.1 The Parties acknowledge and agree that the consequences of any compliance or otherwise by the Contractor or any Contractor Related Party with clause 1 shall be as set out in this clause 3.

3.2 Subject always to the Contractor complying with its reporting obligations under clause 1, where the Contractor or any Contractor Related Party has implemented the Green Working Practices (including for the avoidance of doubt any approved Alternative Green Working Practices), the Contractor shall be entitled to payment from the Green Retention Fund on the following basis:

3.2.1 where the Contractor has properly demonstrated it has implemented [between two and four] Green Working Practices every [quarter] from the date of commencement up to the date of practical completion, it shall be entitled to a payment of [40]% of the Green Retention Fund;

3.2.2 where the Contractor has properly demonstrated it has implemented [five or more] Green Working Practices every [quarter] from the date of commencement up to the date of practical completion, it shall be entitled to a payment of [80]% of the Green Retention Fund;

3.2.3 where the Contractor has properly demonstrated it has implemented [eight or more] Green Working Practices every [quarter] from the date of commencement up to the date of practical completion, it shall be entitled to a payment of [100]% of the Green Retention Fund.

3.3 Any sums due to the Contractor under this clause 3 shall be included in the Contractor’s final payment application [Drafting note: cross-refer to payment provisions in the Contract and amend as necessary].

3.4 If there is any amount left in the Green Retention Fund after the Contractor has received the proportion to which it is entitled in accordance with clause 3.2, any such amount shall be donated to the nominated Green Charitable Organisation or such other Green Charitable Organisation as the parties agree in writing.

 

Schedule 1: Green Working Practices

[Drafting note: Parties to agree which (and how many) Green Working Practices are suitable for the project being delivered.]

(a) The use of energy-saving lighting, including but not limited to light emitting diodes (LEDs) and compact fluorescent lamps (CFLs) and suitable insulation in [100]% of all lighting and insulation to be used in Site facilities;

(b) reducing water usage (including but not limited to implementing eco-friendly low flow faucets and toilets on Site and adopting other low-carbon alternatives for Site facilities);

(c) recycling and reusing materials on Site wherever possible and practicable (including but not limited to having appropriate recycling facilities on Site);

(d) purchasing all electricity used on Site from renewable sources;*

(e) the Electrification of at least [50]% of construction tools on Site and at least 60% of energy using equipment at Site to be Energy Efficient Equipment;

(f) preventing the use of single-use plastic on Site as far as reasonably practicable and providing alternative facilities such as water bottle-filling stations to achieve this goal;

(g) reducing noise pollution created while carrying out and completing the Works (including but not limited to limiting the use of on-site diesel generators);

(h) engaging employees [and subcontractors] based within a [10] mile radius to the Site where possible;

(i) promoting green travel for staff to and from Site (including but not limited to offering the Cycle to Work Scheme to the Contractor’s employees working on Site);

(j) minimising the impact of any excavation works on the area surrounding the Site;

(k) registering with the Considerate Contractors Scheme and adhering to the Code of Considerate Practice as published by the Considerate Contractors Scheme and updated from time to time [Drafting note: CCS is a UK based scheme, projects abroad should seek to replace with an alternative national or local scheme where possible];

(l) using, where reasonably practicable, green technologies in welfare facilities on Site and/ or in the Works, including motion sensors and access card readers, to allow parts of the Site and/ or Works, as the case may be, which are not in use to power down and reduce energy consumption whilst unoccupied; and

(m) where the Contractor is a UK Green Building Council member, taking reasonable steps to be added to the UK Green Building Council’s Climate Commitment Platform with a headline commitment to reflect its agreement to implement these Green Working Practices.

* [Drafting note: Users of Ashkan’s Clause may consider what would happen if the rates on the relevant ‘green tariff’ were to become extortionate in practice (although it is not expected that this would happen). In these circumstances, the parties may wish to provide the Contractor with an option to escape the green tariff. The current drafting does contain some safeguards in this respect: 

  • Clause 1 regarding Green Working Practices is an ‘all reasonable endeavours’ obligation, which could provide relief to a contractor if prices became unaffordable. 
  • Further, the Contractor has the ability to propose Alternative Green Working Practices during the course of the Works by giving notice to the employer under clause 2. 
  • Schedule 1: Green Working Practices includes a drafting note stating that parties should agree which Green Working Practices are suitable for the project in question, so requirement [(d)] to purchase on Site electricity from renewable sources could be removed if it is not appropriate in the circumstances.]

Glossary references: Greenhouse Gases (GHGs)

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