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The definitions 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 definitions 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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At present, all the definitions are based on the laws of England and Wales. We encourage the conversion of these precedent definitions for use in other jurisdictions.
Environmental Performance means the performance of the Company [and its Affiliates] against the following environmental key performance indicators:
- Scopes 1, 2 and 3 Emissions, which will be measured in accordance with [The Greenhouse Gas Protocol – A Corporate Accounting and Reporting Standard / the Global Reporting Initiative (GRI) Standards (305)];
- Environmental Management Systems, which will be measured in accordance with the requirements of [ISO 14001];
- Impact on Biodiversity, which will be measured in accordance with [the International Union for Conservation of Nature Guidelines for planning and monitoring corporate biodiversity performance / International Finance Corporation’s Environmental and Social Performance Standard 6 – Biodiversity Conservation and Sustainable Management of Living Natural Resources / GRI Biodiversity Standard (304)];
- Energy Consumption, which will be measured in accordance with [GR1 Energy Standard (302)];
- Waste Production, which will be measured in accordance with [International Finance Corporation’s Environmental and Social Performance Standard 3 – Resource Efficiency and Pollution Prevention / DEFRA Environmental Key Performance Indicators – KPI 12 / GRI Waste Standard (306)];
- Emissions to Water, which will be measured in accordance with [DEFRA Environmental Key Performance Indicators – KPIs 7-8]; and
- Emissions to Land, which will be measured in accordance with [DEFRA Environmental Key Performance Indicators – KPIs 9-11 and 13].
- Emissions to Air, which will be measured by the [UK and EU Air Quality Limits]
The Company’s performance will be measured by an Independent Expert, appointed by the Parties in accordance with Clause [x], who will publish a report on the Company’s performance every [quarter/month].
Option 2 (Real Estate context)
Environmental Performance means all or any of the following in relation to the Premises, the Building and/or the Estate:
(i) the source of materials;
(ii) the use of materials;
(iii) energy sources and consumption;
(iv) water sources, consumption and discharge;
(v) flexibility, durability and resilience;
(vi) pollution and waste processing;
(viii) landscape and ecology;
(ix) deconstruction and disposal;
(x) waste generation and management;
(xi) Greenhouse Gas Emissions; and/or
(v) other adverse environmental impacts.
Model laws definition
Environmental Performance means the state of sustainability of a country as measured by the Yale Center for Environmental Law and Policy using 32 performance indicators across 11 issue categories covering environmental health and ecosystem vitality and set out in its Environmental Performance Index.
Environmental Performance is a broad term that requires consideration of a number of factors.
Option 1 provides some ideas for factors that could be taken into account. Drafters can add, remove or adapt them depending on the specific context.
Option 1 also provides some ideas for specific standards against which each factor can be measured. If the parties wish to determine their own metrics these could be set out in a Schedule. In this case, the metrics should be quantitative where possible and the Schedule should clearly set out how they are to be calculated.
Measuring environmental performance should not be a tick-box exercise and available budget and resources need to be considered when choosing the method of measurement. A relevant question is whether any financing needs to include the costs of such assessments.Consideration should also be given to any drafting necessary to deal with an Independent Expert e.g. how he/she should be appointed and how any disagreements about his/her appointment or findings will be dealt with.
Company reports, financing agreements, supply chain contracts and other agreements where a certain level of environmental performance is required or environmental performance is to be monitored over time.
This is likely to be found in situations where one party is providing finance or services to another on certain conditions (e.g. loan or lease agreements) or where one organisation is trying to maintain environmental performance throughout its branches or supply chain (e.g. franchising and IP licensing agreements and supply chain agreements).
Emma’s Clause (Green Residential Lease)