Offsetting Strategy
Disclaimer - please read
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.
The definitions 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 definitions 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 definitions 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 definitions, 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 definitions or any other person. Users should use their own professional judgement in the application of these definitions to any particular circumstance or jurisdiction or seek independent legal advice.
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.
Definitions
Offsetting Strategy
Offsetting Strategy means a plan specifying:
(a) the verified credits from a recognised O[o]ffset P[p]rovider that may be used by [the Company] to offset its Residual Emissions;
(b) how [the Company] will [transition:
(i) from using credits from offsetting projects that avoid or reduce emissions of GHG to projects that remove emissions of GHG; and
(ii) to GHG removals that involve long-term storage methods with a low risk of reversal;
(c) how [the Company] will reduce its use of credits by reducing its Residual Emissions [by [x] %] by 2050; and
(d) the impact of the relevant offsetting projects on a just transition and wider social and environmental goals.
Related Terms
Drafting notes
See TCLP’s Offsets, Insets and Credits Explainer for more information about carbon credits purchased from regulated and voluntary markets, as well as what drafters need to consider when including offsetting in contracts.
Drafters may choose to define the last item referring to a just transition and wider social and ecological goals. If it is not defined, it may be difficult to enforce because, depending on the agreement, it may be unclear what this looks like.
Application
Corporate climate policies, supply chain agreements, climate laws, investment and finance documentation.
Offsetting Strategy is used in the following TCLP clauses:
[Alexandro’s Clause] Net Zero Sponsor Activation Clause;
[Cassie’s Clause] Insurance: Disclosure and Mitigation of Pending Climate Change Litigation;
[Dottie’s Clause] Climate Purchase Agreement and Underwriting Sponsor Warranties;
[Emma’s Clause] Green Residential Lease Clauses;
[Owen’s Clause] Net Zero Target Supply Chain Cascade Clauses;
[Pasfield’s Clause] Paris Aligned Company Articles;
[Rose’s Clause] GHG Emissions Management Plans in Infrastructure and Construction Project Finance; and
[Sebastian’s Clause] Entire Business Net Zero Objectives.