Glossary entry

Offsetting Strategy

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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. 

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.


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.