Model clause

Climate Purposed NDA Terms

Kaia's Clause

Additional provisions for standard mutual non-disclosure/confidentiality agreements (NDA) to ensure climate change and environmental issues are discussed at the outset of new commercial relationships.

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Why use this?

It is common for a business to sign hundreds if not thousands of NDAs each year. Therefore, this provides a unique opportunity to raise climate issues in numerous and varied scenarios across all sectors of the economy.

This drafting will be particularly relevant where one or both of the parties has a publicly stated net zero target.

How it promotes a net zero future

The clauses will ensure climate change is considered from the earliest part of a commercial relationship. In effect, it will help to make climate change a mainstream topic within commercial teams.

The clauses will also:

- Set the tone for future documentation should the parties progress to a more formal relationship.

- Allow boards to demonstrate how climate change was considered as part of every commercial relationship and thus demonstrate its commitment to a Net Zero business strategy, Corporate Social Responsibility (CSR), and Environmental, Social and Governance (ESG) factors, whilst also potentially mitigating the risk of future liability relating to climate change.

Disclaimer - please read

The clauses 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 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.

The clauses 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 clauses 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 clauses 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 clauses, 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 clauses or any other person. Users should use their own professional judgement in the application of these clauses to any particular circumstance or jurisdiction or seek independent legal advice.

At present, all the clauses are based on the laws of England and Wales. We encourage the conversion of these precedent clauses for use in other jurisdictions.

The clause

[Insert the additional recital] 

BACKGROUND

(A) The parties have agreed to consider the Climate Change Purpose as part of the discussions relating to the Commercial Purpose.

[Insert additional definitions (or add to existing definitions clause)]

1.1 Definitions:

Climate Change Adaption Measures means the measures taken or that could be taken by the Parties and their supply chains to achieve the Commercial Purpose whilst avoiding or minimising the actual or anticipated effects of climate change.

Climate Change Mitigation Measures means the measures taken or that could be taken by each of the Parties and their supply chains to reduce their respective Greenhouse Gas emissions and to meet their Net Zero targets.

Climate Change Purpose: means the consideration of Climate Change Adaptation Measures and Climate Change Mitigation Measures as part of every potential commercial relationship.

Commercial Purpose: [Insert Purpose of the NDA ie Discussions about X, consideration of Y, provision of Z]

ESG: Environmental, Social and Governance factors and standards forming a [published] policy or objective of a party.

Greenhouse Gas means gases that contribute to or accelerate the greenhouse effect by absorbing infrared radiation, including but not limited to: carbon dioxide, methane, nitrous oxide, sulphur hexafluoride, hydrofluorocarbons, perfluorocarbons and chlorofluorocarbons.

Net Zero means that the balance between Greenhouse Gas emissions from all operations and Greenhouse Gas removals, including those accounted for by credits from either insetting or offsetting projects, is zero.

[Insert new Clause (or add to or adapt existing purpose clause)]

  1. The Purposes

2.1 The parties shall, as part of their discussions and negotiations concerning the Commercial Purpose, discuss and consider how the Climate Change Purpose can be achieved as part of any future commercial relationship arising from those discussions and negotiations.

2.2 When considering the Climate Change Purpose under clause 2.1 the parties shall disclose and consider:

(a) their respective Net Zero targets; and

(b) their relevant ESG characteristics and commitments.

2.3 Any information disclosed by one party to the other in connection with the Climate Change Purpose shall be treated as the disclosing party’s Confidential Information (and therefore subject to the applicable use and disclosure restrictions in this agreement), save that such information may be used by the recipient (but not disclosed to any third party) to make progress against its Net Zero target or ESG goals.

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