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.Skip to clause
Why use this?
The clause seeks to drive engagement with existing industry standards and requires the parties to agree clear, specific practices at the outset that result in energy savings or other positive environmental impacts throughout the build phase.
The incentive is by way of a Green Retention Fund, which the contractor will be entitled to a distribution from on a sliding scale depending on the level of compliance it demonstrates throughout the works. The balance of any retention at practical completion will be distributed to an agreed climate-focused charity.
This means the clause is revenue-neutral for the employer.
How it promotes a net zero future
The aim is to entrench sustainable working practices in the industry. The climate crisis is often described as a large-scale, international issue which can dissuade smaller players from properly engaging. In contrast, issues that impact the local environment, to which individuals often feel they can more closely relate, can elicit more of a reaction.
By placing the onus on those actually delivering the works on site, individuals and companies are encouraged to take ownership for their climate impacts in their day-to-day work. Many construction companies now have green mandates and such a clause should ensure those mandates flow down to every project in which the company is involved.
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.
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.
Electrification means converting or replacing infrastructure, machines, appliances, devices and other objects which are powered by a Finite Power Source so that electricity is used as a permanent replacement power source.
Energy Efficient Equipment means tools and equipment which achieves Energy Savings and associated Greenhouse Gas emission reductions and includes (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.
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 Practices means the working practices set out in Schedule 1, as updated from time to time.
Greenhouse Gases (GHGs) means the natural and anthropogenic gases which trap thermal radiation in the earth’s atmosphere and as specified in Annex A to the Kyoto Protocol to the United Nations Framework Convention on Climate Change (UNFCCC) [or otherwise specified by the UNFCCC at the date of this agreement]. [These GHGs are currently: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulphur hexafluoride (SF6), and nitrogen trifluoride (NF3).]
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 Working Practices Report has the meaning given to it in Clause 1.3.
Green Working Practice Notice has the meaning given to it in Clause 2.1.
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 in order to record the GHG emissions reductions as a result of 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  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 for the avoidance of doubt, 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 Work 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  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 COMPLIANCE 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 % 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 % 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 % 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 what particular (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 % 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) the Electrification of at least % of construction tools on Site and at least 60% of energy using equipment at Site to be Energy Efficient Equipment;
(e) 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;
(f) reducing noise pollution created while carrying out and completing the Works (including but not limited to limiting the use of on-site diesel generators);
(g) engaging employees [and subcontractors] based within a  mile radius to the Site where possible;
(h) 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);
(i) minimising the impact of any excavation works on the area surrounding the Site;
(j) 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];
(k) 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
(l) 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.
Glossary references: Greenhouse Gases (GHGs) & GHG Emissions