New clauses released following use in major infrastructure project

We have published two new clauses that are being used in live contracts. Tessa’s Clause and Daniel’s Clause work together by:

  • setting and incentivising performance against environmental improvement goals (Tessa’s Clause), and 
  • measuring performance using sustainability-linked key performance indicators (KPIs) (Daniel’s Clause).

The clauses are already being used in a live contract for a significant infrastructure project in the UK. We have anonymised them for wider use in the market.

While originally written for a construction project, the environmental improvement goals and incentives in Tessa’s Clause and the KPIs in Daniel’s Clause can be adapted for any contract which aims to incentivise the achievement and/or reporting of environmental performance. 

Jo Guy, Environment and Sustainability Manager at the Environment Agency, says:

“The Environment Agency is pleased to share with TCLP recent work enabling sustainable outcomes. Aligned to the Agency’s organisational sustainability strategy, and with simple transferability, Daniel’s and Tessa’s Clauses demonstrate how strategic objectives can be brought to life in delivery. Encompassing net zero, circular economy, net gain and social value, Daniel’s and Tessa’s Clauses have been developed to drive sustainable delivery at project & programme level and enable innovation within the contract period to make delivery even more sustainable.”

[Tessa’s Clause] Sustainability Enterprise Delivery Measures within Construction Works Task Orders

When should the clause be used?

Tessa’s Clause is for contracts entered into by an employer and contractor in a construction context. It is based upon the NEC4 standard form but is predominantly bespoke.

How does the clause work?

Tessa’s Clause sets enterprise delivery measures (EDMs) to drive performance on sustainability. The contractor shares the Red-Amber-Green (RAG) status they think they have achieved in respect of each measure and provides evidence for such performance.

The employer reviews the evidence and assesses the RAG status. After a final RAG status is determined, the calculation of incentivisation follows. 

[Daniel’s Clause] Sustainability Key Performance Indicators in Construction Works Task Orders

When should the clause be used?

Daniel’s Clause is also based on the NEC4 standard form and is for contracts entered into by an employer and contractor.

How does the clause work?

The clause identifies six KPIs for the contractor to measure and report to the employer on its performance. Each KPI has clearly defined parameters and, where possible, a proposed mechanism for measuring performance. 

Daniel’s Clause includes an annual performance target increase, whereby the objectives against each metric are adjusted to drive performance improvements during the contract term. The contractor shares the raw data score for each objective. 

We are currently welcoming new clauses that are being used in contracts. If you are using climate provisions in your contracts that add something new to our collection of climate clauses, please let us know!