New climate clauses for Aotearoa New Zealand
We have published a suite of ten new clauses, adapted for use in Aotearoa New Zealand. Spearheaded by New Zealand Green Investment Finance (NZGIF), a group of Aotearoa New Zealand’s top law firms have collaborated to adapt a number of TCLP climate clauses, most suitable for their jurisdiction.
Hannah Bain, Special Counsel (Climate Change) at Russell McVeagh, said “Contractual drafting is an important lever for organisations seeking to measure and manage their emissions. We see these clauses developed with NZGIF as a handy tool in the climate toolbox, for example when looking to drive impact through an organisation’s supply chain.”
The new clauses
The clauses span a number of practice areas and sectors, as well as a range of climate ambition – from light to dark green.
Boilerplate (for all relevant documents)
[Liam & Isobel’s Clause] Green Dispute Resolution (adapted from Toby’s Clause): any dispute must be handled in a manner that minimises travel and reduces the use of paper.
[Arthur & Charlie’s Clause] Electronic Notices: any notice required under the agreement must be delivered in a manner that minimises travel and reduces the use of paper.
[Dominic & Bria’s Clause] Further Assurances (adapted from Nico’s Clause): requires parties to take reasonable steps to minimise GHG emissions when performing its contractual obligations.
[Alysha & Daniel’s Clause] Electronic Signatures (adapted from Nico’s Clause): requires the parties to sign documents electronically to avoid the need to print copies.
Shareholders’ agreement
[Devika & Kavi’s Clause] Electronic Board Meetings: requires directors to endeavour to hold meetings electronically in order to minimise travel and the need for printed documents.
[Mackenzie & Maggie’s Clause] Carbon Neutral Agreement Clause: requires the shareholders to work towards operating the company in a carbon neutral manner. Suitable for a company starting its emissions reduction journey, or a new/ fast-growing company that lacks a good understanding of its emissions profile.
[Marguerite & Annabelle’s Clause] – Ambitious Carbon Neutral Clause (adapted from an extract of Lauren’s Clause): enables shareholders to embed environmental, social and governance matters at the highest level of the company, and prioritise them over short term fast growth to deliver better performance and long term value.
Supply agreement
[Katie & Ben’s Clause] Termination for Greener Supplier (adapted from Annie’s Clause): gives customers a right to switch suppliers if the existing supplier is unable to match a ‘greener’ offer from an alternative supplier.
[Dharana & Keshan’s Clause] Emissions Notification Obligation (adapted from Sebastian’s Clause): requires the parties to measure their emissions and report on them in line with the climate reporting framework in Aotearoa New Zealand’s Financial Reporting Act 2013. It also requires parties to take steps to reduce their carbon footprint.
Commercial lease agreement
[Campbell & Zaynah’s Clause] Property Clause (adapted from an extract of Emma’s Clause): requires the parties to understand the environmental performance of the building, to improve that performance, and to use the building in a way that is more environmentally friendly.
NZGIF has used the clauses in a number of investment agreements, lending documents and shareholders’ agreements, adapting them to suit the needs of stakeholders. Read their full case study here.
Ian MacKenzie from NZGIF, said “The Climate Crisis is too big to be solved by one country, or a handful of governments, or a few large companies. It will take everyone working together, doing all the little things they can, to achieve our global aim of a 1.5°C world. That’s what is so powerful about climate clauses – they can shift the dial by influencing the thousands of contracts entered into every day to be performed more sustainably. The TCLP initiative is a great way for lawyers to do their bit for our planet just by doing their day jobs.”
Contributing law firms: Anderson Lloyd, Anthony Harper, Bell Gully, Buddle Findlay, Chapman Tripp, Core Legal Solutions, DLA Piper, Lane Neave, MinterEllisonRuddWatts, Russell McVeagh and Simpson Grierson.