Updates to [David’s Clause] SME’s Net Zero Objectives

We have updated [David’s Clause] SME’s Net Zero Objectives.

What is David’s Clause?

David’s Clause imposes mutual obligations on SMEs and their counterparties to take steps to transition to net zero. If a party breaches its climate obligations in the clause, the other party can nominate a climate charity for the party in breach to pay a climate remediation fee to.

Why use it?

This clause can be used to add net zero obligations to a variety of contracts. This will help small and medium-sized enterprises (SMEs) to deliver their net zero targets. As the clause is designed to be ‘plug and play’ it requires little adaptation and will be quick and simple to use.

What has changed?

Defined terms: We have updated the following defined terms to align them with the most up to date version of our Writing contracts for net zero – definitions and sample wording document:

  • Carbon Footprint 
  • Net Zero Target 
  • Net Zero Transition Plan 

Obligations: We have also:

  • added wording to clause 1.1.2 to impose an obligation on the SME management team to review and approve the Net Zero Transition Plan annually; and 
  • amended clause 2 to include an obligation to remedy the breach within three months of the breach occurring and related provisions.

Stylistic changes: Other changes have been made to reflect our clear drafting principles and to align this document with TCLP’s house style guide.