New JCT 2024 – Sustainability / ESG
The new JCT Design and Build contract, 2024 edition has been released, and as we have seen, there have been a number of updates to the form of contract. One of those updates has been to make the previously optional obligations in relation to sustainability, mandatory.
The 2016 edition of the Design and Build contract contained “Sustainable development and environmental considerations” as Supplemental Provision 8, allowing the parties to the contract to decide whether those provisions would be applicable, or not.
The wording of Supplemental Provision 8 has been moved, so is now to be found in clause 2.1.5 of the 2024 edition. The clause reads:
“The Contractor is encouraged to suggest economically viable amendments to the Works which, if instructed as a Change, may result in an improvement in environmental performance and sustainability in the carrying out of the Works or of the completed Works and a reduction in environmental impact, provided that no such instruction shall extend the Contractor’s obligations in relation to design under this Contract.”
The addition of “sustainability” and “reduction in environmental impact” are the only drafting amendments, along with the clarification that any such instruction shall not extend the Contractor’s design obligations. This clarification will need to be reviewed if the Contractor is taking on responsibility for all design, including that in the Employer’s Requirements (which is common in design & build contracts). In such circumstances, the clause will need to be amended to make it clear that the Contractor will also take on all design responsibility pursuant to any Changes which are instructed as a result of the Contractor’s suggested amendments under that clause.
It was initially disappointing to see such minimal changes in respect of what is such an important and necessary consideration in today’s construction market. We are continuously being reminded of the carbon impact of the industry and all acutely aware of our need to strive towards the government’s goal of zero carbon.
On Wednesday, JCT hosted a webinar in which the hosts discussed the intentions behind the amendments. The changes are to bring the contracts more in line with the Construction Playbook as well as industry focus. The Construction Playbook, published in 2020 and updated in 2022, primarily aimed to assist the industry in recovering from the pandemic, but also to provide guidance for achieving best practice going forwards. The improvement of building and workplace safety are clear objectives, with the ultimate aim of building back “better, faster and greener”. Sustainability therefore features heavily in the Playbook.
It was explained that following a thorough review of the existing JCT contracts, it was decided that they did comply with the Construction Playbook’s themes, but that some improvements could be made by adding greater emphasis to those themes, including sustainability. This is how the decision was taken to make the previously optional provision mandatory. At the same time, this wouldn’t burden the industry with new drafting to get to grips with.
It was further clarified in the webinar that JCT had concluded that most issues regarding sustainability would generally be allowed for and dealt with in any pre-construction services agreement. We are therefore informed that there will be more provision for this in the PCSA, and that the PCSA guidance will elaborate further on whether additional drafting should be added to the PCSA. We understand that model drafting will also be provided in the guidance document and will cover obligations in relation to improving performance, enhancing sustainability within the design and reducing waste and emissions. If however a PCSA is not being used, there may be the option to use such amendments within the main contract.
Although it is a bit frustrating that the drafting has mostly remained the same, meaning the Contractor is only encouraged to propose amendments to the works which may result in an environmental related improvement, making the provision mandatory is still a step in the right direction. Further analysis and assessment will need to be reserved until the updated PCSA and PCSA guidance has been released, which we look forward to reviewing.
This article first appeared in Construction Index
