- The Energy Mix - https://www.theenergymix.com -

UK Non-Profit Rewrites Business Contract Clauses to Prompt ‘Overnight’ Climate Action

While countless jurisdictions await urgently needed climate legislation, a non-profit in the United Kingdom is building an open library of contract clauses that will allow the corporate, regulatory, and legal sectors to make their own climate and net-zero targets legally binding virtually overnight.

“Contract law may not get the same headline-grabbing attention as blockbuster climate litigation cases brought against feet-dragging governments or polluting oil and gas companies, but it could prove just as crucial to tackling the climate crisis,” writes Business Green. As a device that now underpins so much of human activity and relationships, contracts are an excellent lever for driving climate action. 

That’s why the tagline of The Chancery Lane Project (TCLP) is “Change the Precedent. Change the World.” The UK-based group currently boasts 1,300 legal professionals and 235 organizations all sharing their expertise to help others create what Executive Director Ben Metz calls “climate-aligned” contracts. 

While TCLP is targeting a range of stakeholders, including regulators and lawyers, they are making a particular effort this year to reach out to corporations looking to codify, in legally binding contracts, their recent climate commitments.

Contracts are used in vast swaths of human society: governance structures, procurement and supply chains, the structure and operation of buildings, energy investments, employment, and more. That’s why “introducing climate considerations into these contracts is a practical means for companies to get from a net-zero commitment at board level to the more nitty-gritty considerations of how to decarbonize at an individual building or supplier level,” writes Business Green. 

The strategy of deploying contract law to leverage corporate climate commitments remains surprisingly underused, even though Metz describes it as a “no brainer”. But the practice is gaining traction, and TCLP is helping.

Case in point: U.S. software giant Salesforce, which in April used a number of climate clauses from TCLP’s library to add “binding commitments into its [multi-billion-dollar] supply chain contracts to ensure the suppliers have to set science-based emissions targets by 2024.”

Suppliers will also be required to “publicly disclose their emissions across all scopes, and use offsetting to ensure that all products and services are ‘carbon neutral’,” writes Business Green. With the Salesforce supply chain “contributing more than half of the company’s Scope 3 value chain emissions, the new ‘sustainability exhibit’ appendix attached to its contracts is set to play a major role in its drive to achieve net-zero emissions by 2040.”

Just launched and accessible via TCLP’s website is the organization’s “Net Zero Toolkit”, which contains “contractual clauses you can incorporate into law firm precedents and commercial agreements across the world,” along with “a collection of tools that align contractual drafting with net-zero.”

Business Green says TCLP also plans to host a series of workshops and clinics to raise awareness of how businesses can make their own contracts powerful vehicles for climate action.