Green contracts initiative shifts focus to adoption

Gingell: Fair and fast decarbonisation through climate contracting

The Chancery Lane Project (TCLP), a global collaboration of lawyers fighting climate change through model contract clauses, has shifted its focus from “clause creation to clause use”.

The UK-based organisation said it had created 160 contract-ready climate clauses and its latest survey found that almost six out of 10 legal professionals had used “some form of climate provision in their contracts”, in most cases influenced by the project.

TCLP described in its 2023 Impact Report the shift to adoption of contracts as “our biggest development” this year.

“We have reduced our focus on creating new content, in favour of spending more time supporting companies to use clauses in their contracts.

“Use of the clauses triggers a snowball effect, encouraging other organisations to take action. We have a rapidly expanding community of champions using our content, improving it and supporting others to do the same.

“Our work is beginning to set new market norms in the field of contracting. Market development will continue to be a focus of our efforts going forward.”

TCLP said its bank of clauses provided “many avenues to decarbonise” for most sectors and industries.

“Getting clauses into use is more complicated than drafting clauses. It involves managing relationships, accepting increased costs and changing the way business is done in live contracting situations.”

TCLP said it was drafting guides for lawyers and businesspeople which “extract the relevant concepts from the clauses” and which were being tested by small working groups,” and would be available to the public in due course.

A survey for the report of 62 legal professionals found that 58% had used “some form of climate provision in their contracts and/or legal documentation”.

Seven out of 10 of those who had used the provisions rated the influence of TCLP over them in doing this at four out of five.

When asked how TCLP had influenced their organisations, the most common theme from lawyers was facilitating climate contracting.

“Of those who gave this as the key influence, nearly 80% were already using clauses in their contracts. Those who have not yet used clauses, all indicated that they have clauses earmarked for use in the near future.”

Almost half of the lawyers using green contract clauses were “actively monitoring compliance”, while 70% had some “form of breach mechanism in place” if things went wrong.

This highlighted that “lawyers and their clients are seeing climate as a serious risk”, warranting non-compliance penalties.

“This reflects a commitment to encouraging each of the parties to improve their sustainability, rather than using climate clauses as an excuse to issue termination.”

TCLP said it has 37 active working groups across the world, including in Germany, the USA, the Middle East, Hong Kong and New Zealand.

It described itself as “the largest global network of lawyers and business leaders using the power of climate contracting to deliver fast and fair decarbonisation”.

Matt Gingell, co-founder of TCLP and general counsel at Oxygen House Group, said: “It is imperative that businesses, investors, and the lawyers that advise them are determined to deliver a ‘Paris-aligned’ future.

“Climate contracting provides a fast, bespoke, and legally enforceable way for everyone to follow that trajectory. That’s what we set out to achieve with TCLP – fair and fast decarbonisation through climate contracting.”

TCLP was launched in November 2019 in London and published its first model contract clauses in February 2020.

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