updated on 27 September 2023
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The Chancery Lane Project (TCLP) has drafted 10 climate clauses to use in commercial agreements and legal documents under US law. This is significant as law firms across the globe work towards doing business more sustainably.
Becky Annison, TCLP’s head of engagement, emphasised that “contracts, once signed, lock in carbon emissions for the duration, so early insertion of climate clauses is vital”, which is why “many lawyers now realise the power of contracts to make or break climate goals and manage climate risk and are gearing up their teams to take action”.
The recent TCLP climate clauses provide obligations and clauses that can be added to contracts in 10 different areas, from renewable energy to deforestation. For example, Madeline’s Clause provides a list of obligations to regulate sustainable soil management. This clause begins by defining key terms, such as ‘biodiversity’ and ‘brownfield site’, and outlines policy for maintaining soil sustainably, from staff training policies to landowner obligations to offsetting.
The introduction of these clauses follows guidance published by the Law Society of England and Wales in April, which suggested that lawyers may refuse to work with businesses that don’t meet their net-zero policies. This was prompted by a pledge signed by lawyers to refuse working with fossil fuel projects. The guidance raised questions about how law firms can provide advice to businesses to aid sustainability. Lubna Shuja, president of the Law Society, said: “The effects of climate change –even on legal practices – are wide-ranging and constantly evolving. Solicitors should be aware of this changing landscape and its potential impact upon their organisations, as well as on the legal advice they provide.”
Annison hopes that TCLP’s clauses will “pave the way for new legal solutions to climate issues in American contracts as they do in the UK”. She highlights the importance of introducing these clauses as “the risks of climate crises are felt more deeply year on year”.