What do legal clauses and contracts have to do with climate change? Quite a lot actually, according to The Chancery Lane Project’s (TCLP’s) Managing Director Becky Clissmann.
Because they govern almost all commercial activity around the globe, corporate contracts can be a powerful tool to drive climate action in the business world. Plus, unlike regulations and government legislation, they can be changed quickly to incorporate targets.
“Contracts are a well-understood and enforceable mechanism that can be used around the world to set binding obligations and help corporations deliver on the climate targets they have set,” Becky says.
An environmental lawyer with a business development background, Becky has always been concerned about the environment and felt particularly drawn to tackling climate change. She joined TCLP more than three years ago, with the goal of helping more lawyers include climate clauses in their contracts, and fast.
From net zero targets, to actual emissions reductions
In 2020 and 2021, corporations were focused on setting net zero targets. But this year, notwithstanding rising costs and all the bandwidth that it’s taking for businesses to survive in a tough economy, TCLP has seen an emerging understanding that businesses need delivery mechanisms (like climate contracting) to reduce their GHG emissions and become more carbon- and cost-effective.
Science shows we have seven years to halve emissions, so time is the biggest barrier we face. But for lawyers, a literal lack of time each day is a barrier too, and one that TCLP aims to overcome.
“Some of the research we’ve done this year has helped us understand in detail how much of a barrier lawyers' busy schedules are to adding climate wording to contracts,” explains Becky. “But if you sign a contract today with no climate clauses, you are burning the precious time we have and locking in high-carbon, business-as-usual practices.”
To overcome this obstacle, TCLP is focused on making their climate contract pathways as accessible and frictionless as possible. "We’re constantly working on ways to make it easier to understand and use our clauses to make sure that lawyers change their contracts now to give us a chance of hitting the 2030 and 2050 climate targets,” Becky says.
How The Chancery Lane Project is hacking contracts
TCLP has held drafting events, called hackathons, where they gather lawyers from different sectors and practice areas to draft clauses that would 'hack' existing contracts and make businesses take account of climate targets.The drafts are then rigorously peer-reviewed by lawyers from within TCLP’s community who specialise in the relevant practice area, before being finalised. There are currently over 120 TCLP climate clauses and 73 glossary terms available on TCLP’s website that are free for anyone to use.
"If you sign a contract today with no climate clauses, you are burning the precious time we have and locking in high-carbon, business-as-usual practices.”
“All the clauses are given the name of a child in the lives of the drafters,” Becky says, “This helps us focus on the needs of the younger generation whose lives will be most severely impacted by the climate crisis,” says Becky.
TCLP’s most successful clauses include Zoë & Bea’s Clause – a green procurement clause that helps supply chain partners drive down GHGs through collaboration, target setting and reporting – and Aatmay’s Clause, which embeds ‘repair, reuse and recycle’ concepts in procurement or supply agreements.
“Our focus now is to ensure that participants use the clauses in their contracts, and to scale climate contracting globally by supporting the development of teams in new jurisdictions that will adapt our existing clauses,” she says.
New Zealand Green Investment Finance, a green investment bank, has used several TCLP clauses to develop their own bank of adapted climate clauses such as Kaia’s Clause (a climate-purposed NDA clause) and Lauren’s Clause (a green shareholders’ agreement).
For Becky, thinking about the next generation is more than just professional; it’s personal.
“The best thing about my job is that I can tell my kids, nieces and nephews that I tried my best to change the outcome of the climate crisis, so they would not have the worst future that science currently predicts for them,” she says.
And if other members of the legal community want to help?
“The first thing to do is sign up and join our fast-growing community of lawyers and firms who are using the power of contracts to deliver rapid decarbonisation at scale,” she advises. “When you join TCLP, you decide how you want to be involved – using clauses, drafting clauses and maintaining clauses. You can dive into lots of content on the website through our podcasts, blogs and online events. And you can grow your own network of clients, colleagues and contacts within TCLP. It’s all about spreading the word and getting more and more people to use climate clauses in contracts. You’ll be still doing your day job and using the same skills – just with a different focus.”
Whether you work in legal, marketing, HR or any other department, WorkforClimate has the resources, advice and inspiration to help you kickstart your organisation’s decarbonisation journey.
