Buro Happold

Using standard terms & conditions to initiate decarbonisation in the built environment sector

Buro Happold is an international professional services firm providing design, engineering and consulting services for the built environment. Sustainability is a priority for the business. Buro Happold ensures their work aligns with its operational decarbonisation goal to achieve net zero by 2045 by monitoring projects regularly.

What do TCLP’s clauses deliver for Buro Happold?

An increasing number of built environment stakeholders are implementing climate contracting principles as standard, either as sustainability criteria in the contract scope or in the standard terms. To meet this market demand, and to ensure their own sustainability goals are not compromised, Buro Happold’s in-house legal team integrated climate obligations into its own standard terms. 

Buro Happold adapted Nico’s Clause ‘Coolerplate’ Clauses (Climate Aligned Boilerplate) for their UK standard terms and conditions. The company uses these terms and conditions for appointment contracts, across a wide array of disciplines, clients and projects.

Buro Happold selected three obligations from Nico’s Clause to form part of their terms and conditions:

1. An agreement to minimise the carbon footprint of the parties’ activities when performing obligations under the contract.
2. Where actions under the contract may have an adverse climate outcome, or impact individuals or communities, then the impacted party has a right to be consulted. This encourages the wider construction industry to listen to the risks faced by community stakeholders during the project lifecycle, and inspires the consideration of alternative approaches to design, with an emphasis on minimising impacts to the climate.
3. An agreement to send communications relating to the contract electronically. Making electronic communication the norm avoids both the carbon and water footprints of printing documents and the greenhouse gas emissions associated with postal delivery.

After internal stakeholders ensured that the obligations aligned with the company’s wider ESG strategy, the legal team adapted the TCLP clauses. Buro Happold’s standard terms are generally used for private sector clients and focus on the design stage of work which is most impactful in setting the tone for the overall project. These contracts carry a value from £1,000 to over £50,000, with several major clients using them on a regular basis.

Current impact

Buro Happold sets an example across the high-emitting built environment sector by making climate contracting principles a part of their standard terms. This helps the company manage its scope 3 emissions and encourages suppliers to set their own emissions targets.

During the negotiation stage, Buro Happold provides the standard terms to the other party for review. The clauses are not marked for special attention, and are treated akin to any other provision within the contract. Buro Happold reports that there has not been any push back on the climate obligations from its counterparties. Senior management and leadership at the company have offered their endorsement of these obligations.

Future impact

Buro Happold views the introduction of these clauses as the starting point of a journey towards improving the sustainability of the built environment sector. In addition to TCLP, the company took inspiration from the World Green Building Council’s guide ‘Climate Change Resilience in the Built Environment’, providing action points for developing a strategy for climate adaptation. 

When Buro Happold enters into a contract on other parties’ standard terms, they review those terms to ensure that they align with their ESG aims and ambitions. The company is considering incorporating climate contracting principles into its standard review and negotiation checklist for contracts, ensuring that the use of another party’s standard terms does not permit ESG obligations to slip through the net. 

Buro Happold plans to consider whether each project should have a dedicated sustainability manager, who actively manages sustainability-related obligations. Consultants face constraints in adopting climate clauses dictated by their professional indemnity insurance policies’ terms and conditions. This poses a challenge in balancing risk and insurability, but the collective drive of stakeholders in the field to achieve environmental sustainability will mitigate this issue. 

Key takeaways

• Climate contracting principles are already being adopted in the built environment. There has been no pushback on any of the contracts entered into on these standard terms. Buro Happold observes that other parties’ contracts often contain sustainability criteria or objectives. Given that the built environment generates almost 40% of global energy-related C02 emissions, there is an urgent need for all sector professionals to translate their climate ambitions into meaningful and measurable contractual obligations.
• Standard terms and conditions are an excellent gateway into climate contracting. The process of adding boilerplate climate provisions to standard terms is straightforward, and Nico’s Clause contains a range of precedent clauses for this purpose. The wide use of standard terms in the built environment sector is an opportunity to incorporate such clauses into contracts on a large scale.
• Parties can advocate for climate clauses during the contract review process, in addition to drafting their own. Using other parties’ terms should not be an excuse for ESG considerations to be excluded. Organisations can challenge other parties’ who do not provide climate clauses as standard. Make this a key factor in the contract review process. 

For more climate contracting resources, please see TCLP’s built environment clauses and resources and sign up to our mailing list here.