Field

Implementing climate clauses in the energy sector

Field is committed to tackling the climate crisis by developing, building, and operating large-scale battery storage sites, in the UK and into Europe. By enhancing grid reliability and flexibility, Field enables a transition to green energy, reducing reliance on carbon-intensive generation and facilitating the scalability of renewable energy sources like solar and wind.

As part of this effort, Field worked with The Chancery Lane Project (TCLP) to draft an interest ratchet clause called the Laith & Irsa clause. The organisation is also in the process of adopting a set of climate clauses that are progressively being incorporated into their contracts. They are actively reviewing and adapting elements from TCLP clauses, including:

What were they looking to achieve?

The organisation’s main objectives for adopting climate clauses include:

• Achieving net zero emissions as a green energy company.
• Enhancing their contract approach by ensuring that the construction and operation of their assets align with their sustainability goals.
• Facilitating tangible outcomes in carbon savings through improved supply chain practices. 

“At Field, our commitment to achieving net zero emissions is not just a goal – it’s an ongoing journey that requires innovation and consistent collaboration. By seeking to integrate enhanced climate clauses into our contracting process, we are not only aligning our business practices with our sustainability objectives but also helping to pave the way for a greener future. This proactive approach empowers us to measure our impact and engage our supply chain in meaningful ways, ultimately contributing to a more sustainable energy landscape,” said Jonathan Culley, Senior Legal Counsel at Field. 

The size of their supply chain

The organisation’s supply chains are highly intricate, spanning multiple stages from the extraction and processing of minerals to manufacturing steps often conducted in different locations before final assembly – and through to the physical construction and operational stages of our battery energy storage system (BESS) projects. 

This extensive network involves collaboration with leading Chinese battery manufacturers, focusing on supply chain due diligence to ensure ethical sourcing and compliance with environmental and social standards.  It also partners with UK-based civil and electrical firms to support local operations. Currently, the organisation works closely with several primary contractors and has strong growth plans. Field conducts comprehensive carbon reporting across Scope 1, 2, and 3 emissions, with climate clauses supporting timely and comprehensive data collection. This approach, supported by climate clauses, aligns with industry best practices for transparent reporting and effective emissions reduction.

Implementation of climate clauses in contracts

Field discovered TCLP before adapting its climate clauses. Members of their legal team participated in various events (including hackathons culminating in new clauses being drafted for example Aatmay’s clause) contributing to broader sustainability dialogue within the legal community.

Timeline:

1. Identification of key resources: Engaged with TCLP for specific clauses relevant to their operations.
2. Internal discussions: Encouraged conversations within the legal team and among external stakeholders about the importance and benefits of climate clauses.
3. Adaptation of clauses: Integrated relevant elements from TCLP’s resources into their contracting processes (including at contract heads of terms level to help embed expectations early in the contracting process).
4. Feedback mechanism: Collaborated with industry bodies to refine how they calculate carbon avoidance and standardise reporting methodologies.

The implementation of climate clauses has sparked increased dialogue within Field’s legal team and external stakeholders. Engagement with organisations like the Law Society in a TCLP representative capacity, which circulates information on circular economies and green clauses, helped elevate the conversation around sustainable contracting practices.

Benefits of climate contracting

Field experienced several benefits from its climate-aligned approach, including:

• Improved alignment between contracting practices and sustainability goals.
• Increased awareness and proactive discussions around climate impact among stakeholders.
• Enhanced reporting capabilities for carbon emissions, fostering accountability and transparency.

Stakeholder sentiments

The shift towards climate-aligned contracting is seen as an essential evolution, driven by internal and industry motivations rather than legislative mandates.

Feedback from stakeholders indicates a desire to engage with climate clauses, though Field is still in the fairly early stages of broader adoption. Their future BESS construction contracts are anticipated to incorporate these clauses, with conversations among private practitioners suggesting that similar approaches are gaining traction in the market.

Granted there remain some concerns about the costs associated with carbon consulting for example, and overcoming some resistance to the implementation of liquidated damages for contractors failing to meet additional climate-related targets. However, discussions around incentivising positive behaviours and ensuring transparency have fostered a more supportive environment for climate initiatives.

Advice for other organisations

1. Embrace the initiative: Be prepared to roll up your sleeves and engage with the adaptation of climate clauses actively.
2. Tailor approaches: Customise clauses to align with your company’s market position and contractor capabilities.
3. Evaluate impact and feasibility: Focus on areas where you can have the most immediate influence and avoid merely following trends.
4. Communicate effectively: Ensure that all stakeholders understand the importance of these clauses and their impact on sustainability goals, and promote the use of enhanced climate-related provisions as fundamental (and not “nice to have”). 

Field’s commitment to integrating climate clauses into their contracts reflects a broader trend towards sustainability in the energy sector. Through ongoing collaboration, adaptation, and stakeholder engagement, they are helping to pave the way for meaningful impact in the transition to a net-zero future.