Buildings are responsible for 25% of all greenhouse gas emissions in the UK. Based on the latest data, this means the built environment produces over 100 million tonnes of carbon dioxide into the atmosphere each year across Britain.
With emissions from buildings being so high, everyone involved in property development and the clean energy market – from private sector developers to SMEs and housing associations – has a key role to play in providing net zero solutions which adapt the built environment to our warming world. This includes lawyers and law firms, as trusted advisors and legal service providers.
Foot Anstey – a top 100 UK law firm – is helping its clients reduce their GHG emissions by introducing them to The Chancery Lane Project’s (TCLP) climate clauses.
TCLP is the world’s largest network of law firms and lawyers working together to provide climate clauses for contracts, to deliver rapid decarbonisation at scale. Foot Anstey are a major part of this network.
What do TCLP’s climate clauses deliver for Foot Anstey?
Foot Anstey uses bespoke versions of TCLP’s climate clauses in multiple client contracts, and regularly advises clients on how to use the clauses to achieve commercial and net zero goals. All the TCLP clauses listed below have been successfully tweaked by Foot Anstey to fit into the relevant commercial or project-specific context for their clients.
Foot Anstey has adapted three TCLP climate clauses for use in engineering procurement and construction (EPC) contracts for clean energy projects:
- Ayshe’s Clause (Transparent Sourcing of Greener, Fairer Renewable Energy): Foot Anstey clients have found Ayshe’s Clause hugely beneficial as it facilitates reporting and due diligence requirements which are increasingly favoured by project funders. Foot Anstey has found that contractors increasingly want to see a price associated with these reporting requirements: so there is a clear link between costs and reporting.
- Tristan’s Clause (Construction Materials: Procurement): Foot Anstey use Tristan’s Clause in construction contracts where the choice of materials is relevant to measuring embodied carbon. On the basis that suppliers of goods and materials are not currently required by law to evidence information on embodied carbon or emissions, Foot Anstey have found that contractors will accept the adapted version of Tristan’s Clause but only in the context of information on embodied carbon/ emissions measurements that is easily available/ obtainable to them.
- Luna’s Clause (Net Zero Aligned Construction Modifications): Luna’s Clause incentivises building contractors to propose ‘Net Zero Modifications’ to project works. Foot Anstey clients have found Luna’s Clause particularly relevant for projects with longer delivery schedules. To offer greater price certainty – which is critical to clients in the current market – Foot Anstey has added drafting to make these net zero modifications subject to a threshold, such as a 3–5% increase over and above the existing contract price.
Foot Anstey has adapted two TCLP climate clauses for use in built environment contracts:
- Mary’s Clause (JCT Energy Efficiency and Environmental Obligations): Mary’s Clause makes energy efficiency a part of practical completion. Foot Anstey can see that the drafting often aligns well with their client’s own brief, and therefore integrates easily into familiar JCT standard form contracts. Hence, this provision is easier to use in contracts.
- Madhavi’s Clause (Modern Methods of Construction (MMC) and Net Zero Provisions for Construction or Development Agreements): Foot Anstey has adapted the sustainable practices and net zero aligned provisions from Madhavi’s Clause for clients use in off-site construction projects involving structural insulated panel systems.
Foot Anstey lawyers use TCLP’s clauses as a ‘hook’ to start climate conversations with built environment clients.
Foot Anstey’s close working relationship with TCLP has been invaluable in raising the firm’s profile in relation to net zero; creating a new platform for Foot Anstey to offer contract solutions and to explain the challenges involved.
Client discussions are developing rapidly. In 2022, more and more Foot Anstey clients have asked the firm about net zero contract strategies, supply chain issues, and contract due diligence.
To answer these questions, Foot Anstey has organised sessions with energy clients, such as renewable companies, and property developer clients, including housing association frameworks. Foot Anstey uses these sessions to brief clients on TCLP and explore options for using climate clauses to embed net zero strategies into their contracts.
Foot Anstey’s associates and trainees on client secondments have used TCLP’s resources as practical tools for in-house net zero discussions and contract strategies.
Overall, the understanding and commercial edge that Foot Anstey has gained by collaborating with the TCLP community, and by putting TCLP’s climate clauses into practice, enables the firm to support its clients more effectively in an evolving market.
To find out more about Foot Anstey’s TCLP learnings, clients are invited to visit: Net Zero Contracts – How to implement them in the Built Environment and The Chancery Lane Project and Foot Anstey: What clause and why?
Foot Anstey clients are increasingly using climate clauses in their contracts:
- Price fluctuations, supply chain issues and long-lead times are common distractions in the built environment and take up a significant amount of time in commercial negotiations. Despite this, Foot Anstey report that they are seeing a growing commitment all-around to embedding climate-aligned clauses in contracts.
- However, introducing climate aligned clauses is still very much an approach that is lawyer-led in response to the client’s brief and discussions with Foot Anstey’s clients.
- Of course, more and more clients, as mentioned above, are requesting conversations with the firm in respect of climate aligned contract provisions, so the firm expects to see client led requests emerging. Clients are also appointing sustainability leads who are enforcing net zero strategies across businesses, the firm therefore believes that this will also drive the change to make it client led in the near future.
- Currently also in construction the technical documentation plays a key role in setting out the specifications for the build, often this includes sustainability related design and product specifications.
TCLP clauses will be accepted with fewer amendments in the future:
Suriya Edwards, a Partner in Foot Anstey’s sustainability and net zero practice, states:
“Use of climate-aligned clauses will develop over time. As the regulatory framework tightens up, and data collection and emissions reporting become the norm, there will be fewer amendments to TCLP provisions in client contracts. What we need is a regulatory landscape which has a carrot and stick approach to implementation (similar to the BSA 2022), which will then see a sea-change in approach to climate aligned contracting.”
Climate clauses will become commonplace across sectors:
- Foot Anstey has benefited significantly from the collaborative environment that exists within the TCLP community. The firm envisages that the frequency of implementation and impact of climate clauses will increase the more they are used by other law firms and market leaders in the renewable, clean energy and property developer sectors.
- As mentioned above, the firm has a close working relationship with TCLP which has provided it many benefits in respect of expanding its advisory service. The provisions that TCLP have established allow the firm to advise clients broadly across the firm’s multi-disciplinary practice specialisms. This is where TCLP is unique in its ability to offer contract solutions across a spectrum of (often interlinked) specialisms such as property, construction, IP and finance.
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