Case study


In 2021, the gross capital issuance of the global fixed-income and equity markets was $27.8 trillion. Every issue of a loan, bond, commercial paper or equity presents an opportunity for borrowers, lenders, companies and investors to tackle the climate crisis. These stakeholders can leverage the relevant agreements to reduce greenhouse gas (GHG) emissions and promote sustainable business.

PLMJ is the third biggest law firm in Portugal based on revenue generated in 2021. They provide their clients with the tools to prevent key stakeholders and counterparties in their sectors from acting unsustainably. These tools include 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 fast and fair decarbonisation. PLMJ is a part of this network.

What do TCLP’s clauses deliver for PLMJ?


PLMJ adapted [Noah’s Clause] Green or Sustainability-Linked Lending Requirement for use in at least four live commercial paper programmes (CPP). The CPPs in question cover over €150 million of lending in total.

CPPs are commonly issued by borrowing corporations as requests for unsecured, short-term finance. Lender organisations then respond to these requests, and together the two parties negotiate the conditions of the loan. CPPs are increasingly linked to ‘green’ (sustainability-linked) financing. 

The four CPPs in this case study were responded to by PLMJ’s client, a Spanish multinational financial services company. The issuers of the CPPs were all highly reputable corporations in Portugal, including an influential multinational company managing a diversified portfolio of businesses in retail, financial services, technology, real estate and telecommunications.

Noah’s Clause contains rider clauses for loan agreements requiring lenders to confirm that a percentage of its lending is sustainable or constitutes ‘green’ finance. The clause then provides for alternative penalties if these sustainable requirement(s) are not met. For example, the lender can be replaced (the Default Option) or the margin payment from the borrower to the lender is reduced (the Margin Option). 


PLMJ used the Margin Option mechanisms contained in Noah’s Clause. However, they adapted the mechanisms so that the penalty applied to the borrower instead of the lender. In simple terms, using the clause meant that the borrowers obtained the desired finance at a lower cost, subject to compliance with specified sustainability requirements and key performance indicators (KPIs) relating to GHG emissions. The penalty for the borrowers’ failure to meet the requirements would be a costly increase in the applicable margin payment and interest rates.

PLMJ also used the technical definitions contained in Noah’s Clause to specifically and appropriately define GHG emissions for the borrowers’ requirements. 

Current impact

The CPPs have been live for over 18 months and the Margin Option mechanisms in the CPPs have yet to be triggered. This demonstrates the effectiveness of the clause in disincentivizing unsustainable practices. The application of this clause to borrowers instead of lenders further increases this impact – sustainable behaviour has been contractually imposed onto four borrowers covering different sectors, instead of onto just one lender. 

By using Noah’s Clause, PLMJ’s clients aligned the CPPs with their and the borrowers net zero targets. Use of this clause also ensures that the sustainability elements of the CPPs are meaningful and promote greater transparency within the banking sector.

Bruno Ferreira, Partner at PLMJ, says: 

“TCLP’s climate clauses are a practical and useful solution to mitigate climate change and rewire the economy. Every financing agreement using these clauses represents an opportunity to promote large-scale change towards net zero.”

Future impact

PLMJ intends to continue using different parts of Noah’s Clause for different clients. They envisage that the clause will be used in:

  • lease agreements
  • distribution agreements
  • finance agreements
  • supplier service agreements; and
  • security offerings. 

PLMJ also intends to involve their clients more in the adaptation process of TCLP clauses. This offers new potential for the firm to start climate conversations with their clients and raise their own net zero profile. 

Key takeaways

  • PLMJ uses TCLP clauses to begin climate contracting journeys with their clients: Lawyers at PLMJ have found they have limited information when starting climate contracting journeys with their clients. TCLP’s clauses have provided a useful and reliable starting point for these lawyers, who have then grown in confidence as negotiations with stakeholders have developed. 
  • TCLP clauses can be adapted and used in different jurisdictions: TCLP clauses were initially drafted for use in England and Wales. PLMJ have adapted them to the Portuguese market and legal context. TCLP believes that the adaptation of its clauses for use in other jurisdictions will bring us closer to realising a world where every contract enables solutions to the climate crisis. PLMJ has proven that lawyers anywhere can take the initiative to adapt TCLP’s clauses for their jurisdictions. 
  • One TCLP clause can provide various uses: PLMJ has been able to adapt the clause for application to different stakeholders which has further increased its climate impact. PLMJ also believes that they will use Noah’s Clause for at least six different types of commercial and financial agreements. This is an example of the huge opportunity and value just one TCLP clause can provide to law firms and businesses. 

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