Climate-Linked Contractual Discretions
Lewin & Darwin’s Clause
Climate-linked contractual discretions creating scope for parties to encourage good environmental practice.
Climate-linked contractual discretions creating scope for parties to encourage good environmental practice.
An interest ratchet mechanism for loan facility agreements that lowers the cost of capital for companies who (directly or indirectly) save carbon in their operations.
Allows a customer to exit a shipping transportation agreement without incurring exit-related liability, unless the incumbent carrier/shipper can match the 'green' improvements of a competitor.
Rider clauses (for LMA facilities agreements) that require each Lender to confirm that a percentage of its lending is sustainable or 'green' finance.
A 'plug and play' clause for use by SMEs in a variety of contracts. Imposes mutual obligations on the parties to take steps towards net zero, with payment of a climate remediation fee for breach.
A series of stepped options for commercial leases that help corporate landlords and tenants generate additional 'green' electrons for the electricity grid where their leasehold property is located.
A set of sustainable soil management obligations allowing businesses to manage their reliance on soil, its functions and related ecosystem services.
A precedent clause for a supply agreement requiring the supplier/ contractor to procure energy from renewable sources.
Amendments to a standard early stage shareholders’ agreement for SMEs that enable investors to hold an SME to account on climate change issues and align all parties’ interests with achieving net zero.
A simplified and consolidated version of TCLP’s existing supply chain clauses, the ‘Net Zero Standard for Suppliers’ can be annexed to any supply agreement, across all sectors and industries.
An underlying framework of green obligations, which target a company’s decision making, internal investments and reporting in addressing material environmental issues for the company.
A clause aimed at reducing the use and wastage of water throughout a company's supply chain by requiring suppliers to provide audit results to the company.
Guidelines to incorporate wider environmental protections into companies’ whistleblowing regimes in line with their adopted policies on net zero.
A net zero focused variation of Arlo’s Clause (ESG Aligned Company Articles) to include in a company’s articles of association, drafted by reference to TCLP’s net zero resources.
A menu of climate aligned practical steps organisations can require their counterparties to take to transition to net zero.
A set of questions that explore the climate position and net zero ambition of an organisation, specifically companies.
Template drafting for board papers with detailed prompts for consideration of the climate impacts of a significant contract/ transaction and the associated climate risks to the business.
A checklist that requests one off or repeated disclosure of a company’s climate-related lobbying, financing, sponsoring and climate leadership activities.
A template shareholder resolution that sets out obligations relating to a company's climate change commitments.
A board paper for building net zero objectives and targets into corporate strategy and for ongoing monitoring and evaluation of a company’s progress against its net zero targets.
Recitals that frame a contract and the intentions of the parties in terms that are aligned with achieving net zero or net negative emissions and Paris Agreement goals.
A Target Product Carbon Footprint budget (which reduces over time) for each product manufactured and supplied pursuant to the contract.
A mechanism that benchmarks a contractor's carbon footprint against the market.
A clause requiring contracting carriers to use energy efficient vehicles for any road carriage under a transport agreement, or otherwise specify that a percentage of road journeys will use green HGVs.
A standardised green supplier contract or clause that can assist organisations in incentivising their supply chain to adopt environmental targets that reduce their Scope 3 emissions.
‘Coolerplate’ generic clauses for every contract: embedding climate issues and net zero targets in the entire contract so that these flow into contract management and the commercial lifecycle.
Creative interest rate remedies by which payments are made either to a “green” cause or an off-setter.
A clause in employment contracts requiring the employer to provide, and the employee to participate in, a range of climate education and awareness-raising interventions.
A net zero/ carbon budget adjustment clause included as part of a completion accounts mechanism to provide “Carbon Certainty”.
Green execution protocols which parties can adopt at the start of a transaction to minimise the carbon footprint of deal execution.
A climate-friendly governing law clause, requiring that the governing law is interpreted in a manner consistent with the objectives of the UNFCCC and the Paris Agreement.
Two similar protocols (litigation and arbitration) with modules which parties can opt into at the start of a dispute to make it lower carbon and greener.
A clause containing mutual obligations to allow all parties to either perform their own obligations in a way that reduces their carbon footprint and/ or require other parties to do so.
Including pro-active disclosure requirements in M&A or investment transactions brings climate targets and aims to the forefront of the minds of management of the target and the buyer/ investors.
Using supply chain contracts to extend positive climate change measures adopted in one country to contracting parties in other countries that may have less of a legislative focus on climate.
A contractual obligation between the parties stating that, in the event of a dispute, parties agree to settle it in a ‘green’ manner.
A share purchase/ asset purchase agreement clause requiring the purchaser to maintain/ improve the target company's green credentials post acquisition, linked to payment from escrow if successful.
Clauses encouraging parties to arbitration to create all documents in electronic form and conduct all hearings remotely/virtually, where possible.
A pro forma scorecard to be incorporated into commercial agreements as a schedule, allowing supply chain sustainability to be viewed through the lens of risk to business continuity.
This clause gives businesses a tool to require their suppliers to use fewer Single Use Plastics (SUP) in the provision of facilities services.
Embeds ‘Repair, Reuse and Recycle’ concepts in procurement / supply agreements for the benefit of the client, end consumer and environment.
A template clause for inclusion in investment documents to financially incentivise management teams to meet targets which are linked to climate change and environmental issues.
Makes the qualifying criteria for receiving finance conditional on setting a net zero target and reflects this obligation in a convertible loan note instrument that incentivises net zero performance.
A due diligence questionnaire which asks the target company to provide information regarding a wide range of climate change-related issues going far beyond the standard compliance-focused questions.
Amendments to a standard early stage shareholders’ agreement which allow investors to hold the company to account on climate issues and oblige all shareholders to support Net Zero.
Additional provisions for standard non-disclosure/ confidentiality agreements (NDAs) to ensure climate change and environmental issues are discussed at the outset of new commercial relationships.
Amendments and additions to standard Force Majeure agreements to ensure contracting parties work together to balance financial risks and avoid unintended adverse environmental and social issues.
A dedicated section in heads of terms precedents so that climate change issues become a key issue for any deal team. This will be particularly relevant where parties have public net zero targets.
Amendments to standard non-leveraged investment documents to focus the founders and investee company on climate change and environmental issues with their products, services, and operations.
A clause that builds ESG considerations into a company’s articles of association.