Climate clause

Choice of Green Governing Law Clause

Leo & Molly's Clause

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.

This is a net zero clause

This clause aligns with Paris Agreement goals, Race to Zero requirements and the Oxford Principles for Net Zero Aligned Carbon Offsetting. For tools and support to use this clause, use our toolkit or join one of our events.

Skip to clause

Why use this?

Contracting parties can ensure that, whatever governing law is chosen to resolve disputes arising from the contract, that law will be construed in a manner consistent with the goals of the Paris Agreement and the manner of dispute resolution shall also be Paris aligned.

The clause

Additional Definitions

Climate Objective means the ultimate objectives of the United Nations Framework Convention on Climate Change, the Paris Agreement, and in particular limiting the increase in global temperatures to 1.5 degrees Celsius above pre-industrial levels and achieving net zero emissions by 2050 or sooner (in line with the best available science and increased climate ambition).

 

Additional Clause

1. Green Governing Law

[For inclusion in arbitration clauses in commercial agreements.]

1.1. This Agreement shall be governed by, and all disputes relating to or arising in connection with this Agreement or the subject matter thereof shall be resolved in accordance with, the laws of [chosen jurisdiction]. The parties agree that this Agreement shall be construed in a manner that is consistent with the Climate Objective and any dispute shall be resolved in the manner most closely aligned with the Climate Objective.

1.2 The Parties agree that in the case of inconsistency between the Climate Objective and the laws of [chosen jurisdiction], the Tribunal should interpret and/or modify [chosen jurisdiction] law so that it is aligned with the Climate Objective. Where that is not possible, the Tribunal shall be empowered to disregard those laws, regulations, guidelines, practices or other directives that are incompatible with the Climate Objective, save for mandatory rules of [chosen jurisdiction] law.

Read the disclaimer

Join the largest global network of lawyers and business leaders using climate contracting to deliver fast and fair decarbonisation

Join us