---
title: Climate Checklist for Prospectuses and Other Public Offering Documents
date: 2025-10-22T08:43:49Z
modified: 2026-01-29T15:56:12Z
permalink: "https://chancerylaneproject.org/clauses/climate-checklist-for-prospectuses-and-other-public-offering-documents/"
type: clause
status: publish
excerpt: ""
wpid: 10057
jurisdiction:
  - England & Wales
maintenance-status:
  - Not maintained
practice-area:
  - Capital markets
clause_child_name: "Tilly's Clause"
clause_summary: Helps issuers of debt securities tasked with drafting risk factors for prospectuses to assess the financial impacts of climate-related risks and provide climate-related risk factor disclosure.
clause_last_updated_date: 2021-09-29
related_clauses: false
---

## Child’s name

Tilly’s Clause

## Summary

Helps issuers of debt securities tasked with drafting risk factors for prospectuses to assess the financial impacts of climate-related risks and provide climate-related risk factor disclosure.

## What this clause does

A checklist that is consistent with Task Force on Climate-related Financial Disclosures (TCFD) recommendations and follows a recognised disclosure and reporting framework as regards climate-related financial disclosures which debt capital markets investors are likely to be familiar with.

To download this clause as a web page view Docx file, please click the ‘Download this clause’ button in the menu to the left. For a downloadable version of this clause in table format, please click [here](https://thechancerylaneproject.my.salesforce.com/sfc/p/#4K000005Ppzq/a/N1000000MVl7/Dwzcds04pbkiabNSj6mXaYuKh81br624ayAd9H_wsgI).

## Clause Content

**Checklist for identification, assessment, and disclosure of climate-related risk factors for prospectuses**



| Climate-related risk category | Potential financial impact | Likelihood and timeframe | Scope and size of risk | Materiality / Prioritisation of risk |
| --- | --- | --- | --- | --- |
| _Q: What climate-related risks impact the issuer and the group?__Q: As regards greenhouse gas (GHG) emissions, what are the risks impacting the issuer and group in relation to Scope 1, Scope 2, and (if appropriate) Scope 3 GHG emissions?_ | _Q: What are the potential financial impacts of these climate-related risks, including on revenue, cash flow, and balance sheet of issuer and group?_ | _Q: How likely is the risk / financial impact to occur within the term of the securities?__Q: Is this risk / financial impact likely to manifest over the short, medium, and/or long term?_ | _Q: How big a risk / financial impact is this specifically to the issuer and its group?__Q: Does this risk impact the sector(s) and/or geography(ies) applicable to the issuer and its group?_ | _High / Medium / Low_ |
| **All sectors** |  |  |  |  |
| **Transition risks associated with the transition to a lower-carbon global economy, including:** |  |  |  |  |
| **Policy and regulatory (or legal and compliance) risk**_Examples include:_ ● Policy changes such as: - implementing carbon-pricing mechanisms to reduce GHG emissions, - shifting energy use toward lower emission sources, - adopting energy-efficiency solutions, - encouraging greater water efficiency measures, - promoting more sustainable land-use practices. ● Increased pricing of GHG emissions ● Enhanced climate change / emissions regulatory reporting obligations ● Mandates on and regulation of existing products and services | _Examples include:_ ● Increased operating costs (e.g., higher compliance costs, increased insurance premiums) ● Write-offs, asset impairment, and early retirement of existing assets due to policy changes ● Increased costs and/or reduced demand for products and services resulting from fines and judgments ● Costs for measuring emissions and undertaking meaningful net zero target and interim net zero target setting, including Scope 3 emissions and supply chain analysis |  |  |  |
| **Litigation risk**_Examples include:_ ● Exposure to litigation, including by claims brought before courts by property owners, municipalities, states, insurers, shareholders, and public interest organisations, due to e.g.: - failure to mitigate impacts of climate change or adapt to climate change, - insufficiency of disclosure around material financial risks. | ● Increased costs and/or reduced demand for products and services resulting from fines and judgments |  |  |  |
| **Technology risk**_Examples include:_ - Substitution of existing products and services with lower emissions options - Unsuccessful investment in new technologies - Costs to transition to lower emissions technology | _Examples include:_ - Write-offs and early retirement of existing assets - Reduced demand for products and services - Research and development (R&D) expenditures in new and alternative technologies - Capital investments in technology development - Costs to adopt/deploy new practices and processes - |  |  |  |
| **Market risk**_Examples include:_ - shifts in supply and demand for certain commodities, products, and services - Changing customer behaviour - Uncertainty in market signals Increased cost of raw materials | _Examples include:_ - Reduced demand for goods and services due to shift in consumer preferences - Increased production costs due to changing input prices (e.g., energy, water) and output requirements (e.g., waste treatment) - Abrupt and unexpected shifts in energy costs - Change in revenue mix and sources, resulting in decreased revenues - Repricing of assets (e.g. fossil fuel reserves, land valuations, securities valuations) - Loss of revenue due to consumers reducing their Scope 2 or 3 emissions |  |  |  |
| **Reputation risk**_Examples include:_ - Changing customer or community perceptions of contribution to or detraction from the transition to a lower-carbon economy - Shifts in consumer preferences - Stigmatisation of sector - Increased stakeholder concern or negative stakeholder feedback | _Examples include:_ - Reduced revenue from decreased demand for goods/services - Reduced revenue from decreased production capacity (e.g., delayed planning approvals, supply chain interruptions) - Reduced revenue from negative impacts on workforce management and planning (e.g., employee attraction and retention) - Reduction in capital availability |  |  |  |
| **Physical risk, related to the physical impacts of climate change, including:** **Acute physical risk** Increased severity of extreme weather events, including e.g. cyclones, storms, floods, wildfires, heatwaves etc **Chronic physical risk** Longer-term shifts in climate patterns, including e.g.: - Changes in precipitation patterns and extreme variability in weather patterns - Rising mean temperatures - Rising sea levels | Physical risks may have financial implications for issuers, such as direct damage to assets and indirect impacts from supply chain disruption. Issuer’s’ financial performance may also be affected by changes in water availability, sourcing, and quality; food security; and extreme temperature changes affecting organisations’ premises, operations, supply chain, transport needs, and employee safety. _Examples include:_ - Reduced revenue from decreased production capacity, disruption to operations and services (e.g., transport difficulties, supply chain interruptions) - Reduced revenue and higher costs from negative impacts on workforce (e.g., health, safety, absenteeism) - Write-offs and early retirement of existing assets (e.g., damage to property and assets in “high-risk” locations) - Increased operating costs (e.g., inadequate water supply for hydroelectric plants or to cool nuclear and fossil fuel plants) - Increased capital costs (e.g., damage to facilities) - Reduced revenues from lower sales/output - Increased insurance premiums and potential for reduced availability of insurance on assets in “high-risk” locations |  |  |  |



| Additional considerations by sector: |  |
| --- | --- |
| **Banks**_Examples include:_ - Consider characterising climate-related risks in context of traditional banking industry risk categories such as credit risk, market risk, liquidity risk, and operational risk - Concentrations of credit exposure to carbon-related assets - Credit risk arising from inability of customers or counterparties impacted by climate change to meet financial commitments - IT systems failures due to extreme weather |  |
| **Insurance companies**_Examples include:_ - Climate-related risks to core business due to weather related natural catastrophes - Physical risks from changing frequencies and intensities of weather-related events - Transition risks from reduction in insurable interest due to decline in value, changing energy costs, or implementation of carbon regulation - Litigation or liability risks that could intensify due to potential increase in litigation |  |
| **Fossil fuel and electricity providers**Issuer groups with significant GHG emissions that are likely to be strongly impacted by transition risk. _Examples include:_ - Transition risks regarding current or future constraints on GHG emissions, changes in compliance and operating risks, exposure to regulatory changes, changing consumer and investor expectations, expansion of renewable energy in a mix of energy supply, changes in investment strategies, reputation risk, litigation risk. - Physical risks e.g. affecting water supplies | _Examples include:_ - Significant financial exposure around transition issues related to GHG emissions / availability of water - Financial impacts arising from changes in asset valuations caused by a structural shift toward low carbon energy systems. |
| **Transportation** | _Examples include:_ - Financial risks around current plant and equipment, write-offs of equipment, phasing out of products due to policy constraints or shifts or emergence of new technologies. - Reduced revenue due to transport difficulties. |
| **Construction Materials and Buildings**_Examples include:_ - Physical risks from increasing frequency and severity of acute weather events or increasing water scarcity impacting operating environment |  |
| **Agriculture, Food and Forest Products**_Examples include:_ - Policy and market risks relating to GHG emissions and water - Changing land use patterns – impacts on food and fibre production (e.g. due to extreme weather or water events) |  |

## Topics

**Jurisdictions:** [England & Wales](https://chancerylaneproject.org/news/jurisdiction/england-wales/)

**Maintenance status:** [Not maintained](https://chancerylaneproject.org/news/maintenance-status/not-maintained/)

**Practice Areas:** [Capital markets](https://chancerylaneproject.org/news/practice-area/capital-markets/)