Climate clause

ESG Aligned Company Articles

Arlo's Clause

A clause that builds ESG considerations into a company’s articles of association.

This is a climate clause

This clause brings climate considerations to your drafting. It is not yet net zero aligned. To align this clause with net zero, use our toolkit or join one of our events.

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Why use this?

To build ESG considerations into a company’s constitution which in turn acts as a trigger for ESG aligned corporate governance, decision making and company activities.

Disclaimer - please read

The clauses on this website (and published in our Climate Contract Playbook) have been prepared in good faith on a pro bono basis and are free to download and use. The clauses have been drafted and edited by a variety of lawyers and, as such, the approaches to drafting may not conform to any particular drafting norms. We acknowledge this as a consequence of the collaborative drafting process.

The clauses on this website (and published in our Climate Contract Playbook) are provided on an ‘as is’ basis and without any representation or warranty as to accuracy or that the clauses will achieve the relevant climate goal or any other outcome.

This website (and the Climate Contract Playbook) does not comprise, constitute or provide personal, specific or individual recommendations or advice of any kind, and does not contain legal or financial advice. The clauses are precedents for legal professionals to use, amend and negotiate using their professional skill and judgement and at their own risk.

While care has been taken in the drafting of these clauses, neither The Chancery Lane Project nor any of its contributors owe a duty of care to any party in relation to their preparation and do not accept any liability for any errors or omissions, nor for any loss incurred by any person relying on or using these clauses or any other person. Users should use their own professional judgement in the application of these clauses to any particular circumstance or jurisdiction or seek independent legal advice.

At present, all the clauses are based on the laws of England and Wales. We encourage the conversion of these precedent clauses for use in other jurisdictions.

The clause

Example I:

The objects of the Company are to [insert as appropriate] and, through its business and operations, to adopt OR engage with [insert preferred climate and/ or environmental standards and/or goals].

Example II:

Directors’ General Authority:

1.1 Subject to the articles, the directors are responsible for the management of the company’s business, for which purpose they may exercise all the powers of the company.

1.1.2 The directors shall manage the company’s business in a manner that:

(a) benefits wider society and the environment in a manner commensurate with the size of the company and the nature of its operations; and

(b) reduces harms the company creates and costs it imposes on wider society or the environment, with the goal of eliminating any such harms and costs.

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