--- title: Factor climate considerations into board decisions date: 2024-02-14T12:34:00Z modified: 2026-03-25T11:04:11Z permalink: "https://chancerylaneproject.org/guides/factor-climate-considerations-into-board-decisions/" type: guide status: publish excerpt: Ensure the board makes decisions that support rather than undermine its transition plan wpid: 2905 climate-or-nature-outcome: - Climate risk - Decarbonisation climate-solution: - Align corporate strategy with climate transition plan - Alignment with Paris Agreement - Identify and manage climate risks - Measuring managing and reporting on emissions - Reducing GHG emissions - Setting emissions reduction targets contract-lifecycle-stage: - Business decision and strategy application: - Universal application law-or-regulation: - Paris Agreement legal-concept-activity: - Board governance / decision-making - Directors duties practice-area: - Corporate - Mergers and acquisitions primary-user: - Corporate lawyers - Directors/C-suite sector: - Any tclp-principle: - Good climate governance use-case: - Articles of Association - Board minutes - Board paper - Climate transition plan - Company policies - Governance documents - Shareholder agreement featured_image: "https://chancerylaneproject.org/wp-content/uploads/2024/04/Factor-climate-considerations-into-board-decisions.png" --- ## This guide enables organisations to: - operationalise their decarbonisation strategy and [transition plan](https://chancerylaneproject.org/glossary/transition-plan/) at board level - ensure climate is routinely considered in board decisions and corporate governance - avoid decisions and transactions that undermine their transition plan. [ Download this guide as a DOCx file ](#)## Choose the appropriate documents This guide is for any organisation. The example wording in this guide is written for board minutes of a company but it can be easily adapted for board papers and resolutions, corporate constitutional documents, governance processes and policies. It can also be used by organisations that are not companies. It can be difficult to change articles of association and constitutional documents to add climate commitments. However, once done, it has potential for great impact. The commitments will be harder to remove, and will cascade into corporate governance and directors’ duties. ## Oblige board members to implement the decarbonisation strategy Amend corporate documents to oblige directors to ensure the company has a plan to reduce its emissions and meet its emissions-reduction targets. The decarbonisation strategy should include: - a statement detailing the organisation’s challenges in reducing emissions - an overarching solution explaining how the organisation will overcome those challenges - a plan (which can be the [transition plan](https://chancerylaneproject.org/glossary/transition-plan/)) to implement the solution. #### Example wording The board members will act in good faith to: - promote the best interests of \[the Company\] - ensure that the business is conducted and developed in accordance with good business practice - ensure that \[the Company\] adopts a business plan that: - preserves the value of the shareholders’ capital as invested in \[the Company\] - implements \[the Company\]’s transition plan - achieves \[the Company\]’s emissions-reduction targets. The board shall: - adopt \[the Company\]’s transition plan - designate a member of the board \[OR Company executive\] to be the chief sustainability officer (CSO). The board shall provide the minutes of the meeting to the shareholders detailing the transition plan as soon as reasonably possible. Independent of each formal board meeting, the board shall meet to review and evaluate the appropriateness of, and progress against, \[the Company\]’s emissions-reduction targets and transition plan on a quarterly basis. The board shall consider: - \[the Company\]’s [carbon footprint](https://chancerylaneproject.org/glossary/carbon-footprint/) at the date of the meeting - \[the Company\]’s progress in achieving its current emissions-reduction targets and implementing the measures set out in its transition plan - whether any modifications should be made to the emissions-reduction targets and transition plan. The board shall provide minutes of such meetings to the shareholders. ## Incorporate climate into board minutes precedents Including climate-related drafting into the precedents for board minutes ensures all board decisions automatically consider related climate issues. Board decisions that factor in climate can then be cascaded to commercial decision-makers to align the company with its [transition plan](https://chancerylaneproject.org/glossary/transition-plan/). Ensure board decisions use a framework that includes the company’s end-to-end value chain to assess: - the impact of any company decision on the environment and society - the impact of sustainability issues on the company (particularly the financial risks). This is known as a double-materiality framework. When making decisions, the board should evaluate the risk of proposals to the company and its transition plan. For example, the board could rank proposals as high, medium and low risk, and ask proposers to list ways to mitigate risks greater than low. The board can then decide to disapprove or approve any given proposal with conditions. #### Example wording After due and careful consideration of the above matters, and each of the documents produced to the meeting, including consideration of: - \[the Company\]’s emissions-reduction targets and interim targets - \[the Company\]’s direct or indirect climate risks (including physical, transition and liability risks) associated with the proposed activities - the general impact of climate change on \[the Company\]’s business - alternative options with a lower [carbon footprint](https://chancerylaneproject.org/glossary/carbon-footprint/) and giving rise to less climate risk - measures for reducing, measuring and verifying \[the Company\]’s carbon footprint and reducing, mitigating and or avoiding the climate risks \[associated with the proposed activities\] - whether the proposed activities, and the activities and policies of any parties related to them (including their climate commitments, lobbying activities or trade association memberships), align with [Paris Agreement goals](https://chancerylaneproject.org/glossary/paris-agreement-goals/), and whether any action should be taken to improve such alignment - the impact on key stakeholders (including employees, clients, end customers and supply chain partners) of the proposed activities, any resourcing choices and the measures taken by \[the Company\] to mitigate its [greenhouse gas emissions](https://chancerylaneproject.org/glossary/greenhouse-gas-emissions/) - the board’s expertise in making decisions based upon these considerations and whether external advice should be sought from, or the decision or emissions measurements independently verified by, a qualified climate or sustainability professional, it was resolved… \[_insert_ _decision reached following consideration of the above factors_\]. ## **Require board approval for significant contracts** See [Require board approval for significant contracts](https://chancerylaneproject.org/guides/deliver-a-climate-transition-plan/#h-require-board-approval-for-significant-contracts) section of our Deliver a climate transition plan guide. #### **Updates** **December 2025** This guide was updated following a quality assurance review. ## Related guides Guide #### [ Align the board with climate goals ](https://chancerylaneproject.org/guides/align-the-board-with-climate-goals/) Enable good climate governance from the top down ![](https://chancerylaneproject.org/wp-content/uploads/2024/04/Align-the-board-with-climate-goals-nd-report-on-emissions-640x384.png) Guide #### [ Measure, manage, reduce and report on emissions ](https://chancerylaneproject.org/guides/measure-manage-reduce-and-report-on-emissions/) Commit to understanding and communicating emissions, and developing a transition plan to reduce them ![](https://chancerylaneproject.org/wp-content/uploads/2024/04/Measure-manage-reduce-and-report-on-emissions-640x384.png) ## Climate clauses using the contractual solutions in this guide Darcy’s Board Minutes #### [ Board Minutes: Consideration of Climate Change Factors ](https://chancerylaneproject.org/clauses/board-minutes-consideration-of-climate-change-factors/) Jurisdiction: [England & Wales](https://chancerylaneproject.org/news/jurisdiction/england-wales/) Updated: 22 January 2026 Maintained Lauren’s Clause #### [ Green Shareholders’ Agreement ](https://chancerylaneproject.org/clauses/green-shareholders-agreement/) Jurisdiction: [England & Wales](https://chancerylaneproject.org/news/jurisdiction/england-wales/) Updated: 13 March 2025 Maintained Griff’s Clause #### [ Template Board Paper for Significant Contracts or Transactions ](https://chancerylaneproject.org/clauses/template-board-paper-for-significant-contracts-transactions/) Jurisdiction: [England & Wales](https://chancerylaneproject.org/news/jurisdiction/england-wales/) Updated: 22 January 2026 Maintained Lily’s Clauses #### [ ESG Clauses for Rules of Procedure for Managing Directors of a German Limited Liability Company (GmbH) ](https://chancerylaneproject.org/clauses/esg-clauses-for-rules-of-procedure-for-managing-directors-of-a-german-limited-liability-company-gmbh/) Jurisdiction: [Deutschland](https://chancerylaneproject.org/news/jurisdiction/germany/) Updated: 1 September 2023 Not maintained ## Glossary definitions used in this guide Glossary term #### [ Carbon Footprint ](https://chancerylaneproject.org/glossary/carbon-footprint/) Updated: 8 July 2025 Definitions: 5 Glossary term #### [ Greenhouse Gas Emissions ](https://chancerylaneproject.org/glossary/greenhouse-gas-emissions/) Updated: 8 July 2025 Definitions: 3 Glossary term #### [ Paris Agreement Goals ](https://chancerylaneproject.org/glossary/paris-agreement-goals/) Updated: 19 June 2025 Definitions: 1 Glossary term #### [ Transition Plan ](https://chancerylaneproject.org/glossary/transition-plan/) Updated: 18 September 2025 Definitions: 1 ## Topics **Climate or nature outcomes:** [Climate risk](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/climate-or-nature-outcome/climate-risk.md), [Decarbonisation](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/climate-or-nature-outcome/decarbonisation.md) **Climate solutions:** [Align corporate strategy with climate transition plan](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/climate-solution/align-corporate-strategy-with-climate-transition-plan.md), [Alignment with Paris Agreement](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/climate-solution/alignment-with-paris-agreement.md), [Identify and manage climate risks](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/climate-solution/identify-and-manage-climate-risks.md), [Measuring managing and reporting on emissions](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/climate-solution/measuring-managing-and-reporting-on-emissions.md), [Reducing GHG emissions](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/climate-solution/reducing-ghg-emissions.md), [Setting emissions reduction targets](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/climate-solution/setting-emissions-reduction-targets.md) **Contract lifecycle management stages:** [Business decision and strategy](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/contract-lifecycle-stage/business-decision-and-strategy.md) **Guide Applications:** [Universal application](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/application/universal-application.md) **Law or regulations:** [Paris Agreement](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/law-or-regulation/paris-agreement.md) **Legal concept, activity or principles:** [Board governance / decision-making](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/legal-concept-activity/board-governance-decision-making.md), [Directors duties](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/legal-concept-activity/directors-duties.md) **Practice Areas:** [Corporate](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/practice-area/corporate.md), [Mergers and acquisitions](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/practice-area/mergers-and-acquisitions.md) **Primary users:** [Corporate lawyers](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/primary-user/corporate-lawyers.md), [Directors/C-suite](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/primary-user/directors-c-suite.md) **Sectors:** [Any](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/sector/any.md) **TCLP principles:** [Good climate governance](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/tclp-principle/good-climate-governance.md) **Use cases:** [Articles of Association](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/use-case/articles-of-association.md), [Board minutes](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/use-case/board-minutes.md), [Board paper](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/use-case/board-paper.md), [Climate transition plan](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/use-case/climate-transition-plan.md), [Company policies](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/use-case/company-policies.md), [Governance documents](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/use-case/governance-documents.md), [Shareholder agreement](https://chancerylaneproject.org/wp-content/uploads/wp-mfa-exports/taxonomy/use-case/shareholder-agreement.md)