Finance and capital markets
Learn how contracts and pre-contract legal documents can help the finance sector reduce carbon emissions in each transaction
Why climate contracting is important
Finance is the engine behind all economic activity. Carbon is embedded in every financial agreement and transaction, released over the life of a contract. This makes finance pivotal to decarbonising the global economy.
Investors and financial institutions face significant financial, physical and transition risks if they fail to address the climate impacts tied to the businesses they finance.
As climate regulations evolve and tighten, protecting your business requires proactive action. Ensure your clients identify and mitigate climate risks in every transaction to safeguard against potential future liabilities.
Climate risk is investment risk
Larry Fink, CEO of BlackRock (source)
Meet the team
Regina Villaruel
Head of Finance and Capital Markets
regina.villaruel@chancerylaneproject.org
Regina helps stakeholders in the finance sector adopt climate-aligned contracts. She trained at Shearman & Sterling LLP (Italy) in M&A and Capital Markets and has over 10 years of experience as in-house counsel across different countries.
Regina holds a 5-year law degree from the University of Catania (Italy), an LLM in Corporate Law from UCL, and a PGCert in Human Rights from the University of London.
Ruby Carver
Sector Relationship Manager – Finance and Capital Markets
ruby.carver@chancerylaneproject.org
Ruby leads the project management, relationship building and event execution efforts with our financial and capital market networks.
With more than 10 years of experience in business development in the finance space and a master’s degree in Sustainability Management, she is committed to driving climate action within the finance and capital markets sector.
Benefits of adopting climate-aligned contracts
Incorporating climate considerations into contracts and pre-contract documents helps reduce carbon emissions and allows for early identification and mitigation of climate risks.
Climate-aligned contracts also enable parties to create customised solutions that align with their business objectives and accelerate the transition to net zero.
This approach encourages businesses to seize market opportunities in green technology, renewable energy, green transport and sustainable farming. It also enhances an organisation’s reputation by showcasing its commitment to addressing the climate crisis.
Who is using our clauses
Case study
NatWest
Requiring suppliers to improve their sustainability score, with failure to improve allowing NatWest to terminate the contract
“This project has been a fantastic learning opportunity and energising to feel we are genuinely doing our bit to make a difference. We are really proud to be an early adopter in this space.”
Kenny Robertson, Head of Outsourcing, Technology & IP legal team at NatWest
NatWest introduced sustainability clauses across their standard supply contracts, updating these templates to reflect the bank’s climate ambitions.
These clauses support and incentivise reductions in Scope 3 emissions and give NatWest the right to terminate supply chain contracts with suppliers who fail to improve their sustainability rating.
Case study
PLMJ
Using sustainability-linked lending requirements to decarbonise finance agreements worth €150m
“TCLP’s climate clauses are a practical and useful solution to mitigate climate change and rewire the economy. Every financing agreement using these clauses represents an opportunity to promote large-scale change towards net zero.”
Bruno Ferreira, Partner at PLMJ
Portuguese law firm PLMJ used TCLP climate clauses across lending facilities amounting to EUR150 million. These contracts contain sustainability-linked requirements that incentivise borrowers to achieve set climate targets.
How we can help you
We’re a non-profit organisation working with the most ambitious organisations who want to be sustainability leaders in the sector. Our content is free for anyone to use and we also provide bespoke services, such as those below, free of charge.
Build awareness in your organisation
- Identify areas for clause use
- Present to your team or board on how to use our content
- Connect you to other organisations or advisors using clauses
Guide you on implementation
- Which clauses you can consider alongside your legal team, and how they can benefit your organisation
- Troubleshoot common barriers you may face during the negotiation process
Support your advocacy
- Upskill you to become a sustainability leader and champion our content
- Develop your ambition to enable you to take the next step on your climate contracting journey
Useful guides
Simple guidance for common scenarios and opportunities to use climate-aligned approaches in your work.
Guide
Request climate information in due diligence questionnaires
Assess the climate performance of other organisations and how they will impact your transition plan
Guide
Deliver a climate transition plan
Use contracts to implement your organisation's transition plan
Guide
Introduce climate provisions to contract parties
Create the right conditions for using contracts to reduce emissions from the very beginning
Due diligence clauses
Clauses you can integrate into your due diligence questionnaires and standard templates to evaluate and mitigate climate-related risks.
Gordon’s DDQ
ESG Due Diligence Questionnaire for M&A and Capital Markets
Jurisdiction: England & Wales
Updated:
Maintained
Financing clauses
Clauses you can use to incentivise climate-aligned business goals in lending agreements and mobilise finance to support the transition to a decarbonised economy.
Investment-related clauses
Clauses you can use to embed climate considerations into investment criteria to minimize environmental risks and achieve net-zero goals.
Corporate governance clauses
Clauses you can incorporate into board documents and investment agreements to enhance climate risk oversight and incentivize management teams to achieve ESG targets
Griff’s Clause
Template Board Paper for Significant Contracts or Transactions
Jurisdiction: England & Wales
Updated:
Maintained
Bella’s Clause
Management Equity Ratchet Terms
Jurisdiction: England & Wales
Updated:
Not maintained
Insights and news
How the financial sector can mitigate climate risks through contracts
Finance is the engine behind all economic activity. Carbon is embedded in every financial agreement and transaction, released over the life of a contract. This makes finance pivotal to decarbonising the global economy.
Press and Features
How Contracts Can Protect Businesses From Climate Risks
Contracts are an often overlooked — but powerful tool — to both mitigate climate risks and reduce carbon emissions. And help is at hand for companies struggling to write climate-aligned contracts.
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