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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 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 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
A branch of NatWest bank

“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
PLMJ Law Firm Offices

“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.

View all our case studies

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

Align the board with climate goals

Enable good climate governance from the top down
Guide

Introduce climate provisions to contract parties

Create the right conditions for using contracts to reduce emissions from the very beginning
Guide

Request climate information in due diligence questionnaires

Assess the climate performance of other organisations and how they will impact your transition plan

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

Capital Markets ESG Due Diligence Questionnaire

Jurisdiction: England & Wales

Updated:

Lola and Harry’s DDQ

Climate Due Diligence Questionnaire for M&A Transactions

Jurisdiction: England & Wales

Updated:

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.

Casper’s Clause

Sustainability-Linked Loans

Jurisdiction: England & Wales

Updated:

Harrison’s Clause

Green Loan “Starter Pack”

Jurisdiction: England & Wales

Updated:

Clauses you can use to embed climate considerations into investment criteria to minimize environmental risks and achieve net-zero goals.

Frank’s Clause

Green Investment Obligations

Jurisdiction: England & Wales

Updated:

Lauren’s Clause

Green Shareholders’ Agreement

Jurisdiction: England & Wales

Updated:

View all clauses

How are you using our clauses?

We’d like to hear how you’ve implemented our clauses in your organisation.

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