Guest post by Becky Clissmann, a member of The Chancery Lane Project steering group and senior editor in the environment team at Thomson Reuters Practical Law
Clissman: Every contract can be viewed as an opportunity
Law firms around the world are finding they can play a major and direct role in addressing climate change by just doing what they do – namely, letting their lawyers be lawyers.
One doesn’t often picture the legal business as being a pivotal industry for climate change. Most would consider lawyers focused instead on energy, transportation, manufacturing and so forth. But lawyers have a major influence on how these – and nearly all industries – conduct their business.
This, in turn, creates significant opportunities to move the fight against climate change forward, especially at a time when Cop26 is dominating the headlines and thinking.
The Chancery Lane Project (TCLP), a non-profit created by lawyers globally and independent of any professional or political body or practice, is seeking to create a world where every legal contract helps enable solutions to climate change.
Every contract can be viewed as an opportunity to contribute to global net-zero emission targets rather than perpetuating business-as-usual scenarios.
Organisations around the world are waking up to the urgency of the climate crisis and many companies, universities, local governments, communities and other organisations have already set net-zero targets and signed up for the Race to Zero. Net-zero targets need to be aligned to the Paris Agreement goals. Put another way, they need to be sufficiently ambitious.
Setting a net-zero target is just the start of an organisation’s net-zero transition. The next step is creating a robust plan for how to make the transition, sometimes known as a climate transition action plan (CTAP).
Then the organisation needs to take specific actions in their CTAP (eg, converting to renewable energy, using zero-emission vehicles, taking energy efficiency measures, reducing waste and the associated emissions, etc.). Next comes monitoring and reporting on those measures and the resulting reductions in emissions.
These steps should be iterated as they continue to drive down their greenhouse gas (GHG) emissions, aiming for 7% year-on-year, which is the amount required to halve emissions each decade and meet the Paris Agreement goal.
Contracts can be an effective vehicle for helping organisations achieve those goals. In the everyday course of doing business, contracts provide them with the essential frameworks to manage every aspect of their operations, as well as foundations for strategic planning. Thus, those contracts can either put organisations on more effective paths towards their net-zero goals or, conversely, stand as impediments or roadblocks towards those targets.
TCLP hopes every lawyer will eventually view every contract through that lens. To help achieve that, it is providing lawyers the tools they need to implement more climate-friendly contracts.
The project has over 1,100 participants rewriting contractual clauses. They stretch across 200 organisations in 73 countries, including 50% of the global elite law firms.
It has thus far produced nearly 100 climate-friendly clauses peer reviewed by experts (including my colleagues at Practical Law). These model clauses are free for lawyers to include in their precedents and a variety of legal agreements, from supply chain agreements and finance contracts to facilities management contracts and leases.
The clauses oblige parties to set GHG targets, monitor and reduce their GHG emissions, undertake projects that use renewable power, avoid developments that adversely affect landscapes that naturally absorb carbon and so on.
Adding these clauses to agreements translates net-zero targets into clear instructions for how the business will operate under the agreement to take climate risks and impacts into account.
The good news is that contracts can be changed to help parties achieve their net-zero targets much quicker than the time it would take to introduce new laws to achieve similar ends. This accelerates the impact of that action, reducing emissions today and bending the emissions curve towards net zero earlier than might otherwise be the case.
TCLP has published case studies showing how lawyers have used the clauses, and we invite lawyers to our autumn workshop series to work alongside peers and learn how best to use the clauses and identify, and overcome, any challenges.
The Intergovernmental Panel on Climate Change recently said every ton of CO₂ counts in the fight to combat climate change. By reducing GHG emissions today rather than waiting for tomorrow, we give ourselves a greater chance of achieving a global net zero emissions by 2050.
The challenge is enormous but together we can get there. Engaging the vast legal community worldwide to add their unique expertise and influence could have a tremendous impact.
If you are a lawyer, you have the ability to act now and use TCLP’s clauses to help achieve your, and your clients’, net-zero targets. If you are part of a corporation or other organisation, we encourage you to work with your legal department or outside counsel.
For more information, visit www.chancerylaneproject.org.
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