The Chancery Lane Project
The Chancery Lane Project (TCLP) is a global collaboration of lawyers and sustainability professionals working pro bono to provide clauses and tools to align agreements with net zero outcomes.
TCLP envisions a world where the legal system enables solutions to the climate crisis and where all lawyers and their clients use the law to deliver their climate and wider environmental targets.
The TCLP community includes all of the top 25 UK law firms and many of the top 25 US law firms with UK offices and has established successful case studies around the world including in New Zealand, with several contributing law firms.
How does TCLP work?
TCLP helps lawyers add wording to their precedents and client agreements to address the climate risks of their transactions. TCLP has created a suite of over 100 free, open access clauses that can be inserted into agreements and contract precedents across many practice areas.
The TCLP clauses aim to deliver greenhouse gas emissions savings and create new contract market norms. Implementing these clauses across contracts seeks to use contract law to deliver net zero targets and the legal sector to become an agent for the deep changes needed to transition to net zero. By way of example, TCLP helps in-house counsel work with their lawyers to include provisions in their supply chain, financing and other contracts to assist in meeting their organisation’s net zero targets.
The TCLP database is growing and is being expanded with time to broaden its coverage. Lawyers are also adapting the clauses to be relevant for their jurisdictions and sectors as part of a global transposition movement.
Why is TCLP relevant for directors?
There is an increasing focus, both in New Zealand and globally, on stakeholder governance. This is something that all directors need to consider and engage in as part of discharging their directors’ duties.
Boards are emphasising environmental, social and governance matters and their relationship to long term performance and value creation, in light of their organisation’s purpose, values and strategy. Underpinning this is understanding and responding to the evolving expectations of investors, consumers, staff, and other stakeholders.
The IoD has covered stakeholder governance and the discharge of directors’ duties as a topic elsewhere (Stakeholder Governance paper). To action directors’ decisions in this respect requires documentation for the entity and as between third parties.
Introducing your organisation to TCLP is a good starting point for your team as they develop documentation to reflect your organisation’s climate goals. The climate clauses on the TCLP database can be applied across many of the organisation’s day-to-day operational contracts (such as supply chain contracts), but also more significant contracts (such as financing), and with respect to its governance (such as shareholder agreements).
Beyond the climate clauses, TCLP’s Net Zero Toolkit includes a number of other useful resources including:
- Net zero drafting definitions and sample wording – a list of net zero defined terms for contracts and sample wording for drafting.
- A clause timeline – TCLP climate clauses mapped across the contract lifecycle.
- A net zero transition map – a high-level overview of issues to consider when implementing a company’s net zero target.
- A net zero drafting checklist to use as a framework when drafting or negotiating net zero concepts in contracts.
- Case studies that show the range of applications that TCLP clauses can have.
The Toolkit also includes a stakeholder company climate questionnaire, which is intended to be used by individuals who want to understand the climate position and net zero ambition of organisations (in particular, companies) that they engage with. However, it can be adapted by companies as a tool to build a framework and steps to take in developing climate goals and actions.
TCLP in New Zealand
TCLP has successfully assisted New Zealand Green Investment Finance (NZGIF). NZGIF has integrated TCLP’s climate clauses into their equity investment documents and lending documents. NZGIF adapts TCLP’s clauses to fit each business in terms of its size and sector and found that parties are generally very receptive to them.
TCLP hosts a number of recorded events to provide more information about their resources and how to get involved.
- Introducing Climate Clauses [Recorded]
New to the TCLP community? Watch our short Introducing Climate Clauses video for an overview of what we do, the resources available to you and ways to get involved.
- Understanding Net Zero [Recorded]
You’ve set a net zero target (or your client has). Now what? How do you draft that target into a contract or cascade those commitments through your value chain?