New Zealand Green Investment Finance (NZGIF) has begun using climate conscious legal drafting in an effort to ensure its legal contracts support its mandate to reduce emissions and accelerate New Zealand’s transition to a low carbon economy.
We aim to demonstrate to the market that legal frameworks can enable and encourage businesses and communities to have a positive impact on the environment.
What is climate conscious legal drafting?
Climate conscious legal drafting is concerned with how the behaviours of contracting parties, particularly relating to climate change mitigation, can be influenced by their contractual obligations. It brings climate change mitigation out of the purview of sustainability teams and into the general consciousness of contract owners and drafters.
Clauses range from simple actions that parties can take to full-blown climate change mitigation obligations.
The leading light in this area is The Chancery Lane Project (TCLP), an organisation born out of a desire from the legal profession to play a greater role in climate change mitigation through climate-conscious legal drafting.
The TCLP is a pro bono initiative that brings legal professionals together to collaborate and rewrite contracts and laws, in order to support communities and businesses in fighting climate change and achieving net zero carbon emissions.
Examples of existing clauses available for use by lawyers include:
How NZGIF uses climate conscious legal drafting
NZGIF includes standard clauses in all its contracts, such as:
- A preference for electronic notices
- Climate-friendly dispute resolution
All our precedents are consistent with TCLP.
We are always considering how our documents can drive even greater impact. We work with our investee companies to help them implement these clauses in their businesses. We’re also conscious of our ability to drive better outcomes from our suppliers through contractual obligations focused on sustainability.
Our journey with TCLP clauses is in its infancy, but we are excited about the part they could play in our work to accelerate investment in emissions reductions in New Zealand.
About The Chancery Lane Project (TCLP)
TCLP supports the legal sector to play its part in enabling the transition to net zero emissions and a low carbon economy.
As of April 2022, the TCLP community includes over 2,400 legal professionals from around the world and over 300 participating organisations.
The TCLP has two key goals:
- To shift the dial and make climate conscious drafting the norm, as quickly as possible
- Make consideration of climate risk mainstream so that it is no longer thought of as a discrete environmental issue
It is independent of any professional body or practice, politically neutral, free and easy to use, collaborative and provides a safe space to innovate as drafting is unattributable to individual firms or lawyers.
The process – how TCLP works
TCLP finds practical legal solutions in the form of model clauses that can be wired into legal agreements.
Thousands of lawyers collaboratively draft new clauses. Each clause is named by the drafter after a child to encourage long-term thinking and a focus on the next generation, who will be most affected by the climate crisis. There are 108 clauses and counting.
A team of experts peer review each clause to ensure they are fit for purpose, then lawyers have access to insert the free-to-use clauses into their contracts.
Find out more
You can read more on the Chancery Lane Project website and sign up to receive updates.