Climate Change Contract Clauses for UK Businesses

climate clauses in contract for uk businesses

Whilst many of us are hearing about what’s going on at COP26, it can be difficult for business owners to know what effect it might actually have on a day-to-day basis.

We look at clauses in which stakeholders, business owners and other individuals might begin to see more obligations to move towards an environmentally friendly future.

What climate responsibilities might affect UK businesses?

A renewed international focus on the climate could mean that UK’s businesses begin to see, or wish to incorporate, environmentally-friendly clauses in their contracts.

Ultimately, it is the politicians who are responsible for setting (and hopefully, achieving) targets to prevent irreversible climate change. However, the UK’s SMEs employ 60% of the UK workforce and generate around £2.2tn for the economy. As such, they could be a driving factor in the UK government’s plans to achieve net zero emissions.

The Chancery Lane Project aims to facilitate contractual solutions to climate change. Whilst environmentally friendly contracts may not be at the top of many businesses’ to-do lists right now, certain clauses could become more prominent in the aftermath of COP26.

Climate-friendly clauses to be aware of might include:

  1. Requiring interest on late payments to be donated to green charities, an off-setter or another green cause
  2. Ensuring landscape design or large-scale building contracts utilise spaces in an environmentally friendly way
  3. Avoiding excessive paperwork in dispute resolution (any reduction in paperwork tends to be music to most business owners’ ears)
  4. Provisions for making a building more environmentally friendly on commercial leases
  5. Use of greener HGVs in supplier contracts
  6. Employment clauses, which might provide for obligations around sustainable commuting, flexible working or bonuses for sustainable travel and volunteering
  7. A substantial range of corporate clauses, including green company articles, culture handbooks, shareholder agreements and much more
  8. From green AST agreements to sustainable construction materials and securing net zero into the planning stage, real estate clauses could have a widespread impact

With 94 model clauses currently available to browse on The Chancery Lane project, businesses could see an increase in their obligations to the environment in the coming years or even months.

For help with contract clauses or other legal advice relating to your business, get in touch with the team at Carlsons Solicitors.

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