In-house

Are we really all climate lawyers now?

As the world continues to witness the disastrous effects of the ongoing climate crisis, Matthew Gingell explains what in-house lawyers can do to meet net zero targets and tackle climate change.

Climate-change-lawyer-in-a-suit-with-a-leaf-as-a-pocket-square

Before I start, I have a confession to make: I'm not an environmental or climate change lawyer, nor am I a net zero expert.

Like you, I also work for a profit-making company. I'm simply a commercial in-house lawyer taking a leadership position on climate change.

I hope my upfront confession will show you that you do not have to be a climate expert to be effective in the face of climate change, and that every lawyer can make a difference.

John Kerry recently declared to the American Bar Association that all lawyers are "climate lawyers now". This is old news to many in-house teams who are already deploying climate-aligned contracts to meet their net zero objectives.

However, our ability as in-house lawyers to act on climate change and accelerate the Race to Zero has never been stronger. We must turn words into action to go further, faster.

The milestones for disaster are clear, and if nothing is done, one thing is certain: climate change will affect everyone, everywhere.

A code red for humanity has been issued by the UN. The effects of climate change are a risk to our way of life: it will even affect lawyers and the business of law.

The complexity of climate change can seem paralysing, and certainly did for me.

How can we grapple with a problem of such fine margins and grand scales; somehow all at once urgent and epic, local and international?

How can we as individual lawyers help?

The oversimplified answer is climate-aligned contracting. More of that later. First we need to consider net zero emissions.

Net zero targets

The way I think about net zero targets is as a service level agreement (SLA) with the world. It's a publicly made promise (including to our shareholders and customers) that we're reducing our emissions.

Like any service, having an SLA creates legal and contractual problems for the in-house team to solve.

For example, how do we reconcile those targets with our staff, operations, customers and investments?

What happens if a greener solution comes along but we are locked into an incumbent supplier?

What are the remedies if the emissions target is missed? Will liquidated damages help our net zero transition plan?

More interestingly, how can our net zero plans be derailed? Once hit, how is net zero maintained? If we buy another company that isn’t net zero, will we default our net zero status as a group?

How does this link to our long-term incentive plan and will this create conflicts at board-level or issues with investors’ environmental, social and governance (ESG) scorecards?

A net zero target will touch every part of your business and involve every member of your in-house team: from governance, to supply chain, from finance to investment, from human resources to intellectual property.

It's a challenge for the entire in-house team who have to re-wire the contractual and governance frameworks of their businesses. It will be a big challenge to operationalise net zero.

Climate-aligned contracting

Fortunately, we do not have to start from scratch.

Since July 2019 lawyers from across the profession and world have been collaborating on The Chancery Lane Project, creating practical contractual solutions that are freely accessible. There's drafting available covering virtually every function of the in-house department and every part of the contract life cycle.

Each contract we draft is an opportunity for impact. The earlier in the contract cycle we intervene with climate drafting, the more likely the deal or arrangement will have net zero as part of the commercial discussion and delivery.

Why are these climate clauses important?

Well, contract-drafting shapes the relationships and transactions of our markets and economies. Climate clauses will be required for every part of the transition to net zero.

As in-house lawyers, we have influence through our drafting in a way that's immediate and lasting, provincial and global.

We do not have to wait for governments to enact laws, we can move more quickly and easier through our business contracts.

In effect, climate contracts allow impact on climate change to happen sooner, in a way that's aligned to business objectives and economic prosperity. This is a new legal doctrine of ground-level commercial contracts driving global environmental outcomes.

The Chancery Lane Project also shows that all mainstream commercial lawyers can use their transactional skills and experience to make a difference. As professionals, we're taking the opportunity to mitigate disaster by making a positive and sustained impact on climate change. This is good for business, good for staff and good for the planet.

We may not think it, but we're already climate change lawyers no matter what our specialism.

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