Climate Contract Playbook Edition 3
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1. Development Finance Institutions 2. International Finance Institutions
3. Social Impact Investors 4. Other project financiers 5. Law Firms (in multiple jurisdictions) 6. LMA 7. Technical advisors 8. Infrastructure developers and other potential clients 9. Government
Stakeholders
These are boilerplate climate clauses applicable to all transaction documents (whether for project or financial intermediary) but will need to be adapted for the relevant circumstances.
Application
There are clearly complicated geopolitical and local issues to consider alongside this clause which are outside of the scope of the drafting and will have to be considered as part of the specific deal or project.
Drafting will need to be adapted depending on project location and jurisdiction.
These climate standard terms consolidate, adapt and supplement elements of (i) Lauren’s clause; (ii) Bella’s clause; and (iii) Harrison’s clause. Relevant clauses from the Playbook can be added as appropriate for each transaction.
Users can consider whether these can be pushed down to client’s contractors and sub-contractors. There will be questions on the practical reality of this for the project team to consider.
Notes for users
The practicality and funding of carbon measurement and reporting will need to be decided early on. This may need to be aligned to existing ESG reporting so as to avoid duplication. However, the Climate Standard Terms have been drafted as separate and distinct from other ESG clauses, including compliance with environmental law. This is to highlight that climate change is not just a matter of compliance (or breach) of environmental law, but requires separate consideration. Reps and warranties regarding environmental law are captured under ESG terms. The clauses are currently drafted on the basis that the carbon footprint of a financial intermediary includes the carbon footprint of any investments that the financial intermediary makes using impact investor’s funding. These could be separated as required.
Additional Recital (A) The [Parties] wish to align the [operation and management of the Company] with Sustainability Goals. Additional Definitions Business Purpose means the [insert summary of activities of the Company].
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