Contracts for Climate Change (June21) Investment and M&A cl…

Contracts for Climate Change (June21) Investment and M&A cl…

Contracts for Climate Change Investment and M&A clauses 2

SPA/ INVESTMENT AGREEMENT DISCLOSURE OF CLIMATE CHANGE PLANS — ZACK’S CLAUSE #netzeroemissions #emissionreduction #climatechange Issue There is a perceived lack of engagement of managers in businesses to work towards a Net Zero emissions economy. Solution Zack’s Clause would introduce climate disclosure warranties in M&A or investment transactions requiring a company to explain its actions/plan for reaching Net Zero emissions in its business. Impact Absence of actions or plan to reduce emissions in its business could negatively impact on price of the target company thus encouraging the management to take a more proactive approach to climate matters. Each of the precedents has a child’s name chosen by the drafting team. This is to encourage long-term thinking and to focus on the next generation as they will be most affected by the serious consequences if we fail to effectively respond to the climate crisis.

CLIMATE AND NET ZERO DUE DILIGENCE QUESTIONNAIRE

— LOLA & HARRY’S DDQ #duediligence #awareness

Issue Currently due diligence questionnaires only cover generic compliance issues providing a limited understanding of a target company’s sustainability and long-term viability. Solution Lola & Harry’s Due Diligence Questionnaire would surpass standard compliance checks to extract key information regarding a broad range of climate related issues from the target company. Impact This questionnaire would provide awareness of a target company’s stance and performance in relation to Climate Change matters, which could influence negotiations, the investment agreement or post-acquisition strategy.