Corp Clauses

Corp Clauses

Contracts for Climate Change Summaries of Corporate Clauses

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.

DRAFT PARIS-COMPLIANT OBJECTS CLAUSE (FOR USE IN COMPANY’S ARTICLES

ENVIRONMENTAL BUSINESS CHARTER — CHLOE’S CLAUSE

OF ASSOCIATION) — ARLO’S CLAUSE

#greencity #responsiblebusiness

Issue It is often difficult to raise environmental concerns in the corporate context given the absence of green standards. Solution Environmental Business Charter would integrate green business standards into the corporate environment. It would make environmentally conscious ways of conducting business – such as virtual meetings and offsetting of unavoidable GHG emissions – a default practice. Impact Environmental Business Charter would provide a common language for businesses to adopt when discussing environmental considerations and thereby contribute to a more climate-conscious conduct of business.

#responsiblecompanies #directorsduties

Issue There are no constitutional limits to a company’s capacity to have a negative climate impact. Solution Arlo’s Clause would assist legal service providers (including lawyers and company formation agents) in promoting the insertion of environmental articles into a company’s Articles of Association, including obligations to meet certain environmental standards. Impact The clause would give the appropriate weight to environmental factors in the Articles of Association, directors would be incentivised to act and companies would be encouraged to work towards positive environmental targets.

CLIMATE CHANGE ALIGNED BOARD MINUTES — DARCY’S MINUTES

#responsiblebusiness #directorsduties

Issue Section 172 of Companies Act 2006 requires directors to take a “shareholders first” approach to running a company which encourages short-term financial performance. Solution The board minutes would introduce specific drafting to encourage directors to consider environmental and social impact objectives, Net Zero targets and climate risks as part of their decision-making. Impact The standard board minute drafting would ensure that boards are mindful of environmental objectives, impacts and risks. It would also introduce consequences with a tangible impact on financial performance and future strategy.