Securing climate targets using corporate contracts

Companies seeking to accelerate their role in the climate transition are well advised to link sustainability and law, and commercial contracts can go a long way to secure corporate strategic goals. A new book highlights the connection between law and sustainability, and the role of contracts.

When U.S. climate envoy John Kerry addressed members of The American Bar Association with the call ”You are all climate lawyers now, whether you want to be or not,” he highlighted the role of law in the climate transition. Around the same time, bar associations in several countries took initiatives to support an increased contribution by lawyers in the transition. In Sweden, a new book by David Frydlinger, partner at the Swedish law firm Cirio, adds to this trend as it describes in detail the role of law not only in climate issues but also in larger sustainability issues. The book Rules of the Game for Sustainable Business (Sw. Spelregler för hÃ¥llbar affärsverksamhet) is well placed in the bookshelf of every sustainability manager and inhouse counsel.

After a reasonably detailed overview of the sustainability legal framework, David Frydlinger describes the role of commercial contracts in sustainability work. Corporate contracts play a key role in incorporating sustainability ambitions into daily operations, and, in the words of the author, an unsustainable business ”is unsustainable largely because of how contracts that build the business are written.”

Commercial agreements are thus an important building block in sustainability work, but an element of sustainability that is rarely considered. Sustainability literature in general contains few analyses of the role of contracts. This makes David Frydlinger’s book particularly interesting for companies that seek to accelerate their contribution to a sustainable future. It describes the fundamental societal role of the contracts and also illustrates how a company’s ambition to contribute to societal change can (and should) be merged with the daily work of lawyers, whether acting as inhouse counsel or external advisors.

The book’s conclusions on the importance of contracts for sustainable business are also supported elsewhere. The international initiative, The Chancery Lane Project (TCLP), publishes model clauses for the green transition in virtually all areas of commercial law. The initiative currently engages over 3,500 lawyers who contribute their expertise pro bono to the development of new clauses. The ”green clauses” are freely available on TCLP’s website and are used both by private and public actors, and by law firms worldwide, currently amounting to nearly 400 organizations in over 100 countries.

David Frydlinger’s book has attracted a lot of attention after its publication. This is well deserved. The book highlights the importance of commercial contracts as societal building blocks and will hopefully contribute to strengthening the use of law and contracts in the transition towards a more sustainable world.

Companies seeking to accelerate their role in the climate transition are well advised to link sustainability and law, and commercial contracts can go a long way to secure corporate strategic goals. A new book highlights the connection between law and sustainability, and the role of contracts.

Annette Magnusson
CEO and co-founder, Climate Change Counsel