Environmental matters: Overview, definition, and example
What are environmental matters?
Environmental matters refer to legal and regulatory issues, responsibilities, and risks related to environmental protection, pollution, and sustainability. These can include compliance with environmental laws, management of hazardous materials, adherence to sustainability practices, or remediation of environmental damage.
For example, environmental matters might address a company’s obligation to properly dispose of industrial waste, comply with air and water quality standards, or mitigate the environmental impact of a development project.
Why are environmental matters important?
Environmental matters are important because they help businesses manage risks related to environmental damage and ensure compliance with environmental laws and regulations. Non-compliance can result in severe penalties, reputational damage, and costly litigation. Additionally, businesses that prioritize environmental responsibility often gain a competitive edge by appealing to environmentally conscious customers and stakeholders.
Addressing environmental matters in contracts ensures that all parties understand their responsibilities, reducing the likelihood of disputes and protecting against unforeseen liabilities.
Understanding environmental matters through an example
Imagine a manufacturing company leases a property for its operations. The lease agreement includes a clause requiring the tenant to comply with all local environmental laws, such as regulations on waste disposal and emissions. If the company violates these laws and causes pollution, it may be held liable for cleanup costs, penalties, and damages.
An example of an environmental matters clause
Here’s how an environmental matters clause might appear in a contract:
“The Parties shall comply with all applicable environmental laws and regulations in the performance of their obligations under this Agreement. Each Party agrees to indemnify and hold the other Party harmless from any liabilities, fines, or damages arising out of its failure to comply with such laws.”
Conclusion
Environmental matters clauses help businesses navigate their environmental responsibilities and manage potential risks. By addressing these issues upfront, contracts ensure compliance with laws, reduce the risk of penalties, and promote sustainable practices. Including clear provisions for environmental matters is not just about legal compliance—it’s a critical step in building responsible and sustainable business practices.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.