More than 90% of an organisation's impact on the environment comes from its supply chains.1 It is not surprising therefore that we are seeing a trend towards businesses focusing on how they can reduce that aspect of their carbon footprint.
A key part of that will be reviewing and using supply contracts to ensure that measures are in place at all stages of the supply chain.
Our specialists can support you with that process – acknowledging that the wide range of legislation applicable to this area and the breadth of environmental, social and governance (ESG) as an issue makes that a dauting and a difficult task.
Aligning your contracts with your objectives
We are increasingly seeing organisations setting themselves environmental targets and looking for ways to create long-term value by embedding sustainability into their operations.
There are, of course, many drivers for that trend – for example, investors and other stakeholders are increasingly demanding transparency on ESG issues and research by various bodies has identified that customers are willing to spend more on sustainable products2. This is putting environmental performance in the spotlight and pushing supply chain executives to increase their efforts to ensure they have sustainable supply chain operations.
Organisations at all levels are working to ensure they are being efficient with their use of natural resources, setting decarbonisation goals and homing in on ethical sourcing and fair trade as part of their larger ESG initiatives. They are looking to reduce risks, increase innovation and generate a stronger return on investment.3 Failure to adopt this approach risks being left behind competitors as well as other financial consequences (not complying with certain ESG regulations can result in substantial fines, negatively impacting a company's bottom line and attractiveness to investors).
Some organisations will be further along in that journey than others and, as such, the specific objectives of an organisation will be influenced heavily by their sector, culture and business aspirations.
Having gone through that process ourselves, we know from creating our own sustainability report that there are various "shades of green" when it comes to what you may need and/or want, and that is where we can help.
What is our Green Contract Toolkit and how can it help you?
As specialists in drafting contracts of all shapes and sizes, we have created a Green Contract Toolkit to support with you with a refresh of your supply chain contracts.
We understand the importance of meeting climate and ESG targets, particularly when they have been announced and committed to publicly. We also recognise that the legislative landscape in this area is not an easy one to navigate and it is heavily impacted by the sector within which your organisation operates.
Our Green Contract Toolkit recognises the need for a mix of light touch clauses in some situations as well as more detailed, and sector specific, provisions in others.
It empowers you to strengthen your contracts and align them with your environmental goals, turning them into effective tools to drive you forward on your ESG journey and providing a framework to help future-proof profits.
Footnotes
Footnotes
1. Reducing the environmental impact in supply chains
2. PwC 2024 Voice of the Consumer Survey
3. How sustainable supply chains are driving business transformation
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