ESG Supplier Code of Conduct (Customer Version)
Businesses are increasingly trying to tackle ESG issues.
As part of their efforts to do so, businesses buying goods and services often try to ensure that their suppliers, as part of the buyer’s supply chain, also address ESG issues.
Use this template to create an ESG supplier code of conduct
A buyer might require its suppliers to meet ESG standards laid down by the buyer in a supplier code of conduct produced by the buyer.
In that way, the buyer can create a means whereby its suppliers assist it to adhere to the buyer’s own ESG principles, policies, standards and processes.
This ESG Code of Conduct for Supplier (Customer Version) is a template / checklist that a buyer can use as a starting point when creating an ESG supplier code of conduct.
The content of the buyer’s standard supplier code of conduct will depend in each case on the particular type, size, circumstances and requirements of the buyer in question.
How the code is used with suppliers
Once it has been finalised, the document can be given by the buyer to each supplier with the request that the supplier should adhere to the Code’s contents for as long as they remain a supplier to that buyer.
Making suppliers contractually bound to comply
When a buyer has created its ESG Supplier Code of Conduct, it might then establish a mechanism for ensuring that its suppliers are legally bound to adhere to that Code.
A buyer can achieve this by inserting in its purchase contracts with its suppliers a suitable contract clause whereby the supplier formally undertakes to meet the requirements of the Code.
There is a template contract clause of that type, the here. That template clause can also be found here and here.
Tailoring and stakeholder impact
The drafting of both the Code and the contract clause will need to be tailored to each buyer’s own needs and circumstances.
Use of an ESG Supplier Code of Conduct (and inclusion of an ESG legal compliance clause in the contract with the supplier) can help to promote compliance by suppliers with the buyer’s ESG and legal requirements.
It can also serve to demonstrate to a buyer’s customers, staff, investors and other stakeholders that the buyer is serious about ESG and that, wherever possible, it only deals with suppliers who are prepared to meet stringent contract requirements relating to the ESG and other requirements of the buyer.
ESG Supplier Code of Conduct (Customer Version) is part of Corporate. Just £38.50 + VAT provides unlimited downloads from Corporate for 1 year.