Formalise sustainability expectations
The sustainable technical specifications included in the tender documents can now become a part of the contract once the supplier is selected. Building upon any technical specifications and award criteria, use contract clauses and conditions to outline sustainability expectations. For example, product end-of-life management responsibilities, data sharing and disclosure requirements, or incentives and/or disincentives for sustainability performance.1 2 Performance-based sustainability clauses can offer supportive price adjustments, contract extensions, favourable payment terms, or flexible timelines based on realistic and measurable sustainable outcomes and associated KPIs.
EXAMPLE: Vodafone and CDP's finance framework to encourage supplier carbon reduction3
Vodafone and CDP created a framework offering preferential financing rates to suppliers to reduce carbon emissions. Suppliers' environmental performance determines their financing rates. Initially available to Vodafone's suppliers via Citi, the initiative aims to reduce carbon emissions and contribute to Vodafone's Scope 3 emissions targets. This model is expected to expand industry-wide.