Terms to Include in Your Next Procurement Event

Including sustainability terms into your procurement is a great way to drive climate action in your supply chain, here are some recommendations.

Gold star if you do them all but starting with a few then building is a great approach too:

1. Emissions Targets: The contract could stipulate that the supplier commits to Science Based Targets (SBTs) for greenhouse gas emissions reduction. This might involve the supplier committing to reduce their emissions in line with the level of decarbonization required to keep global temperature increase below 2 degrees Celsius compared to pre-industrial temperatures, as per the SBTi. They could also set more ambitious targets, in line with a 1.5-degree pathway. This not only helps to limit their contribution to global warming but also aligns their business strategy with a low-carbon economy. The supplier would need to set SBTs, submit them for validation by SBTi, and then implement strategies and practices to achieve those targets. Regular reporting on progress towards these SBTs could also be a requirement in the contract.

2. Waste Management: The supplier could follow the waste hierarchy as defined by the European Union Waste Framework Directive (2008/98/EC), which prioritizes waste prevention, followed by re-use, recycling, and other forms of recovery. The supplier might also need to adhere to local waste management regulations.

3. Energy Efficiency: Energy efficiency could be required to meet the standards set by the Energy Star program, a joint program of the U.S. Environmental Protection Agency and the U.S. Department of Energy that promotes energy efficiency.

4. Carbon Offsetting: The supplier might need to purchase Verified Carbon Units (VCUs) through a recognized carbon offset standard such as the Verified Carbon Standard (VCS) or Gold Standard, which ensure the environmental integrity and credibility of the carbon offsets.

5. Reporting: The contract could require reporting in line with the Global Reporting Initiative (GRI) Standards, which are the first and most widely adopted global standards for sustainability reporting.

6. Certifications: ISO 14001, maintained by the International Organization for Standardization (ISO), could be a requirement. This standard provides a framework for organizations that are looking to manage their environmental responsibilities.

7. Audit Rights: Third-party audits could be conducted by organizations like the Carbon Trust or SGS, which offer a variety of environmental and sustainability certification, verification, and auditing services.

8. Renewable Energy Use: The contract might require that a specific amount of the energy used by the supplier is certified by Renewable Energy Certificates (RECs) or Guarantees of Origin (GoOs), which ensure that the energy was generated from renewable sources.

9. Packaging: The contract could require adherence to the packaging guidelines established by the Sustainable Packaging Coalition (SPC) or similar bodies, or that packaging must meet the standards to be considered recyclable under local or national recycling schemes.

10. Lifecycle Analysis: The supplier could be required to conduct lifecycle analyses following ISO 14040 and ISO 14044 standards, internationally recognized principles and framework for conducting and reporting life cycle assessment studies.

11. Climate Risk Assessment: The supplier could be asked to assess climate-related risks using guidelines such as those developed by the Task Force on Climate-related Financial Disclosures (TCFD). This body provides a framework for companies to disclose climate-related risks and opportunities in their financial filings.

12. Compliance: This could involve compliance with the European Union’s Registration, Evaluation, Authorization and Restriction of Chemicals (REACH) regulations, or U.S. laws like the Toxic Substances Control Act (TSCA) or California’s Proposition 65, all of which regulate the use of certain substances in products.

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Reduce emissions with actionable insights on all your suppliers, embedded seamlessly into your procurement stack

Get total coverage of your supply chain

Reduce emissions with actionable insights on all your suppliers, embedded seamlessly into your procurement stack