Clauses for causes - how to get CSR topics into the minds of suppliers without pushing them away?

Have you stared at a contract, thinking about all the business that will be done under it, and wondered why it doesn't even mention some of the really big topics of the day? Yeah, me too. Surely, contract clauses are a way to make some real changes in this world.

The conversation between lawyers and business stakeholders normally ends up with everyone kind of wanting to impose do-gooder clauses into the contract but wondering whether it is worth the push back from the other side.

I think they should be included, and can help you do it in a low-friction manner. Acknowledging that sometimes the main subject matter of the agreement is just too important to let CSR get in the way (the argument I have witnessed, and possibly made, several times), this approach can work.

1. Pick your topic

   There are many subjects that you could attempt to cover in contract clauses. Sustainability is an obvious one. The requirements and expectations relating to sustainability are growing in complexity and seriousness, and it makes sense to start including sustainability clauses as a matter or normal practice. To really make a difference, pick a topic that relates to a known issue in your business or sector and have in mind applying new obligations to the entire supply chain relating to specific products, services, sites or business units. The cynic in me says pick a topic that goes together with a good marketing story. Other ideas include: modern slavery, living wages, diversity and inclusion, minimising use of plastics, removing unethically sourced materials, and anti-bribery and corruption.

2. Draft a bespoke clause

   This should reflect your specific objectives, which might mean referring to particular legislation, standards or forms of data. You know your suppliers best, and you know your bargaining position, so you will need to think about what you can realistically achieve in supplier negotiations. The best clause is one that is reasonable enough to not be a major red flag to a supplier and robust enough to not be a damp squib to a stakeholder. Keep everyone happy, but remember you will need to show your return on investment.

3. Add the clause to template agreements - new suppliers

   Find an appropriate place in your template agreements and slot in the new clause. If you think it just won't fit in, then consider designing it as a side letter to go with any of your template agreements or as a stand-alone document.

   Once approved, try to get it into every new agreement. Say it's a matter of policy (suppliers will love that argument; ok that's a lie, but it is the right thing to do).

4. Draft a new variation agreement or side letter - existing suppliers

   The document should be simple enough that a supplier could not reasonably argue that it is going to be a complex or lengthy process to get it reviewed and approved. They might say that anyway.

   If there is a need to update or amend the existing agreement for any other reason, use that as the opportunity to introduce the new clause. If there is anything they need from you, then you need this from them.

5. Stick at it and work towards realistic objectives

   You will need to use your powers of persuasion. And some suppliers will be difficult. But stay motivated by the good that will be done and focus on the suppliers that have a long-term relationship to bear in mind.

   Once the approach has worked for a proportion of your suppliers, then think about how vigorously the clause should be enforced, what to do about the suppliers that were not cooperative, and how to build the approach into procurement documents and practices too.

It can work! It can make a difference. We can assess your objectives, draft the documents, and negotiate with suppliers. All you need to do is feel good about the results. Contact harry@hamiltonlawscientific.com for a free consultation and proposal for cost-effective legal support.