Responsible Contracting in Sustainable Procurement
Supportive framework
Embarking on the responsible contracting journey
Companies interested in embarking on the responsible contracting journey can start by consulting and using RCP’s open-source Toolkit.
The Toolkit is a dynamic, open-access product that offers templates for due diligence-aligned contracting. All the tools are designed to align with the UNGPs, the OECD Guidelines and best practices emerging from human rights and environmental due diligence (HREDD) legislation. The Toolkit contains practical, immediately usable and versatile tools that companies can use to improve the human rights and environmental (HRE) performance of their contracts and, by extension, their supply chains.
Each of the tools can be selected, edited and adapted according to the user’s needs. The tools are modular, acknowledging that one size does not – and should not – fit all. Each element of the Toolkit can be used together or separately.
Case examples
A Dutch clothing and textile retailer has developed a two-way code of conduct that outlines the company’s own responsibilities for upholding human rights in collaboration with its suppliers. The code includes commitments to make “purchasing decisions that ensure good working conditions,” timely payments, responsible exits and to engage in open costing to ensure orders are not placed below production costs. It further includes a phased-in goal to pay living wages.
For companies that want more extensive support along the way, RCP offers informational webinars to explain the what, why and how of responsible contracting. RCP also conducts various types of gap analyses to assess due diligence alignment. The analysis can focus on the gaps between a company’s (or group of companies) supply contracts and one or more of the following:
- The company’s own code of conduct
- HREDD laws (e.g., the CSDDD and national rules such as the German Supply Chain Act)
- RCP’s Toolkit and model clauses
Using a two-way code of conduct for responsible contracting
The Ethical Tea Partnership (ETP) and RCP collaborated to develop the Tea Sector Model Clauses (TMCs), a set of model contract clauses aimed at improving HRE outcomes within the tea industry. The TMCs enable tea companies to embed shared responsibility for HREDD within their purchasing agreements, demonstrating sector-wide leadership for responsible business practices. ETP members are now required to begin embedding the TMCs into their purchasing agreements through ETP’s revised membership rules.
When it comes to monitoring and evaluation (M&E), companies can monitor and evaluate the HRE performance of their contracts through a combination of quantitative and qualitative methods. The M&E process should involve stakeholder engagement, buyer-supplier reviews, tracking HRE-related performance metrics and instituting HRE governance measures, such as an HREDD Monitoring Committees, to track grievances brought by workers or their representatives to ensure they are being effectively addressed and to verify the effectiveness of the HREDD process. M&E could result in a periodic review of contract terms.
Example module clause: Tea-Sector Model Contract Clauses (TMCs) 2024
Stakeholder Engagement: “Buyer and Supplier must meaningfully engage stakeholders such as workers, farmers, local communities and their Representatives, as well as other individuals or groups potentially or actually affected by an Adverse Impact at each step of the HREDD process. The parties may prioritise engagement according to the severity and likelihood of adverse impacts, but such stakeholder engagement must be ongoing, responsive, effective and conducted in a culturally appropriate format in a manner that is free of manipulation, discrimination, interference, coercion and intimidation. The parties shall provide stakeholders with the information necessary for them to meaningfully engage in the HREDD process.”
The example above is adapted from the Tea Sector Model Clauses (2024).
Improving HRE outcomes within the tea industry