How sustainability obligations are being incorporated into contractual agreements

Due diligence and sustainability rules mean ESG clauses are more prevalent in commercial contracts – but the development is also giving rise to more disputes

A greater focus on supply chain sustainability and transparency has triggered legal changes to commercial contracts, with sustainability requirements being increasingly imposed and negotiated in business transactions. A recent report by the International Bar Association names the rise in legislation, regulation and voluntary standards as the main reasons for an uptick in environmental, social and governance clauses in the past decade.