Clyde & Co

Leveraging climate contracts to drive sustainable procurement

Clyde & Co is a global legal services firm with operations in multiple countries. The organisation has pledged to significantly cut its greenhouse gas (GHG) emissions in the short term under the Science Based Targets initiative (SBTi). By 2030, they aim to achieve an 80% reduction in absolute scope 1 and 2 emissions, using 2019 as the baseline year. The firm also plans to lower absolute scope 3 emissions by 50% within the same period and achieve net zero by 2038.

To achieve these goals, Clyde & Co recognised the need to embed sustainability within its procurement practices. Guided by its commitment to addressing climate impact, the firm utilised legal resources from The Chancery Lane Project (TCLP) to integrate climate clauses into its supplier agreements.

With an annual procurement budget of £400 million and a supply chain encompassing suppliers in facilities, IT, HR, and legal technology, the organisation faced both challenges and opportunities in implementing sustainable practices. 

Main objectives

The firm aimed to embed sustainability into its procurement practices in a way that would deliver measurable and enforceable results. This started with incorporating sustainability clauses into procurement contracts to ensure suppliers actively contributed to the firm’s long-term carbon reduction targets. Beyond contractual obligations, the firm sought to build its internal capacity to manage and monitor these commitments effectively, integrating them into broader environmental, social, and governance (ESG) goals.

 “We believe that the incorporation of green clauses into our supply contracts sets clear standards, expectations and measures of accountability that help our supply chain partners to align with our sustainability goals. By incorporating these clauses into our operations and that of our suppliers, we not only contribute to our collective ESG commitments, but we also cement relationships with those partners who value sustainable practices,” said Patrick Linighan, Chief Sustainability Officer.

Navigating sustainable procurement challenges

With operations spanning multiple regions and a diverse supplier network, many of which handled localised procurement needs, the firm had to adapt its approach to ensure sustainability measures fit different contexts.

The unique nature of the legal industry added another layer of consideration. Client-specific disbursements, such as external counsel fees, case-related travel, and discovery services, represented a significant portion of spending. These expenditures required careful thought to align sustainability goals with client-driven needs.

In supplier negotiations, the firm sometimes worked with larger providers who operated under their own standard agreements. While this occasionally left less room for customisation, it provided opportunities to explore collaborative discussions about sustainability commitments.

Additionally, some suppliers were in the early stages of their sustainability journey. Supporting them in developing tools to track metrics like carbon footprints became a valuable step in implementing meaningful and measurable targets.

Implementing sustainable procurement solutions

The firm adopted a proactive and structured strategy. It incorporated The Chancery Lane Project’s (TCLP) clauses into procurement contracts to embed climate commitments across its supply chain. These included Owen’s Clause a net zero commitment clause that aligns a business’s carbon reduction target with its supply chain and business partners. The clause encourages downstream commitments across suppliers’ networks. The firm also adopted Agatha’s Clause which allows organisations to open constructive dialogue and practices with suppliers if the agreed-upon sustainability goals aren’t met.

Clyde & Co also implemented a flexible, three-tiered approach to supplier contracts. In scenarios where suppliers could accept the firm’s terms, TCLP-aligned sustainability clauses were embedded directly into contracts. For contracts governed by suppliers’ terms, sustainability commitments were incorporated through negotiated addenda. During tenders, the firm incorporates sustainability requirements and agreement to TCLP aligned clauses as part of its selection process. This ensured that sustainability expectations were communicated upfront. Unlike traditional supplier codes of conduct, which often provide general guidance, these sustainability clauses were treated as binding contractual obligations. Suppliers were informed that the terms were enforceable, ensuring accountability and compliance. In instances where suppliers couldn’t accept the terms, Clyde & Co would engage in meaningful dialogue to understand their blockers and work to find a solution.

Internally, procurement teams received targeted training on the updated contract templates and the rationale for the sustainability clauses. Contract management systems were upgraded to flag agreements containing sustainability commitments, improving tracking and visibility.

This comprehensive approach allowed the firm to navigate its complex supplier landscape while establishing a foundation for measurable progress in its sustainability initiatives.

Organisational benefits

The integration of sustainability into procurement processes has delivered significant benefits for the firms and suppliers. Supplier agreements now enforce measurable carbon reduction targets, ensuring improved accountability throughout the supply chain. Collaboration with suppliers has fostered innovation, with many viewing these commitments as opportunities to develop new, sustainable practices, enhance competitiveness and build stronger customer relationships. By embedding sustainability clauses into standard contract templates, the firm has streamlined compliance and made sustainability an integral component of its procurement processes. This strategic shift has positioned the firm to achieve long-term sustainability goals while reinforcing its commitment to ESG principles.

What’s next?

Looking ahead, the firm remains committed to strengthening its partnerships with suppliers to advance carbon measurement and reduction initiatives. It will continue to monitor the effectiveness of the TCLP clauses and make adjustments as necessary to ensure they remain impactful. The firm aims to inspire similar efforts among its industry peers by sharing progress and lessons learned. Beyond compliance, the organisation views sustainability as a moral imperative as well as a potential source of competitive advantage, with plans to promote it as a key consideration in supplier selection.

This comprehensive approach reflects the firm’s dedication to embedding sustainability into every aspect of its operations and developing long-term partnerships with suppliers to help achieve this. By aligning procurement with its ESG objectives, the firm is building a strong foundation for achieving its 2030 targets and advancing its sustainability mission for years to come.