Empowering Change: How ESG Clauses Can Support Sustainability

According to the 2024 MIT State of Supply Chain Sustainability report, organizations today are feeling increased pressure to make their supply chains more sustainable. Many of these pressures are coming from investors and customers, and most companies reported not having the necessary resources to achieve their ongoing sustainability goals.

Thanks to Environmental, Social, and Governance (ESG) clauses, organizations can address these challenges by taking climate-friendly and ethically aligned actions to make their supply chains more sustainable. 

Docusign is proud to announce a new partnership with Bonterms that makes it possible to standardize ESG clauses to enhance overall sustainability efforts and show more value to investors and customers. 

What are ESG clauses?

Overall, ESG is a framework used to evaluate the sustainability and ethical impact of companies and investments. According to EY, investors increasingly believe companies prioritizing ESG are less risky, better prepared for uncertainty, and well-positioned for the long term.

When ESG clauses are incorporated into contracts, organizations can tackle some of the most pressing global challenges, including environmental degradation, social inequities, and the need for responsible corporate governance. 

These clauses also set clear expectations, such as requiring suppliers to adhere to ethical sourcing practices, committing to emission reduction targets aligned with global climate goals, and enforcing labor standards to protect worker rights. 

By embedding these principles into contracts and policies, businesses can help their operations and value chains reflect a commitment to sustainability and fairness. These measures also resonate with stakeholders who prioritize companies that act as responsible global citizens.

Why ESG matters now more than ever

In today’s business landscape, ESG considerations have become an operational necessity. 

Global regulations such as the EU’s Corporate Sustainability Reporting Directive (CSRD) and California’s supply chain transparency laws raise compliance standards and reflect growing demands from regulators, investors, and customers for accountability on environmental and societal impacts.

ESG clauses in contracts and policies are essential for staying competitive, mitigating risks such as environmental damage, regulatory violations, and reputational harm, and positioning organizations as proactive leaders. 

These clauses build trust with stakeholders and help companies stand out amid mounting public and investor pressure. By adopting robust ESG commitments, organizations can navigate evolving regulations, differentiate themselves, and future-proof their operations.

Opportunities and challenges with ESG clauses

Implementing ESG clauses is often complicated by inconsistent drafting, variations in terminology and metrics, and difficulties in measuring compliance. These inconsistencies often create inefficiencies and hinder progress toward sustainability goals, making it harder for organizations to enforce and track their ESG commitments.

By standardizing ESG clauses, it’s possible to provide clear, consistent metrics and enforceability frameworks. This streamlines compliance, reduces administrative burdens, and facilitates cross-industry adoption. Standardization also enhances transparency and ensures organizations can effectively demonstrate their social responsibility.

Docusign partners with Bonterms for ESG clause standardization

Thanks to Docusign’s new initiative with Bonterms—a provider of Standard Agreements vetted through a 100-lawyer committee—it’s now possible to achieve true ESG clause standardization. Bonterms Standard Agreements are available without charge on an open-source model and cover the full range of IT transactions.

Starting with a focus on greenhouse gas emission standardization, this partnership reflects a shared commitment to simplify how organizations embed sustainability into their operations. Soon, the partnership will expand beyond emissions to include other critical ESG topics.

This new collaboration aims to remove common barriers, making it easier for organizations to adopt consistent and impactful sustainability practices. Serving as the host for these standardized ESG clauses, Bonterms will ensure they’re easily accessible and adaptable for a wide range of organizations. 

Businesses can easily implement ESG commitments to enhance how they manage greenhouse gas emissions across their value chain using pre-vetted clauses aligned with best practices. 

As organizations face increasing regulatory, investor, and public pressure to demonstrate their commitment to sustainability, ESG clauses are becoming indispensable. Standardizing these clauses is critical for streamlining adoption, ensuring compliance, and driving meaningful progress across industries. 

By leveraging platforms like Bonterms, organizations can easily integrate pre-vetted ESG clauses into their contracts, aligning their operations with best practices and sustainable goals. Now’s the time for businesses to embrace standardized ESG clauses and lead the way in building a more sustainable future.

Visit the Docusign sustainability page to learn more about how Docusign is committed to scaling global impact. 

Visit Bonterms to learn more about Standard Agreements.