Promoting Sustainability in Supply Management Through Proactive Contracting and Legal Design

As the number of sustainability laws and regulations increase and stakeholders become increasingly concerned about the sustainability impacts of commercial activities, companies need to integrate environmental, social, and economic considerations not only in their own operations but also in their relationships with suppliers and throughout their value chains. Contracts will play a key role in promoting sustainability as they contribute to holding together the links and nodes in global supply chains. A key question, then, is how to integrate sustainability mechanisms into supply contracts and contracting processes. This article proposes proactive contracting and legal design as approaches to promoting sustainability in supply management. It uses a “jigsaw puzzle” metaphor to outline key elements at the intersection of the literature streams on proactive contracting and legal design and purchasing and supply (chain) management and proposes routes for further research to fill the identified gaps.