Shared value contracting: reconfiguring contractual governance under mandatory sustainability regimes

Purpose This study aims to address a governance challenge emerging under mandatory sustainability and human rights due diligence regimes. As responsibility increasingly extends across interdependent value chain relationships, firms face growing pressure to integrate legally mandated sustainability obligations into the structures through which economic coordination and value creation are organized. The study examines how contractual governance can move beyond compliance and risk allocation to support both regulatory implementation and value creation. It develops the concept of shared value contracting to explain how contractual governance can integrate legally mandated responsibility and economic coordination across contemporary value chains. Design/methodology/approach The research adopts a conceptual theory-building approach. It examines the governance implications of mandatory sustainability and human rights due diligence regimes and synthesizes insights from legal strategy, proactive contracting, contractual governance, shared value and sustainability governance scholarship. Through this synthesis, this study develops shared value contracting as a conceptual framework for understanding how contractual governance can integrate regulatory responsibility and economic coordination across interdependent value chain relationships. Findings The analysis suggests that mandatory sustainability and human rights due diligence obligations create a governance challenge concerning how regulatory responsibility is integrated into interorganizational coordination across value chains. Sustainability obligations that remain external to the governance structures organizing economic activity risk becoming disconnected from incentives and operational coordination. The analysis identifies shared value contracting as a contractual governance configuration through which economic coordination and legally mandated responsibility can be jointly organized. The framework is structured around three interrelated dimensions: value-logic integration, incentive alignment and operational governance routines. Originality/value The study contributes to shared value theory by providing a governance-oriented explanation of how economic and societal objectives can be operationalized across interdependent value chain relationships. Building on insights from proactive, functional and responsible contracting scholarship, it positions contractual governance as part of the strategic organization of value chain coordination under mandatory sustainability regimes. The study introduces shared value contracting as a novel conceptual framework that reconceptualizes contractual governance as the organizational interface through which regulatory responsibility, economic coordination and interorganizational value creation are jointly organized.