Core Principles of Responsible Contracting
RCP’s mission is to drive better outcomes for people and the planet through better, more Responsible Contracts. With Responsible Contracts, both parties—buyers (e.g., brands, retailers) and suppliers (e.g., manufacturers, farms)—each do their part to uphold human rights and environmental standards and work together to address problems when they arise. These contracts follow these three core principles, known as the “4Rs” of Responsible Contracting:
Remediation first
If harm occurs, remediation to victims is prioritized ahead of traditional contract remedies, e.g., order cancellations, suspension of payments, penalties.
Responsible purchasing practices
Buyers commit to responsible purchasing practices that support positive human rights and environmental outcomes, e.g., fair prices, reasonable deadlines, and adequate assistance.
Responsible exit as a last resort
Contract termination can be pursued only as a last resort and must be done responsibly, after taking steps to assess and address the impacts of exit.
Responsibility for human rights and the environment is shared
The parties contractually commit to work together to uphold human rights and environmental standards. Responsibilities are allocated based on each party’s size and circumstances, e.g., sector, geopolitical context, influence in the supply chain.
2
1
3
4
​Following these core principles is crucial for moving from traditional to Responsible Contracting.
Traditional Contracts
One-sided promises of perfect compliance
In traditional contracts, the supplier guarantees perfect compliance with the buyer’s code of conduct and makes unrealistic promises that its supply chain is free of human rights and environmental issues. The buyer, meanwhile, has no contractual obligations to uphold human rights and environmental standards or to support the supplier in doing so.
What’s more, any imperfection or deviation from the code of conduct is treated as a breach of the entire contract that allows the buyer to cancel orders, freeze payments, and terminate the contract.
Responsible Contracts
Buyers and suppliers share responsibility for human rights and the environment
​
In Responsible Contracts, the buyer and the supplier commit to work together to address harmful human rights and environmental impacts (“adverse impacts”) as they arise. The parties set aside one-sided promises of perfect compliance in favor of a joint commitment to cooperate in carrying out HREDD.
Human Rights and Environmental Due Diligence before (HREDD), which emerged from the UNGPs, is an ongoing and dynamic process where the parties engage with stakeholders (e.g., workers, communities, civil society organizations) to understand the problems on the ground and take proactive steps to prevent and remedy harm. HREDD does not expect perfection, but rather continuous improvement.
From Traditional to Responsible Contracting
Traditional contracts are ineffective for protecting people and the planet because they push all the responsibilities for human rights and the environment (HRE) onto the supplier and ignore the buyer’s role in contributing to adverse impacts. Responsible Contracts offer a blueprint for due diligence-aligned contracting by translating the UNGPs and the OECD Guidelines and Due Diligence Guidance into contractual obligations.
Critically, to operationalize each company’s individual responsibility to respect human rights (the “R2R”), contracts must commit both parties to uphold HRE standards and work together to address problems that arise. Here is an overview of the key shifts from traditional to Responsible Contracting:
Traditional Contracts
No buyer obligations regarding purchasing practices
​
In traditional contracts, there is no requirement for buyers to consider how their own purchasing practices (e.g., pricing, deadlines, and order changes) can contribute to adverse impacts or to ensure their practices support positive outcomes for human rights and the environment.
Examples of poor purchasing practices include imposing unrealistic deadlines, prices that are too low to cover production costs (let alone living wages), making last-minute order changes, requiring suppliers to meet rigorous sustainability standards and cover related costs without providing adequate assistance.
Poor purchasing practices can create serious commercial pressures on suppliers, which can, in turn, impact the supplier’s ability to uphold human rights and environmental standards.
Responsible Contracts
Buyer commits to responsible purchasing practices
​
In Responsible Contracts, the buyer commits to responsible purchasing practices, including negotiating with suppliers to agree to a price that covers the costs associated with responsible business conduct (e.g., living wages, health & safety costs) and responsible payment terms (e.g., paying invoices promptly after receipt of goods), providing reasonable HREDD-related assistance (e.g., training or financial support), and not over-burdening suppliers with unreasonable information requests.
Buyers also commit to adjust their practices to support their suppliers in meeting human rights and environmental standards.
These commitments are critical for effective HREDD and for buyers to meet their own HREDD obligations.
Traditional Contracts
No mention of remediation
​
In traditional contracts, the buyer is allowed to immediately terminate the contract (“cut and run”) if a human rights or environmental violation is discovered. There is usually no mention of providing remediation to victims (e.g., workers and their communities) to address the harms they may have suffered as a result of the violation.
Contracts that allow cut-and-run termination (“irresponsible exits”) in response to violations or adverse impacts are not appropriate or effective from an HREDD perspective. On its own, exiting the contract does nothing to help affected rights-holders. It also does nothing to end violations or to prevent their recurrence. In fact, irresponsible exits can result in further harm, e.g., unemployment, wage theft, or pushing workers into deeper vulnerability and higher-risk situations.
Responsible Contracts
Victim-centered remediation and responsible exit
​
In Responsible Contracts, remediation for victims is prioritized over traditional contract remedies, e.g, cancelling orders, suspending payments, or terminating the contract. The buyer and the supplier commit to restore victims to the situation they would have been in had the violation not occurred, where possible. Remediation could take the form of apologies, restitution, rehabilitation, financial and non-financial compensation, or taking measures to prevent recurring harms or new impacts.
Contract termination or exit can be pursued only as a last resort, if remediation has failed or is determined to be out of reach (e.g., in the case of state-employed forced labor). Further, if they decide to terminate, the buyer must pursue a responsible exit, meaning they must assess any negative impacts and take measures to avoid or mitigate those impacts. In any exit, the buyer must give the supplier reasonable notice and pay for outstanding invoices.
Latest News
-
August 25 — RCP announced a new collaboration with UN Global Compact Network Germany: a three-part webinar series on Responsible Procurement covering "Responsible Procurement and Shared Responsibility" (Oct 22), "Responsible Purchasing Practices" (Nov 11), and "Responsible Contracting" (Dec 2), with RCP Director Sarah Dadush speaking at the December session.
​
-
August 12 — RCP submitted its response to the European Commission's public consultation on CSDDD implementation guidelines, calling for shared responsibility and human rights and environmental due diligence to be embedded in international supply contracts.​
​
-
July 22 — RCP launched its latest tool, the Responsible Contracts in the Cobalt Industry guidance, developed in collaboration with the Cobalt Institute.
​​​
-
May 1 — RCP published a new analysis of the CSDDD and contracting in light of Omnibus I on the Oxford Business Law Blog: Moving Toward Shared Responsibility: How the EU’s CSDDD and Omnibus I Reimagine Contracting for Human Rights and Environmental Due Diligence. Also available as a PDF.
​
-
April 27 — RCP Director Sarah Dadush and Senior Advisor John Sherman co-authored an essay for Shift's series marking the 15th anniversary of the UN Guiding Principles on Business and Human Rights (UNGPs), titled, From Social Norm to Legal Practice: Fifteen Years of Integrating the UNGPs into Business Law.​
​
Events
-
August 11 — RCP Lead European Legal Advisor Daniel Schönfelder joined "Making Sustainable Contracts Work in Practice," a WorldCC Foundation panel in the APAC Summit's virtual program, alongside Anne Ketola of Tampere University and Ro Coroneos of Praxis ESG, moderated by Gitika Makker of Nexdigm, discussing practical tools for embedding sustainability into contracts, including RCP's toolkit. Watch the recording.
​
-
June 30 — RCP Director Sarah Dadush joined Observatoire de la Responsabilité Sociétale des Entreprises (ORSE) and PwC Société d'Avocats in Paris for the launch of ORSE's updated ESG regulations guide, discussing the shift from risk-transfer contracting to cooperation-based approaches reflected in the CSDDD.
​
-
June 2 — RCP Director Sarah Dadush facilitated "Contracting for Sustainability," a workshop at the 2026 Annual Conference on Legal Issues in Social Entrepreneurship and Impact Investing, co-organized by NYU School of Law's Grunin Center and the Impact Investing Legal Working Group, drawing over 40 participants.
​
-
May 19 — Senior Advisor Ben Rutledge spoke at the Sustainable Vanilla Initiative (SVI) General Assembly in Paris, joining industry members and value chain actors for a session on governance, procurement, and collective action in the vanilla sector.
​
-
May 14 — Senior Advisor Ben Rutledge presented RCP's Responsible Contracting in Spice Supply Chains Guidance at the Sustainable Spices Initiative (SSI) General Assembly 2026 in Murcia, Spain, attended by nearly 100 delegates from around 50 organizations.​​
​​
​
In Collaboration with
