What happens if sustainability commitments are not met?

Depending on how sustainability-related content is defined in the contract (for example, whether there are obligations or only expectations, whether the obligations relate to processes or outcomes, and whether the content forms part of the binding contract), a failure to comply may or may not be treated as a breach of contract. International and national legislation set different kinds of consequences (remedies) for contract breach, and the parties may also agree on different remedies in the contract.

Typical remedies for breach of contract include:

• Repair
• New delivery
• Price reduction
• Damages
• Contract termination (in cases of fundamental breach)

In relation to sustainability, contracts may also include compliance and corrective mechanisms, such as:

• prevention action plans (in the case of a potential adverse impact)
• corrective action plans (in the case of an actual adverse impact)
• suspension of payments until appropriate remedial action has been taken
• refusal to accept non-conforming goods in accordance with the contract and applicable law.