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ESG timeline: The evolution of global sustainability regulation in procurement and supply chain

07/27/2021 By

Within the last year, procurement has truly become a catalyst of change for sustainability issues at the business level. But with sourcing and other procurement-related processes being integrated in nearly all parts of the global economy, it can be confusing to know what is right and wrong, especially from a legal perspective. That’s where countries can help with different laws, regulations and guidelines that promote sustainable sourcing practices.

Supply chains account for 80% of carbon emissions. But at the same time, procurement and supply chains become more vulnerable as environmental issues arise. It’s a double-edged sword. Meanwhile, every country holds different laws, but increasingly, sustainability law is becoming international law. Countries are increasingly banding together to fight for sustainability in business and beyond.

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The United Nations, for example, has the United Nations Environment Programme (UNEP) which works to strengthen environmental standards and practices at the country, regional and global level. The Paris Agreement is a legally binding international treaty for climate change that 196 parties adopted in 2015. It entered into force in 2016.

The UN said in its 2019 environment report that 176 countries have some sort of environmental framework law, 150 have elevated environmental protection and healthy living conditions into their constitutions, and 164 have created cabinet-level bodies responsible for environment protection.

But at the same time, there are alarming levels of deforestation, loss of biodiversity and rising global temperatures. The UN report found that although there has been a growing trend in the last four decades of countries adding environmental laws and agencies, weak enforcement of these laws is the biggest hurdle toward a more sustainable world.

“This compelling report solves the mystery of why problems such as pollution, declining biodiversity and climate change persist despite the proliferation of environmental laws in recent decades,” David Boyd, UN Special Rapporteur on Human Rights and the Environment, said in a press release. “Unless the environmental rule of law is strengthened, even seemingly rigorous rules are destined to fail and the fundamental human right to a healthy environment will go unfulfilled.”

And this is just environmental law. More countries are adding laws, regulations and provisions protecting workers from forced labor and other types of slavery as well.

Within widespread sustainability regulation, countries have deliberately targeted supply chains and procurement. Regulations specifically targeting these practices have increased in the last three or four decades.

It can be confusing, though. To sort through the weeds of regulation, Spend Matters created this timeline of some of the key sustainability regulations regarding procurement and supply chain. This is not an exhaustive list, but it includes some of the most major decisions in recent years.

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ESG (Environmental, Social and Governance)