Contracting
Ensuring suppliers are contractually obliged to achieve our ESG expectations is a key tool to help us achieve our ESG goals. The following model contract
clause should be used in all procurements, however, it can be adapted and updated to reflect the unique ESG considerations of a particular industry,
procurement, or supplier. However, guidance should be sought from the ESG Procurement Team and relevant legal support.
Contract ESG clause
Procurement managers must ensure that the following clause is included in all new supplier contracts:
Environment, Social, and Governance (ESG). The Service Provider shall make reasonable efforts to minimize negative and maximize positive ESG impacts
created in the delivery of goods and/or services to CBRE and foresee any known or expected future changes in ESG regulations or requirements.
Service Provider shall adopt an ESG policy, with supporting procedures, to ensure that it adheres with ESG requirements and best practice. Each year,
Service Provider will provide CBRE a report outlining how the Service provider:
1. Is managing important ESG matters
2. Is identifying what further action (if any) should be taken
3. Has improved in its implementation of the ESG Policy so far
4. Will improve its performance further and propose at least two new options for improvements to CBRE and our Clients
CBRE may occasionally request other information regarding developments in ESG best practice, requirements, policies, or procedures, which the Service
Provider must promptly comply with. If any breach of ESG policy or requirements has occurred; Service Provider shall proactively and promptly inform
CBRE.
In addition to the foregoing, and as may be amended by a set of KPI’s agreed upon by the Parties, the Service Provider further commits to the following ESG
obligations:
a. Environment
- With regards to carbon emissions, Supplier must provide the following data every 6 months:
a. Scope 1: Direct emissions from Supplier owned or controlled sources (e.g., emissions that are emitted on-site or by vehicles owned or controlled).
b. Scope 2: Indirect emissions from the generation of purchased energy (e.g., energy).
c. Scope 3: All other indirect emissions not included in Scope 1 and 2 that occur in the value chain of the Supplier, including both upstream and
downstream emissions. (e.g., all emissions generated suppliers, middle-men, and consumers of a product or service that aren’t accounted for in the first two
scopes)
2. With regard to the foregoing Scope, Supplier commits achieve the following outcomes (“Expected Outcome”):
a. Reduce annual energy consumption by __ %, waste by ___ % and water by ___ %;
b. Provide reliable quarterly reporting of energy consumption; and
c. Propose quarterly sustainability initiatives.
b. Social
1. Service Provider shall, to the extent it is not a diverse company being at least a 51%-owned, managed, and controlled by an underrepresented group
(“Diverse Supplier”), adopt a Supplier Diversity Program, including the ability to identify the Service Provider’s Diverse Suppliers, monitor spend, develop
existing Diverse Suppliers, and add new Diverse Suppliers. Service Provider should set annual targets to achieve 20% Diverse Supplier spend
2. Supplier shall participate in CBRE’s Tier 2 Diverse Supplier Program, including:
a. provide CBRE with a 2nd Tier Supplier Diversity Participation Plan by December 1 of each year, outlining Service Provider’s success and challenges over
the previous year and plans to achieve 20% diverse spend in the coming year
b. Submit quarterly Diversity Results Reports, outlining the spend with all Diverse Suppliers both direct and indirect by the 15-day following the close of
each quarter, electronically into CBRE’s Tier 2 reporting portal, or via another mutually agreed format.
c. Governance
1. Service Provider will adhere to CBRE’s Supplier Code of Conduct and manage Service Providers supply chain in accordance with its requirements. Service
Provider must understand the inherent governance risks in providing their products and or services to CBRE and CBRE Clients and work with CBRE and
CBRE’s recommended service providers to offset the inherent risks such as compliance, health and safety, cyber security, modern slavery and so on.
2 Service Provider must register, if not already registered, in CBRE’s ESG compliance tools, including Supplier Shield (CBRE’s global due diligence platform)
and EcoVadis (CBRE’s third party sustainability performance management tool), with costs to be borne by Service Provider but not more than US$3,000 per
annum.