The Royal Bank of Scotland (RBS) has recently concluded a nine-month exercise in which it sought to simplify its standard supply contract. The bank has apparently managed to reduce its standard terms from 18,000 words to circa 6,000 words by redrafting complex, legalistic terms in plain English. This is a smart move for several reasons. First and foremost, it makes the contract easier to understand and more accessible to those without a legal background. Not only is this likely to speed up the contract negotiation process and (presumably) make RBS’ supply chain more efficient, but the lack of ambiguity over the wording of the contract is likely to reduce the risk of disputes.

It's been reported that in addition to making its standard supply contract more accessible, RBS:

• Simplified notice requirements around termination, to make them fairer and more balanced
• included new obligations requiring employees of service providers to be paid the living wage, and
• changed the environmental, social and governance (ESG) wording to take a proactive approach with suppliers.

Further, by including proactive ESG clauses in contracts, accountability is created. An accountable supply chain manages the environmental, social and economic impacts, encouraging good governance practices throughout the life cycle of the goods and services. A good starting point for those looking to include proactive ESG clauses in their supply chain contracts is the Chancery Lane Project website (available here). To date, the Chancery Lane Project has published a total of 100 supply chain climate clauses to help organisations achieve net zero emissions in their value chains. Stevens & Bolton can advise on which clauses would be most appropriate in the context of the relevant agreement.