What types of contracts does AMLEGALS handle?

AMLEGALS provides comprehensive contract advisory across 43+ contract types including Technology contracts (SaaS, AI/ML, Cloud Services), Data Privacy agreements (DPAs, DPDPA compliance), Commercial contracts (MSAs, Supply, Distribution), IP & Licensing, Employment agreements, and International Trade contracts.

What is the TCL Framework for contracts?

The TCL Framework is AMLEGALS proprietary approach that examines every contract through three lenses: Technical (understanding the operational realities), Commercial (aligning business objectives), and Legal (ensuring compliance and risk mitigation). This integrated approach ensures contracts that work in practice, not just on paper.

Does AMLEGALS handle DPDPA-compliant contracts?

Yes, AMLEGALS specializes in DPDPA-compliant contracts including Data Processing Agreements, Cross-Border Transfer Mechanisms, Data Sharing Agreements, and Consent Management frameworks. Our Vibe Data Privacy™ framework ensures comprehensive compliance with the Digital Personal Data Protection Act, 2023.

Can AMLEGALS help with AI and technology contracts?

Yes, AMLEGALS has dedicated expertise in AI/ML Contracts, AI Governance agreements, AI Training Data Licensing, SaaS Agreements, Cloud Services agreements, and System Integration contracts. We address emerging issues like algorithmic accountability, model ownership, and AI liability allocation.

What ESG standards should contracts reference?

Contracts should reference specific, measurable standards appropriate to the sector and relationship. Common references include: SEBI BRSR metrics for listed company reporting, GRI Standards for sustainability disclosure, Science Based Targets initiative for emissions, SA8000 or ILO conventions for labor standards, and sector-specific standards where applicable. Avoid vague references to "best practices" or "industry standards" that create interpretation disputes.

How should contracts address Scope 3 emissions?

Scope 3 emissions—indirect emissions in a company's value chain—require supply chain cooperation. Contracts should: require suppliers to measure and report emissions using specified methodologies (GHG Protocol), establish baseline and reduction targets with timelines, include data sharing obligations and verification rights, address allocation methodologies when suppliers serve multiple buyers, and contemplate how emerging regulations may affect requirements.

What audit rights are appropriate for ESG compliance?

Effective ESG audit provisions include: self-certification and attestation for routine compliance, third-party audit rights (potentially at buyer cost) for detailed verification, site inspection rights with reasonable notice except for suspected serious violations, access to relevant records and personnel, right to audit sub-tier suppliers (either directly or through certification requirements), and confidentiality protections balanced against transparency obligations.

How should contracts handle ESG non-compliance?

Graduated response frameworks work best: notification obligations for any non-compliance, remediation requirements with specific timelines, support obligations (potentially including cost-sharing) for capability building, suspension rights for serious or repeated failures, termination rights for fundamental or unremediable breaches. Immediate termination for any ESG breach is often counterproductive—it may simply shift problems to less responsible suppliers.

ESG Contractual Obligations | Ethical Supply Chain Agreements | Sustainability Contracts

Overview

Environmental, Social, and Governance (ESG) considerations have transitioned from voluntary corporate commitments to binding contractual obligations. Driven by regulatory mandates like SEBI's BRSR requirements, customer demands, financing conditions, and reputational imperatives, businesses must now operationalize their ESG commitments through their commercial relationships. This transformation requires rethinking how contracts address environmental performance, social responsibility, and governance practices.

Ethical supply chain agreements represent the practical implementation of ESG principles. Supply chains are where most environmental impact occurs and where social risks—labor conditions, human rights, community impacts—are most acute. Buyers increasingly face legal obligations to conduct supply chain due diligence and liability for supplier practices. Contracts must therefore extend ESG obligations through supply chains, establish verification mechanisms, and allocate responsibility for compliance failures.

The challenge lies in making ESG contractual obligations enforceable and effective rather than aspirational. This requires specific, measurable commitments rather than vague principles, robust verification and audit mechanisms, meaningful consequences for non-compliance, and adaptation provisions as standards evolve. The goal is moving ESG from corporate communications to operational reality.

Key Considerations

ESG Standards Definition

Identifying applicable ESG standards—SEBI BRSR, GRI, SASB, UN Global Compact—and translating them into specific contractual obligations.

Scope 3 Emissions Obligations

Addressing supplier contribution to buyer's Scope 3 greenhouse gas emissions, including measurement, reporting, and reduction commitments.

Social Compliance Requirements

Establishing labor standards, working conditions, fair wages, and human rights requirements throughout the supply chain.

Verification and Audit Rights

Creating mechanisms for monitoring ESG compliance including self-certification, third-party audits, and site inspections.

Remediation Frameworks

Establishing procedures for addressing discovered non-compliance, including correction timelines and escalation procedures.

Governance Transparency

Requiring disclosure of governance practices, beneficial ownership, anti-corruption compliance, and ethical business conduct.

Applying the TCL Framework

Technical

Understanding the environmental footprint of supplied goods and services
Assessing supplier capability to measure and report ESG metrics
Evaluating traceability systems for supply chain transparency
Reviewing certification and audit methodologies for reliability
Understanding Scope 3 emission calculation methodologies

Commercial

Pricing the cost of ESG compliance into supply arrangements
Structuring incentives for ESG performance improvement
Allocating risk of ESG failures between parties
Building long-term relationships that enable ESG investment
Addressing transition costs as ESG standards evolve

Legal

Drafting ESG obligations that are specific and enforceable
Structuring representations and warranties regarding ESG compliance
Including termination and suspension rights for serious ESG failures
Addressing confidentiality of ESG audit findings
Incorporating evolving ESG standards through reference or update mechanisms

“

"ESG has moved from corporate communications to contract law. The challenge now is making ESG commitments legally meaningful—specific enough to be enforced, practical enough to be performed, and adaptive enough to evolve with changing expectations. Aspirational language is no longer sufficient."

Anandaday Misshra

Founder & Managing Partner

Common Pitfalls

Aspirational Language

Using vague commitments to "support sustainability" or "respect human rights" without specific, measurable, enforceable obligations.

Verification Gaps

Imposing ESG obligations without establishing meaningful mechanisms for monitoring and verifying compliance.

Downstream Blindness

Focusing on direct suppliers without addressing requirements for cascading ESG obligations through sub-tiers.

Static Standards

Locking in current ESG standards without mechanisms for adapting as expectations and regulations evolve.

Remediation Ambiguity

Lacking clear procedures for addressing non-compliance, leading to uncertainty and disputes when issues are discovered.

ESG Regulatory Framework

SEBI's Business Responsibility and Sustainability Report (BRSR) requirements apply to top listed companies, requiring disclosure of ESG performance. The BRSR Core framework mandates limited assurance for specified metrics. Companies Act provisions address CSR spending and director responsibilities. Environmental regulations impose specific compliance obligations that translate into supply chain requirements. Internationally, the EU Corporate Sustainability Due Diligence Directive will require supply chain due diligence by companies meeting size thresholds, with extraterritorial application affecting Indian suppliers. These regulations create compliance obligations that must be implemented through contractual mechanisms.

Practical Guidance

Define ESG standards specifically by reference to recognized frameworks rather than vague principles.
Establish baseline measurements and clear improvement trajectories with timelines.
Include audit rights that enable meaningful verification, not just paper compliance.
Cascade ESG obligations through supply chain tiers with appropriate mechanisms.
Build in standards evolution—ESG expectations will only increase.
Structure consequences proportionate to the ESG failure—not every breach warrants termination.

Frequently Asked Questions

Related Practice Areas

Corporate Environmental Law Regulatory Compliance

Need Assistance with ESG Contracts?

Our team brings deep expertise in sustainable procurement matters.

Contact Our Team