Enforcing Sustainability Clauses in Global Supply Chains with a Focus on Proactive and Relational Contract Theory: Case of SDG 12

Abstract

Globalisation allows corporate organisations to rise above the national and regional regulatory constraints through global value chains. This is especially due to the fact that national boundaries do not limit the flow of investment capital, labour, goods, or the environmental consequences of such activities. In parallel, the evolution of sustainable development has brought with it social, environmental, and economic activities for the benefit of future generations. The 2030 Agenda reflects the notion of sustainable development with 17 individual goals and 169 targets. While many welcomed such development, enforceability of sustainable development goals (SDGs) remains a challenge, primarily as voluntarism is central to the system of SDGs. In theory, consumers and end-user companies opt for sustainably produced goods to contribute towards sustainable development in their own countries and other countries in global value chains. In the absence of a national or international binding regulatory framework, contract emerged as the most effective solution for enforcing the SDGs in global value chains. This article explores the current challenges in the enforceability of sustainability clauses in global value chains through the lens of sustainable consumption and production patterns and SDG 12. It contributes to the ongoing academic debates and practical considerations through the lens of proactive law theory.