Context: The increasing concerns about climate change once again point to the need for enhanced efforts towards achieving sustainable growth goals in India. 

Need for sustainable growth

• As both consumers and corporations reap the benefits of large-scale manufacturing and services.
• They must equally share the responsibilities relating to the loss of resources and reduce greenhouse gas emissions. 
• They can contribute to cutting down emissions through the process of green contracting.

Green contracts

• ‘Green contracts’ are commercial contracts which mandate that contracting parties cut down greenhouse gas emissions at different stages of delivery of goods/services, including design, manufacturing, transportation, operations and waste disposal, as applicable to the industry. 
• A ‘green tender’ defines necessary ‘green qualifications’, which can be considered when awarding the contract to a bidder. 

These green qualifications can range from 

• using a pre-defined percentage of ‘green energy’ in service delivery to adequate on-site waste management, 
• reducing carbon emissions by a certain level over period of time, etc. 

The ‘green obligations’ : It is this obligatory nature of green contracts which sets the tone for the parties to cut down emissions. This can be achieved by contractual clauses providing for the

• use of good quality and energy-efficient infrastructure for production of goods/services, 
• efforts in day-to-day operations such as reducing noise, air and water pollution and 
• ensuring eco-friendly means of transportation like bicycles on site, 
• establishing and maintaining a sustainable waste management system, and so on.

Road Ahead

• The govt. should provide for measurement criteria and audit of the performance of the contractor with regard to these obligations.
• An organisation may also choose to contractually highlight non-performance of such obligations as a ground of contractual breach, with penalty prescriptions. 
• The service recipients can also themselves undertake thorough assessments on their current standing on greenhouse gas emissions, and initiate relevant processes to contribute their share in India’s green sustainable future.
• The economic cost of executing green contracts may be greater than a normal brown contract, but global entities operating in a changing environment need to take into consideration the greater environment costs at stake.