Is your company exploring ways to encourage suppliers to adopt more sustainable practices?

Integrating ESG criteria into Supply Chain Finance (SCF) is proving to be a powerful strategy. By linking financial incentives to ESG performance, businesses can motivate suppliers to enhance their sustainability efforts.

According to The International Centre for Trade Transparency and Monitoring, the global Sustainable Supply Chain Finance market is expected to grow from approximately USD 7.0 billion in 2024 to USD 7.7 billion by 2034.

The increasing demand for environmentally and socially responsible practices across industries has made SCF a vital component of modern logistics and procurement strategies.

Below are a few real-world examples of companies using SCF as a strategic tool to enhance sustainability across their supply chains:

1. Asda & HSBC UK - Launched a sustainability-linked SCF program offering over 250 suppliers access to enhanced financing rates based on ESG performance - https://lnkd.in/dhTi4KDe

2. BASF & Deutsche Bank - Introduced a sustainability-linked payables finance program in Asia - https://lnkd.in/dZPZVrxb

3. REWE Group & Taulia - Implemented an early payment solution integrated with sustainability incentives, offering preferential rates to suppliers with higher ESG ratings - https://lnkd.in/dSTt8ctw

The alignment of SCF with ESG objectives not only supports suppliers in adopting sustainable practices but also enables companies to build more resilient and responsible supply chains.