New financing program promises to incentivise suppliers of the sportswear giant who improve their environmental and social standards
Sportswear giant PUMA has teamed up with banking giant BNP Paribas and IT platform provider to launch an innovative new programme designed to incentivise its suppliers to embrace higher environmental, social, and health and safety standards.
The companies said the new supplier financing scheme aims to provide "financial incentives" to those that demonstrate a strong environmental and social performance.
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Supplier financing schemes typically allow suppliers of large corporates to gain access to more attractive financing packages by benefiting from the buyer's credit standing.
However, the new program developed by PUMA, BNP Paribas, IFC, and GT Nexus also includes a mechanism for encouraging the company's suppliers to enhance their environmental performance.
Specifically, the companies explained that the rate at which the bank discounts suppliers' invoices will depend not only on PUMA's credit standing but also on PUMA's supplier rating, which is applied after PUMA has monitored a supplier's adherence to its social and environmental standards through an auditing process.
"This is the first program in our industry, which takes into consideration a supplier's score in PUMA's environmental and sustainability rating as a bonus or malus on related fees," said Lars Sørensen, PUMA's chief operating officer, in a statement. "Thus our supplier's investments in sustainability are rewarded, which is an additional incentive for them to improve their environmental and social standards."
The program is now set to be offered to over 300 if PUMA's external manufacturing partners worldwide.
"The program launched with PUMA highlights the growing importance of sustainability matters across industries and demonstrates BNP Paribas' ability to implement such innovative financing solutions," said Jacques Levet, head of transaction banking EMEA at BNP Paribas, in a statement. "It is also a testimony of PUMA's strong innovation capacity as a leading-mover in the industry."
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