HSBC and Walmart have joined forces to launch a supply chain finance programme that pegs a supplier’s financing rate to its sustainability performance.
Under the scheme, Walmart suppliers who demonstrate progress in Walmart’s Project Gigaton or Sustainability Index Programme will be able to apply for improved financing from HSBC based on their sustainability ratings.
Project Gigaton is a Walmart initiative to avoid one billion tonnes of greenhouse gases from the global value chain by 2030 through supplier commitments.
Walmart’s Sustainability Index Program gathers and analyses information across a product’s life cycle, and was developed by The Sustainability Consortium.
Natalie Blyth, global head of trade and receivables finance at HSBC, says: “In many industries it is a company’s supply chain – rather than the company itself – that is responsible for most of the environmental impact and therefore offers the greatest potential for sustainability improvements.”
Matthew Allen, vice president finance and assistant treasurer at Walmart, said: “We want to encourage companies throughout the supply chain to focus on sustainability, as we have seen first-hand how this sparks innovation and generates value. Investing in sustainability can not only lead to higher productivity and cost savings for suppliers, but can also drive their business growth as they make a positive contribution to the world.”
According to a recent HSBC Navigator survey, 81 per cent of global companies say ethical and environmental sustainability is important to them and 83 per cent aspire to be a genuinely ethical or environmentally sustainable company. Also, improving sustainability outcomes is among the top three objectives for making supply chain changes.