The supply chain plays a major role in determining the ESG rating of a corporate, as more than 80% of greenhouse-gas emissions is attributable to the supply chain – the Scope3 emissions.
Supply Chain Finance can play a key role in supporting a company’s sustainability ratings. The buyer and the bank would work along with the ESG Ratings provider to score, verify and track suppliers’ ESG performance. In a sustainability linked SCF program (SSCF) the discount margin reduces with an improved ESG score of the supplier, providing a financial incentive to suppliers to improve their sustainable behaviour.
Deutsche Bank’s Anil Walia will present a case study on how an existing SCF program of a European MNC was converted to a SSCF program recently. He will touch upon the internal decision drivers at the company, explain the guidelines that an SSCF would need to follow; and discuss the various aspects that need to be considered when setting up a new SSCF program.
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