Finance is a powerful lever to improve the sustainability of businesses. This finding has led HSBC and US retail giant Walmart to partner to roll-out a finance programme that pegs a supplier’s financing rate to its sustainability standards. Under this scheme, Walmart’s suppliers who demonstrate progress in their sustainability credentials will have access to improved financing from HSBC.
Suppliers’ progress will be measured against Walmart’s Project Gigaton and Walmart Sustainability Index Program, developed by The Sustainability Consortium (TSC)1. Project Gigaton is an initiative Walmart launched to rid one billion metric tons (a gigaton) of greenhouse gases from their global value chain by 2030.
The ecosystem of businesses that operate in any one supply chain are one of the most important levers for businesses to create a positive effect on the world. Typically the businesses in a supply chain account for more than 80% of greenhouse-gas emissions2. So, the role that international banks have to play in supporting companies’ transition to become more sustainable is paramount to business sustainability more generally.
Financial support can take several forms, from traditional green lending to innovative schemes such as programme-based lending that finances the investment needed by key suppliers to put the tools and equipment in place to lessen your impact on the environment. This can range from reducing energy consumption through to water treatment plants. Or supply chain finance programmes where variable pricing is used to incentivise suppliers to meet the sustainability targets set by your buyers, our partnership with Walmart is a great illustration of this.
“Trade is a force for good, and trade finance has a vital role to play if we are to achieve the Sustainable Development Goals”, says Natalie Blyth, Global Head of Trade and Receivables Finance at HSBC. “Embedding sustainability in global supply chains is not only beneficial for the environment and society, but also for companies’ bottom lines. As the world’s leading international bank, HSBC is actively building new partnerships and frameworks to help deliver a more sustainable future for all.”
Being sustainable is seen as very important by businesses around the world. According to the latest HSBC Navigator survey, 81% of global companies say ethical and environmental sustainability is important to them and 83% 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.
As a leading international bank, HSBC has a strong role to play in supporting businesses shift to being more sustainable and we have the tools, network and relationships to support you on your sustainability journey. Nearly one-third of businesses surveyed in our recent HSBC Navigator survey plan to make sustainability-related changes to their supply chains within the next three years – how can we help you?
1 The Sustainability Consortium (TSC) is a global organisation dedicated to improving the sustainability of consumer products.
2 McKinsey & Company, “Starting at the source: Sustainability in supply chains”, November 2016
Stuart Nivison, HSBC's Global Head of Client Network Banking, discusses the important relationship that banks need to have with procurement leaders to drive the transition to sustainability
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