Increasing Sustainability Performance with Supply Chain Finance

This article published by the TUM School of Management outlines various examples of how financial instruments can help to enhance sustainability within your supply chain.

For example, the authors discuss how one can incentivise suppliers to become more sustainable using financial instruments. The questions discussed are:

What concrete options are there for purchasing in terms of sustainable procurement?

Is supply chain financing via reverse factoring based on the principle “Those who produce more sustainably are paid sooner and at more attractive rates (by a financial service provider commissioned by the purchasing company)” a suitable instrument for improving the ecological and social performance of suppliers?

Do suppliers respond to such incentivization?

Do they invest money in the right places?

This article is a concise summary of the last Supply Chain Finance Hub in May. The next event will take place from 26 – 28 October 2021. If you are interested in more details, you might be able to register. You can find more details at the end of the article.

Additionally, this article published by the SustainAbility Institute dives deeper into the Sustainable Supply Chain Finance topic and offers an interesting case study of how PUMA profited from implementing it.

(Picture by Visual Stories || Micheile, Unplash)

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