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PUMA Launches Financing Program to Reward Suppliers for Sustainability Performance
September 8, 2016
PUMA Launches Financing Program to Reward Suppliers for Sustainability Performance
September 8, 2016
by Sustainable Brands
Sports company PUMA is offering its suppliers in select emerging markets with a new financing program in partnership with the International Finance Corporation (IFC), a member of the World Bank Group. The program is expected to incentivize improvements to suppliers’ social, environmental and health and safety standards, and is a first-of-its-kind financing structure for the apparel industry.
IFC has adopted a financing structure with tiered pricing of short-term working capital, offering lower costs for those suppliers that achieve a high score in PUMA’s supplier rating, which is applied after PUMA has monitored the supplier’s adherence to the company’s social and environmental standards through an auditing process. At the same time, suppliers are able to benefit from PUMA’s strong reputation and financial position to secure affordable financing.
“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. Thus our supplier’s investments in sustainability are rewarded, which is an additional incentive for them to improve their environmental and social standards,” said Lars Sørensen, PUMA’s Chief Operating Officer.
The new financing structure was recently launched with the support of European bank BNP Paribas and IT platform provider GT Nexus. The first phase of the program is being rolled out in Bangladesh, Cambodia, China, Indonesia, Pakistan, and Vietnam, but the partnership with BNP Paribas is expected to help the program expand.
Read more at Sustainable Brands.
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