Your customers are under increasing pressure from their investors, governments and their own customers to tackle the climate crisis.
The companies you sell to may have made their own climate commitment, likely including their supply chain, meaning that your climate footprint is relevant to them. Accordingly, many companies have been integrating sustainability requirements into supplier contracts and audits. Strong buyer–supplier collaboration and innovation is required to scale sustainable business practices to together reach climate goals by 2030.
This may translate into financial support and training for your business, such as preferential contract terms if you too are taking action to reduce your emissions. One example is climate-linked supply chain finance
What is supply chain finance and how can it help support your net zero journey?
Supply chain finance is a mechanism whereby a company, often working with banks, offers their suppliers the option of a loan using invoices as collateral. Supply chain finance is often at a lower interest rate than suppliers could get directly from their bank, therefore enabling you, as the supplier, to access more affordable finance while waiting for the buyer to finalise payment.
Sustainable supply chain finance takes regular supply chain finance and integrates considerations such as the carbon footprint of the supplier. Based on the carbon footprint of the supplier, further interest rate discounts could be provided.
Training and advisory support
Even if your buyer does not offer direct access to supply chain financing, they might be able to help support in other ways – like calculating your greenhouse gas footprint – which can save costs you may have otherwise incurred.
Microsoft is helping their suppliers with GHG measurement, training, renewable energy transitions and advisory.