8 min read
9 May 2022
8 min read
9 May 2022
Up to 90% of a company’s environmental footprint lies in its supply chain – meaning that the supply chain represents a major opportunity for companies to further their environmental, social and governance (ESG) objectives. So far, so good – but how can you incentivize suppliers to adopt more ethical or sustainable practices?
Taulia’s new Sustainable Supplier Finance solution makes it easy for companies to do just that. With our solution, you can easily track your suppliers’ ESG performance and incentivize suppliers to improve their ESG performance by offering financial incentives.
If you are already intrigued by this possibility, then get in touch here. Otherwise, let’s take a closer look at this exciting new solution and how it works.
In a nutshell, Taulia’s Sustainable Supplier Finance solution helps businesses identify, monitor, and track their suppliers’ ESG performance across the entire supply chain. It also creates financial incentives that encourage suppliers to improve their ESG performance.
Companies can make their publicly stated ESG visions a reality by using Sustainable Supplier Finance to define, set, roll out and scale their ESG programs to the entire supplier base. Using the solution, you can:
Taulia’s Sustainable Supplier Finance solution is powered by an organization’s ESG vision. Taulia works step-by-step with businesses to create measurable objectives around their ESG goals and scale them to the entire supply chain. What’s more, the solution is built for multiple data sources, including ESG provider ratings from partners like EcoVadis, supplier attestation and any data the company provides. This means you can get a comprehensive view of your suppliers’ progress and compare this to your specific goals.
Suppliers can access a low financing rate with their ESG qualifications, providing an incentive for suppliers not only to participate, but also to make operational enhancements that improve their ESG standing. By moving the needle on your ESG agenda as you engage with the entire supply chain, Sustainable Supplier Finance helps you avoid ‘greenwashing’ claims from potential detractors.
You may have a public-facing ESG vision and targets, but do you have a plan for realizing that vision and achieving your goals? Are you keeping up with pressure to demonstrate progress on ESG to the board? Are you confident that you’re able to pinpoint supplier risk within your supplier base – and equally, that you’re able to identify and support minority- or women-owned businesses?
While the apparent complexity of rolling out an ESG program to suppliers can seem daunting, help is at hand. With Sustainable Supplier Finance, you can put in place a reward structure for your supply chain, based on your specific ESG objectives. You can track and report cumulative progress towards ESG objectives to the board – and you can also offer suppliers an economic ‘carrot’ for participating in the program and achieving their ESG targets. There may also be opportunities to unlock more sources of financing for your suppliers, for example through purpose-driven funds.
The result: you can source more responsibly, build a more sustainable supply chain, and create meaningful social change – all while boosting your brand equity and improving your reputation among stakeholders and current and prospective employees.
It’s easy to use Sustainable Supplier Finance. To get started, you need to choose your ESG data source and decide which discount tiers you want to use for early payments. You can then invite your suppliers to enroll in the program and start accepting ESG discounted rates.
You can incorporate diverse data sets – including company scorecards and supplier attestations – with the supplier scores from any ESG ratings provider, tapping into a comprehensive dashboard that maps to your company’s unique goals and objectives.
Our Sustainable Supply Chain Finance solution is built on the back of our industry-leading supply chain finance (SCF) and dynamic discounting (DD) programs, which typically capture 88% of qualified supplier spend. We get deeper into the supply chain than any other provider, which allows you to disburse funds more equitably – a key feature of a truly inclusive ESG solution.
As Taulia’s CEO Cedric Bru commented: “We’ve always believed in creating a world where all businesses can thrive by liberating cash trapped in their supply chains. Now, we can take one step further and help our customers activate their ESG initiatives on a truly global scale.”
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