Industry
Solutions
Location(s)
United States & Europe
Helping Bridgestone build a sustainable supply chain through an innovative approach to financing
As one of the world’s largest tire manufacturers, Bridgestone recognizes its responsibility to build a sustainable supply chain that works for all, particularly when it comes to advancing science, techniques, and the local environment at natural rubber’s point of origin around the world.
MM
Millions of businesses
on the network
$250bn
Over $250 billion in
accelerated early payments
172
We operate in 172 countries
across the globe
“Our award-winning Sustainable Supply Chain Financing initiative is a tangible demonstration of how the Finance function can play its part in driving sustainability. We are grateful to the Taulia financial technology solution that helps make this possible.”
Julle Pedersen, Treasury Director for Bridgestone Europe, Middle East, India, Africa (EMIA)
Overview
As one of the world’s largest tire manufacturers, Bridgestone recognizes its responsibility to build a sustainable supply chain that works for all, particularly when it comes to advancing science, techniques, and the local environment at natural rubber’s point of origin around the world.
At a time when ESG (Environment Social Governance) criteria have become as strategically important as financial metrics to the majority of businesses around the world, Bridgestone wanted to find a way to embed these priorities into all its activities and those of its suppliers – and to ensure that it was done in a way that would promote accuracy, transparency, and accountability.
The company has an ambitious ESG agenda and required a supply chain finance solution that would incentivize its partner companies to prioritize sustainability by offering preferential discounts to suppliers with high ESG ratings, as attested by third-party sustainability ratings provider, EcoVadis.
This would allow Bridgestone to demonstrate to internal and external stakeholders its commitment to creating a more sustainable society for future generations to inherit – the definition of responsible stakeholder capitalism.
Main objectives
- Build a supply chain finance program with sustainability at its core
- Optimize and streamline cash flow and working capital management through digitization
- Prioritize ESG via accurate measurement and assessment of impacts and progress
- Increase transparency with suppliers with greater visibility and communication in invoice pipeline
- Enhance and embody Bridgestone’s commitment to social and environmental responsibility
The Challenge
Bridgestone’s sustainability ambitions center around achieving full carbon neutrality across the value chain and throughout the product life cycle and working with 100% sustainable materials by 2050.
As part of its sustainability journey, it recognizes the need to have better visibility of its entire supply chain and to find ways to incentivize its suppliers to adopt and maintain their own sustainability programs.
At the same time, Bridgestone needed to find an ideal balance between the often conflicting factors of becoming more sustainable versus financial pressures such as longer payment terms and lower prices.
Discovery
Taulia worked alongside Bridgestone, EcoVadis, and JP Morgan to develop a solution that harnessed our market-leading technology platform and software to facilitate an innovative supply chain financing initiative with sustainability at its heart.
The result is the Bridgestone Sustainable Supply Chain Financing (SSCF) program which, thanks to our advanced financial technology capabilities, can scale across the entire supply chain and onboard suppliers of all sizes onto the platform quickly and easily.
The initiative launched in 2020, with the first supplier in Europe onboarded by the end of December 2020.
Over the course of 2021 and 2022, the Bridgestone team rolled out the initiative across its supply chain in Europe and to key emerging markets, including India and South Africa. A dynamic discounting functionality also went live in 2022. Separately, the program has expanded into Bridgestone North America, where the dynamic discounting functionality is also enabled.
The platform powered by Taulia allows companies like Bridgestone to adopt a layered approach to ESG rating data and to incorporate a variety of sources, including, in this case, EcoVadis data. In this way, Bridgestone could remove subjectivity from sustainability ratings calculations and shift to a proven and reliable third-party rating methodology.
Impact
The flexibility and simplicity of the Bridgestone Sustainable Supply Chain Finance program allows socially responsible supplier partners to access preferential financial terms based on their ESG ratings.
At the same time, the tiered pricing methodology means Bridgestone can incentivize its suppliers to continue to make progress with long-term sustainability strategies and commitments.
The overall success and innovative approach of the Bridgestone initiative was recognized when it won ‘Best Supply Chain Finance Solution’ at the 2021 Adam Smith Awards.
