Deutsche Bank has unveiled BASF’s inaugural sustainability-linked payables finance programme in Asia, concentrating on its operations in China.
This programme is designed to align with global standards while being customised to meet the specific business needs of the local market.
The initiative will bolster BASF’s business activities in China by transforming its existing payables finance programme into a sustainability-linked financing arrangement for some of its subsidiaries in the region. This transformation allows BASF to motivate its suppliers towards sustainable practices through financial incentives.
Supplier sustainability performance is assessed by EcoVadis, a renowned global supplier sustainability ratings provider. Suppliers who achieve high ratings under this programme are rewarded with lower interest rates, spurring them to enhance their sustainability measures. Suppliers not yet rated are encouraged to earn a rating, promoting a shift towards more sustainable operations. The programme aims to boost the effectiveness of BASF’s payables finance programme by fostering shared values and mutual objectives.
Ole Matthiessen, head of corporate bank for Asia Pacific, Middle East and Africa and global head of cash management at Deutsche Bank, expressed enthusiasm about the collaboration: “We are delighted to partner with BASF on its first sustainability-linked payables finance program in Asia. We are strongly committed to our sustainability strategy and helping our clients find innovative new solutions that not only improve resilience of their supply chains, but also advance their sustainability footprint to future proof their operations. We look forward to continuing to help BASF with its sustainable growth ambitions globally.”
Birka Benecke, senior vice president corporate treasury at BASF, also highlighted the benefits of the programme: “With this program, we can deepen our collaboration with our suppliers and strengthen the partnership in the area of sustainability transformation. This also gives us the opportunity to further optimise our supply chains.”
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