On Wednesday, Taulia, a capital management solutions provider, announced it was able to integrate sustainability criteria into the supply chain finance program for Henkel, a German adhesives company.
The Supply Chain Finance program, managed by the two companies since 2015, will now provide flexible financing options to Henkel’s suppliers, with preferential rates going to suppliers based on ESG ratings. By improving their ESG ratings, suppliers can further reduce financing costs. The program underscores Henkel’s target of reducing CO2 emissions by 100 million tons between 2016 and 2024.
“Henkel considers itself a pioneer in the field of sustainability which is an essential part of our strategic agenda for purposeful growth,” said Marco Swoboda, Henkel’s CFO. “Sustainability has become a key criterion of successful supply chains nowadays. Turning our Supply Chain Finance program with Taulia sustainable marks another step in this direction.”
Taulia’s tech solution will support the program to allow it to scale up. The multi-funder model through Taulia will enable businesses to access an ecosystem of financial institutions, Taulia said, including UniCredit and ING, which provides them with flexibility and risk mitigation. Additionally, integrating ESG ratings will allow more companies to realize their ESG goals while maintaining supply chain welfare.
“This project marks an important milestone in establishing transparency around sustainability in supply chains,” said Cedric Bru, Taulia’s CEO. “Together with Henkel, Taulia will deliver a program that makes liquidity available to eligible suppliers in the supply chain and incentivize suppliers to minimize the impact they have on the environment.”