The voluntary program is scheduled to start in September
Tesco launches an initiative where its supply base offers sustainability-linked supply chain finance. The UK supermarket retailer hopes more suppliers will be encouraged to join science-based emissions reduction targets.
The voluntary program is run in partnership with Santander and is directly related to Tesco’s sustainability commitments.
It’s been in development for 18 months and is slated to hit the market in September. As part of the program, annual data on greenhouse gas emissions from suppliers is provided, which has been independently checked and assessed by sustainability experts Anthesis.
Tesco suppliers are offered preferential financing rates through Santander’s market-leading supply chain financing platform, which incentivizes suppliers to make positive changes to their business, track performance and create a culture of continuous improvement. The rates are based on the disclosure of each supplier’s carbon data, the emission reduction targets and the progress towards the sustainability targets.
Tesco will regularly update the scope of sustainability data requirements in line with market best practices and its own sustainability commitments. The retailer expects the program to be of particular interest to small and medium-sized businesses. Tesco will provide online tools and support to assist these suppliers in registering for the program.
Ashwin Prasad, Tesco’s Chief Product Officer, said, “In this critical year for climate action, we are excited to provide thousands of suppliers with access to market-leading supply chain finance related to sustainability. This program provides suppliers with more than just a real incentive, science-based Setting emission reduction targets, but it will also help embed sustainability goals across our supply chain and help the UK achieve its climate targets. “
Darren Jones, Head of Santander Corporate and Investment Bank UK, added: “Action against climate change is vital. From individuals to businesses, we all play a role. Supply chain funding can be a powerful tool to bring about positive change influencing the link between sustainability performance Santander recently announced its ambition to achieve net carbon free emissions across the group by 2050 and we are committed to helping our customers transition to a low carbon economy. “