Tesco is set to become the first UK retailer to offer sustainability-linked supply chain finance in a move that will aim to encourage more suppliers to sign up to science-based emissions reduction targets.
The voluntary programme has been in development for the past 18 months and is due to launch in September.
It will see annual greenhouse gas emissions data provided by suppliers independently verified and assessed by sustainability experts, Anthesis. KPMG are engaged to carry out assurance of the programme.
Tesco suppliers will also be offered preferential financing rates via Santander’s market leading supply chain finance platform which incentivises suppliers to make positive changes to their business.
The rates will be based on each suppliers’ carbon data disclosure, emissions reduction targets and progress against sustainability goals.
Ashwin Prasad, chief product officer, said: “In this critical year for climate action, we’re delighted to be able to offer thousands of suppliers access to market-leading supply chain finance linked to sustainability.
“This programme not only provides suppliers with a real incentive to set science-based emissions reduction targets, it will help embed sustainability goals throughout our supply chain and support the UK in realising its climate change targets.”