Puma has set up new incentives for suppliers to abide by its Sustainability Handbooks and Code of Conduct. The German sportswear company, which has been auditing the social and environmental footprint of its manufacturing partners for many years, claims to have been the first to offer them better financing terms based on the sustainability rating that they have achieved. Under this scheme, introduced in 2016 and called the “Forever Better Vendor Financing Program,” the suppliers can “sell” their Puma invoices to a lender that will render them payment for goods or services within five days of delivery at favorable terms based on the sustainability of their practices.
The lenders participating in this program include HSBC, BNP Paribas, Standard Chartered and the International Finance Corporation (IFC). According to Puma, the program has the benefit of not affecting the suppliers’ other bank and credit lines. The program was named as the “Best Supply Chain Solution” at the Asset Triple A Treasury, Trade, SSC and Risk Management Awards.
The amount of financing drawn through the program grew from $100 million in 2016 to $200 million in 2019 and $580 million in 2020. For the first six months of 2021, the related financing amounted to $322 million.
As a further incentive, Puma started offering also better terms for product liability insurance earlier this year to vendors that rate an “A” in its own sustainability audits. The brand is working with an insurance company, Chubb, on this new program.
