Walmart partners with HSBC to launch green finance programme for suppliers

As part of a partnership with HSBC, US-based retail giant Walmart has developed a green finance initiative that rewards suppliers for setting, meeting or exceeding ambitious sustainability aims.

Walmart hopes the move will encourage greater disclosure and innovation from suppliers. Pictured: Solar arrays operated by Walmart China

Walmart hopes the move will encourage greater disclosure and innovation from suppliers. Pictured: Solar arrays operated by Walmart China

Called the Sustainable Supply Chain Finance Programme (SSCF) and launched late last week, the scheme will align the sustainability performance of suppliers with their ability to apply for preferential financing packages.

Firms which are able to demonstrate good progress on reducing their emissions under Walmart’s Project Gigaton initiative, which is striving to mitigate one billion metric tonnes of greenhouse gas (GHG) emissions across the supply chain by 2030, will be given access to the more funding sources. Walmart notes that 90% of its total emissions come from the supply chain.

Suppliers taking part in Walmart’s environmental lifecycle analysis scheme for products, called the Sustainability Index Programme, will also be given preferential access to green finance pots.

Walmart’s assistant treasurer and vice president for finance Matthew Allen said the move should incentivise a race to the top in terms of supplier sustainability, “sparking innovation and generating value”.

"Investing in sustainability can not only lead to higher productivity and cost savings for suppliers, but can also drive their business growth as they make a positive contribution to the world," he said.

Walmart has not disclosed specific information on the financial offerings covered by the SSCF but claims they will be an "enticing proposition for suppliers" and lead to greater disclosure of environmental data by these firms.

"Trade is a force for good, and trade finance has a vital role to play if we are to achieve the UN's Sustainable Development Goals (SDGs)," HSBC’s global head of trace and receivables finance Natalie Blyth added.

"Embedding sustainability in global supply chains is not only beneficial for the environment and society, but also for companies' bottom lines."

The launch of the SSCF comes shortly after Walmart hosted its 2019 sustainability milestone summit, announcing strong year-on-year progress on Project Gigaton. Two years into the project, Walmart has reported that 93 million metric tonnes of emissions have been avoided. Walmart Canada has now joined the project, the third international market to work on this goal after the US and China.

Walmart also used the summit to announce that checkouts at its US stores will offer reusable bags made from post-consumer recycled content for the first time from next month. The move builds on a pledge to ensure that all Walmart own-brand packaging is 100% recyclable, reusable or industrially compostable by 2025.

Sarah George



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