Last reviewed 4 May 2021
Tesco is the first UK retailer to offer supply chain finance (SCF) to encourage suppliers to reduce greenhouse gas emissions and improve environmental performance.
Under the scheme, suppliers will be offered preferential financing rates through Santander’s supply chain finance platform, to support efforts to reduce carbon emissions across business activities while tracking environmental performance improvements.
Tesco’s Chief Product Officer, Ashwin Prasad, 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.”
Tesco was one of the first companies to set science-based climate targets for its own operations on the 1.5°C trajectory set out in the Paris Climate Agreement and the first retailer to commit to net zero climate target in the UK by 2035.
Commenting on the new initiative, Dave Knibbs, Director at The Tofoo Company, said the supply chain programme aligns with his own company’s values: “The supply chain finance programme offers a great incentive for us and similar suppliers to make a noticeable difference when it comes to sustainability.”
The scheme will be available to companies across Tesco’s supply chain and is expected to benefit the company’s many small and medium-sized suppliers. The rates will be based on each suppliers’ carbon data disclosure, emissions reduction targets and progress against sustainability goals.
The scheme will be supported through Tesco’s Supplier Network from September this year. Those signing up will be provided with online tools and support to help deliver on carbon-reduction goals and sustainability.