HSBC Bank USA and apparel giant, PVH Corp have announced the first sustainable supply chain finance programme that is based on suppliers’ sustainability ratings and related to both environmental and social objectives.
The collaboration with HSBC gives PVH’s suppliers access to critical funding based on a set of science-based environmental targets, as well as a series of social elements such as a healthy and safe working environment, compensation and benefits, and employment issues such as forced labor, child labour, and harassment and abuse.
The program, according to PVH, highlights the company’s long-standing commitment to driving sustainable business by continually enhancing and safeguarding the environment and human rights throughout its worldwide supply chain.
According to recent research performed by HSBC and Boston Consulting Group (BCG), global supply chains would require USD100 trillion in investment by 2050 in order to meet net-zero emissions objectives – with small and medium-sized businesses accounting for up to half of this (SMEs). According to HSBC and PVH, sustainable supply chain finance is one approach to assist major enterprises and important sectors such as the garment industry in meeting their aims and commitments.
Marissa Adams, HSBC North America’s regional head of global trade and receivables finance, said that they’re happy to utilise our international and sustainability experience to assist one of the world’s top garment businesses in meeting their ESG targets.
Sarah Clarke, PVH’s chief supply chain officer, said that PVH’s commitment to environmental stewardship and improving human rights in their supply chain is central to their ‘Forward Fashion’ approach. Access to finance is critical to ensuring that their suppliers are able to invest back into their businesses and people, contributing to their collaborative objective of developing an innovative and responsible global supply chain.
Progress of suppliers will be monitored against PVH’s Human Rights and Environmental Supply Chain standards, and performance evaluation criteria will be measured using industry-aligned methodologies. These include the Social Labour Convergence Program (SLCP), which examines environmental requirements and rates a facility’s performance against human rights and labour norms, and the Sustainable Apparel Coalition’s (SAC) Higg Facility Environmental Module. HSBC will be a significant financing partner, providing cash based on these accepted criteria and using the bank’s extensive expertise in sustainable supply chain finance initiatives that promote development.
Lewis Perkins, president of the Apparel Impact Institute, said that with this announcement, HSBC demonstrates its continued leadership in vitally needed sustainable supply chain finance to enable the textile, garment, and footwear industries’ net-zero transition. They estimate that the entire cost of decarbonizing this business will be USD 1 trillion between now and 2050, with the majority of that going toward capital investment in the supply chain. They commend HSBC and PVH for forging this strategic alliance to finance clean production at textile manufacturing sites.
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