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Competitive pressures triggered by new environmental regulations, labor standards, energy costs, and government and consumer demands are leading many large companies (off-takers) to incorporate sustainability standards into contractual relationships with suppliers to reduce operating risks and ensure profitability and growth. Suppliers able to meet these high value added standards are likely to enjoy increased demand in domestic and import markets and even more competitive pricing.

What is sustainable supply chain finance?

It is capital investments by growers to improve farming techniques and raise the quality of their produce to meet the growing demand for organic, certified and sustainably-produced goods in global markets.

Local financial institutions can partner with global buyers to provide access to finance at competitive terms and tenors for micro- and small and medium enterprises (MSMEs) that lack the necessary finance and technical skills to improve environmental and social management and operating performance.

The Role of Financial Institutions

Many suppliers, especially micro, small and medium size enterprises, rely on traders that make funding available to support short-term and pre-export cash flow needs as they do not have access to the formal financial sector.

Re-shaping the financing flows in supply chains by involving financial institutions and allow them to play a more significant role would have a huge development impact at the level of the micro, small and medium size producers.

The needs and deliverables of the financial institutions are summarized below:

Outcome of E&S Risk Management
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