BASF introduces its initial payables finance program tied to sustainability, following a launch in Asia.
BASF, a leading chemical company, has taken a significant step towards integrating sustainability objectives with financial operations in Asia by launching its first sustainability-linked payables finance program in the region, with a specific focus on its operations in China. The innovative financing initiative, introduced in collaboration with Deutsche Bank, is designed to link BASF's payables financing to sustainability performance indicators, encouraging more sustainable business practices through financial incentives[1].
The program converts BASF's existing payables finance program to a sustainability-linked financing for some of its subsidiaries in China. Rated suppliers are incentivized to progressively improve their performance to qualify for preferential interest rates. Unrated suppliers are motivated to get rated, encouraging them to transition to sustainable practices[2].
The sustainability-related performance of suppliers will be measured by EcoVadis, a globally recognised supplier sustainability rating platform[3]. This program aligns with BASF's broader corporate commitment to environmental responsibility and sustainability.
Birka Benecke, Senior Vice President Corporate Treasury at BASF, is looking forward to deepening the collaboration with suppliers and strengthening the partnership in the area of sustainability transformation. Ole Matthiessen, Head of Corporate Bank for Asia Pacific, Middle East and Africa and Global Head of Cash Management, is delighted to partner with BASF on this program[4].
The program has been recognised by The Asset's Triple A Treasurie Awards for 'Best ESG Solution in China'. It is also worth noting that BASF's website has been named by Euromoney's Awards for Excellence as 'World's Best Bank for Corporates'.
BASF in China has taken further steps towards sustainability, including a 10-year power purchase agreement to support 100% renewable energy adoption at manufacturing sites in Jiangsu province. This agreement with partners like CLP and Envision Energy forms part of BASF's goal to achieve net-zero carbon emissions by 2050 and complements the sustainability-linked finance program by enhancing the company's green operational footprint in China[3].
For media inquiries regarding the BASF's sustainability-linked payables finance program in China, please contact Kate Fields (+852 2203 5094, kate.fields@ourwebsite) or Doris Yu (+86(10)59698619, doris.yu@ourwebsite).
[1] https://www.deutsche-bank.com/en/about_us/press/releases/2021/02/deutsche-bank-and-basf-launch-sustainability-linked-payables-finance-program-in-china.html [2] https://www.deutsche-bank.com/en/about_us/press/releases/2021/02/deutsche-bank-and-basf-launch-sustainability-linked-payables-finance-program-in-china.html [3] https://www.basf.com/en/media/basf-news/press-releases/2021/bringing-sustainability-to-life-in-china.html [4] https://www.deutsche-bank.com/en/about_us/press/releases/2021/02/deutsche-bank-and-basf-launch-sustainability-linked-payables-finance-program-in-china.html
This program encourages business partnerships to adopt sustainable practices, as BASF's financing initiative links payables to sustainability performance indicators in China's market. The financial incentives offered to rated and unrated suppliers within this program aim to foster progressively improved sustainability in business, aligning with BASF's broader corporate commitment to environmental responsibility and sustainability.
