When New Yorkers are willing to wait in lines that stretch for a block to buy a pair of Rihanna’s completely impractical Fenty x Puma faux-fur slides, it’s not hard to see the singer’s influence. What’s easy to forget, however, is the people who made those must-haves.
But Puma knows. That’s why the German sports brand, owned by French fashion house Kering, launched a program that offers financial incentives for its suppliers to improve environmental, health and safety and social standards.
Designed in collaboration with BNP Paribas, a leading European bank, and the International Finance Corporation (IFC), and implemented through IT platform provider GT Nexus, the financing program allows Puma to support its suppliers worldwide in the implementation of its social and environmental standards by discounting their invoices.
Puma currently works with more than 300 external manufacturing partners, most of which are located in Asia, and distributes its products in more than 120 countries worldwide. A distinct feature of the program is that the rate at which the bank discounts the suppliers’ invoices depends not only on Puma’s credit standing but also on the supplier’s rating, which is applied after an auditing process determines that supplier’s adherence to the company’s social and environmental standards.
“This is the first program in our industry, which takes into consideration a supplier’s score in Puma’s environmental and sustainability rating as a bonus or malus on related fees. Thus our supplier’s investments in sustainability are rewarded, which is an additional incentive for them to improve their environmental and social standards,” explained Lars Sørensen, Puma’s chief operating officer.
Puma inspects its suppliers on a regular basis to ensure their compliance, and the best performing ones are upgraded and can access better funding conditions. BNP Paribas only funds suppliers that have successfully passed its own “Know Your Suppliers” checks, ensuring that those suppliers meet appropriate compliance standards.
“With the help of BNP Paribas and their global presence we can offer this innovative program to Puma suppliers worldwide,” said Frank Waechter, senior director of treasury and insurance at Puma. “This is not only an outstanding cooperation with BNP Paribas but also a great example of cross-functional internal collaboration of Puma’s finance functions and operations, which underlines our ambition to implement fast and efficient processes.”
Jacques Levet, head of transaction banking EMEA at BNP Paribas, added, “The program launched with Puma highlights the growing importance of sustainability matters across industries and demonstrates BNP Paribas’ ability to implement such innovative financing solutions. It is also a testimony of Puma’s strong innovation capacity as a leading-mover in the industry.”