HSBC Bank USA and apparel company PVH, the owner of fashion brands including Calvin Klein and Tommy Hilfiger, announced the launch of a sustainable supply chain finance program, providing funding to PVH’s suppliers based on their sustainability ratings.
According to the companies, the launch marks the first supply chain financing program to be tied to both environmental and social objectives.
Supply chain issues present significant sustainability challenges for apparel and fashion companies, including social risk due to supply chains concentrated in areas with labor and human capital issues, and environmental issues, including water use, wastewater production, GHG emissions. Many of PVH’s initiatives under its “Fashion Forward” sustainability program target its supply chain, including its goals to reduce supply chain emissions 30% by 2030, have all suppliers meet social and environmental sustainability standards by 2030, and have 100% of suppliers promote safe and healthy work environments by 2025.
Sarah Clarke, PVH’s Chief Supply Chain Officer, said:
“PVH’s commitment to environmental stewardship and enhancing human rights in our supply chain is core to our Forward Fashion strategy. The availability of accessible financing is pivotal to ensuring our suppliers are empowered to invest back into their businesses and people, and contribute to our collective goal of creating an innovative and responsible global supply chain.”
Supplier financing under the new program will be tied to a set of science-based environmental targets, and to social elements including a healthy and safe working environment, compensation and benefits, and employment issues, such as forced labor, child labor, and harassment and abuse. Performance assessments will be based on industry-aligned tools, including the Social Labor Convergence Program (SLCP), which measures a facility’s working conditions performance against human rights and labor standards, and the Sustainable Apparel Coalition’s (SAC) Higg Facility Environmental Module, which assesses factors including energy use, emissions, water use, wastewater, waste management, chemical management and environmental management systems.
Marissa Adams, Regional Head of Global Trade and Receivables Finance for HSBC North America, said:
“We are proud to leverage our international and sustainability expertise to help one of the world’s largest apparel companies make progress against their ESG goals.”