Tesco will offer its supply base sustainability-linked supply chain finance in a move the it hopes will encourage more suppliers to sign up to science-based emissions reduction targets.

Suppliers will be offered preferential financing rates via Santander’s supply chain finance platform which incentivises suppliers to make positive changes to their business while tracking performance and creating a culture of continuous improvement. The rates will be based on each suppliers’ carbon data disclosure, emissions reduction targets and progress against sustainability goals.

Tesco will regularly update the scope of the sustainability data requirements in line with market best practice and its own sustainability commitments.

The voluntary programme, which has been in development for 18 months and is due to launch in September, will see annual greenhouse gas emissions data provided by suppliers independently verified and assessed by sustainability experts, Anthesis.

Tesco became the first company globally to set science-based climate targets for its own operations on the more ambitious 1.5C trajectory of the Paris Climate Agreement in 2017 and last year, the retailer committed to reach its net-zero climate target in the UK by 2035, fifteen years earlier than originally planned. In the same year, the retailer also set science-based targets for its supply chain, set on a 2C trajectory.

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