Deutsche Bank announced today that it has launched a new sustainability-linked payables finance program for chemicals and materials company BASF in Asia, aimed at motivating the company’s suppliers to adopt sustainable practices. The program will focus on BASF’s operations in China.

Under the new program, the sustainability performance of BASF’s suppliers will be measured by supplier sustainability rating platform EcoVadis, with suppliers incentivized to progressively improve performance in order to qualify for preferential interest rates. The bank added that unrated suppliers will be motivated to get rated, which will in turn encourage them to transition to sustainable practices.

Birka Benecke, Senior Vice President Corporate Treasury at BASF, said:

 “With this program, we can deepen our collaboration with our suppliers and strengthen the partnership in the area of sustainability transformation. This also gives us the opportunity to further optimise our supply chains.””

The launch of the new program follows a series of sustainable finance goals announced last year by Deutsche Bank, including a target to enable a total of €500 billion in sustainable financing and investments between 2020-2025.

Ole Matthiessen, Head of Corporate Bank for Asia Pacific, Middle East and Africa and Global Head of Cash Management said:

“We are delighted to partner with BASF on its first sustainability-linked payables finance program in Asia. We are strongly committed to our sustainability strategy and helping our clients find innovative new solutions that not only improve resilience of their supply chains, but also advance their sustainability footprint to future proof their operations.”