Embedding sustainability targets in working capital solutions was a central theme of this year’s Working Capital Forum Europe held in Amsterdam.
More than 250 Speakers and delegates gathered at the Beurs van Berlage on 1st December, all eager to share their experiences over the last year and listen to the latest market successes and technological advancements.
This year’s Working Capital Gold Award winner Coca-Cola Europacific Partners set the bar high with its environmental, social and governance (ESG)-linked supply chain finance programme launched earlier this year.
The programme sets suppliers ESG targets to reach in return for improved financing rates. It is part of CCEP’s goal to not only reduce its own carbon footprint but tackle the carbon emissions caused by its supply chain.
Speaking at the event, Anthony Breach, director, procurement, Coca-Cola Europacific Partners said that the programme reflects new ways SCF can be used beyond cash flow improvements.
“It changes discussion with suppliers. We can now talk about SCF from sustainability perspective,” he said.
Other presentations also included a sustainability angle, including the European discount retailer Pepco who is exploring how to incorporate ESG into its working capital offering, or Sweden’s Vattenfall which is using SCF to help win windfarm concessions to help move the energy industry towards more renewable sources.
While there was plenty of enthusiasm for the new ESG-linked working capital solutions, the mood was slightly tempered by talk of challenging economic conditions ahead.
The ongoing war in Ukraine, US-China tensions, rising inflation around the world and interest rates hikes are all placing pressure on supply chains and the price of food and energy. Menno Middeldorp, head of RaboResearch at Rabobank opened the day’s event with an exploration of the global economy – and some gloomy forecasts for the coming year.
On a positive note, the industry seemed ready to shake off recent scandals that have blighted the market.
Last year’s collapse of Greensill Capital had the potential to undermine the supply chain finance market. There have also been long-term concerns about the impact of new regulation on the use of SCF.
The demise of Greensill was however dismissed as a just a “ripple” in the market by one panellist, while the new FASB and IASB regulations were widely welcomed as a way of providing greater transparency in the industry.
One speaker referred to the rules as creating a “level playing field” for all users of SCF.
For further coverage of the day’s events, clink on the links below.
Tensions with China to Push Companies to Diversify Manufacturing
SCF can help win windfarm concessions, says Vattenfall
‘Simplicity’ is essential when designing in-house SCF programme
New disclosure regulations “welcomed” by SCF market
Pepco looks to SCF to fuel expansion
Automation is “key” to success of working capital solutions
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