Incentivizing Sustainable Supply Chain Investments

The IFC and Levi Strauss & Co. have joined forces under the Global Trade Supplier Finance program to offer low-cost loans to garment suppliers in developing countries, to help them upgrade their facilities and processes to be more sustainable.  The program already includes six of Levi’s Asian suppliers , and will continue to expand with the objective of rewarding garment suppliers with low-interest loans in accordance to their performance on social and environmental issues. The higher a supplier scores on the Terms of Engagement, the lower their interest rates will be.

Apart from offering suppliers much-needed financing, the program also offers suppliers a way of differentiating themselves from competitors through upgrading to have better environmental and social performance. The partnership aims to create a sustainability “race to the top” within the Levi’s supply chain and in the garment industry as a whole.

Why you should care

Access to low-cost financing is a challenge for manufacturers in the garment industry. The IFC and Levi Strauss & Co. have structured their partnership to provide this financing and also incentivize vendors to improve their sustainability performance.

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