Miami-headquartered fintech company Calculum has entered a partnership with ESG ranking and analytics firm InvestVerte to bring together supplier sustainability practices and payment terms.
Using artificial intelligence (AI) and machine learning, Calculum’s platform, launched last year, analyses various aspects of a company’s buying counterparty or supplier, before providing insights on how the firm can improve its payment terms.
InvestVerte, meanwhile, is an independent ESG and corporate governance research, rating, and analytics company that provides information to help investors around the world make the best investment decisions.
By bringing their solutions together, the two sides say they will be able to assist companies to optimise their payment terms based on how sustainable their businesses are, as well as facilitate the flow of sustainability-linked finance, which ties pricing to the achievement of measurable goals, usually through interest rate step-ups or step-downs or early payments that can be linked to cash discounts.
“This partnership is going to benefit both of our customer bases,” says Oliver Belin, CEO of Calculum. “Combining ESG policies with access to better payment terms and financing will make it more likely for suppliers to practice sustainability.”
“Being environmentally and socially conscious is the future of business and I feel that eventually, every company will be practicing ESG,” adds Renaud Levy, CEO of InvestVerte. “This partnership will help bring greater attention to environmental sustainability and corporate governance issues in the working capital industry.”
The development comes amid growing interest in the use of trade and supply chain finance as a mechanism to promote sustainability improvements, with numerous banks from HSBC to BBVA and Santander rolling out sustainability-linked supply chain finance programmes for their large clients’ webs of suppliers. Others, such as Standard Chartered, have developed sustainable lending frameworks for their trade finance business.
However, for many small suppliers, meeting the requirements of these programmes is an arduous task, especially for those suppliers that may be catering to multiple buyers, each with different ESG criteria.
In a statement, Calculum and InvestVerte say that their partnership will “improve supplier-client relationships by giving them clarity on what’s expected from each other in terms of sustainability practices as well as improve their working capital,” adding that their respective clients will now have access to verified ESG rankings and analytics as well as working capital metrics.
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