# How can a supplier qualify for a buyer's sustainable supply chain finance programme?

Canonical: https://senseible.earth/answers/buyer-sustainable-supply-chain-finance

Get onboarded to the buyer's supply chain finance programme, then meet the sustainability criteria it prices on. These are usually set by the buyer and its bank: sharing emissions data, an external sustainability rating, a reduction target or certifications. Ask the buyer for the written criteria and keep the evidence current every year.

## How these programmes work

In supply chain finance, often called reverse factoring, a bank pays the supplier's approved invoices early, at a discount based on the large buyer's credit rather than the supplier's. A sustainable version links the discount to the supplier's sustainability performance, so a supplier that meets the criteria pays less for early payment.

The terms are private contracts between buyer, bank and supplier. There is no public rule on the size of the discount.

## Criteria buyers commonly use

Where the pricing is tied to targets, banks often borrow ideas from the Sustainability-Linked Loan Principles: KPIs that are material, measurable and verified.

- Sharing Scope 1 and 2 emissions, sometimes Scope 3, each year.
- A score from an external sustainability rating provider.
- A set emissions reduction target, or progress against one.
- Certifications or audits on labour and environmental practice.

## Steps for a supplier

1. Ask your buyer's procurement or treasury team whether a programme exists and for its written criteria.
2. Complete the bank's onboarding and know-your-customer checks.
3. Build an emissions record from your own invoices and bills, so the number can be traced.
4. Submit the required data or rating on time each cycle; missing a cycle usually means standard pricing.

## How this differs from LkSG and due diligence

Germany's Supply Chain Act and similar laws oblige the buyer to check suppliers for human rights and environmental risks. That is a legal duty and a condition of doing business. Sustainable supply chain finance is a voluntary reward: better payment terms for suppliers who perform.

## What Senseible does here

Senseible gives a supplier a document-backed Scope 1 and 2 record from its own invoices and bills, the kind of KPI these programmes ask for; "Verified" in Senseible means its rule checks passed. It does not run or arrange supply chain finance, and it does not give an external rating.

- [Germany's Supply Chain Act for Indian suppliers](https://senseible.earth/climate-intelligence/germany-supply-chain-act-lksg-indian-suppliers)
- [Do buyers pay more for low carbon suppliers](https://senseible.earth/answers/do-buyers-pay-more-for-low-carbon-suppliers)
- [Green finance](https://senseible.earth/green-finance)

Sources: [LMA, APLMA and LSTA Sustainability-Linked Loan Principles](https://www.lma.eu.com), [GHG Protocol Corporate Standard](https://ghgprotocol.org/corporate-standard)

Last reviewed 2026-10-15.