Knorr-Bremse rewards its suppliers for more sustainable business practices
For 15 years now, suppliers of Knorr-Bremse have benefited from the Supply Chain Finance
program run by Deutsche Bank. For example, they get their money sooner because the bank
pre-finances at attractive interest rates until Knorr-Bremse pays the invoice. The financing
costs for the suppliers are based on the creditworthiness of Knorr-Bremse, which usually
reduces the financing costs for the suppliers. Adding sustainability components to the
program increases these financial benefits for the suppliers; those who operate more
sustainably are rewarded with even better financial terms. In this way, the global program will
gradually encourage more and more suppliers to improve their ESG measures.
Frank Markus Weber, Chief Financial Officer and Executive Board Spokesman of KnorrBremse AG: “Our Supplier Early Payment Program is becoming more sustainable: With our
Syndicated Loan and our Sustainability Linked Bond, we have already shown how financing
instruments and sustainability can be combined in a meaningful way. The Sustainability
Linked Supply Chain Finance Program, implemented in collaboration with Deutsche Bank, is
now the third financing instrument with which we at Knorr-Bremse are specifically promoting
sustainability. The financial benefits arising from the latest program make an ESG rating
particularly attractive for suppliers, creating a win-win situation for both sides: for our suppliers
and for us as Knorr-Bremse.”
Jan-Philipp Gillmann, Head of Corporate Bank EMEA, Deutsche Bank: “Sustainability-linked
Supply Chain Finance programs enable our clients to create an incentive for their suppliers
to be more sustainable. By improving their ESG rating, suppliers can further reduce financing
costs together with their clients.”
Suppliers in the Sustainability-linked Supply Chain Finance program (SSCF) can choose
between two ESG rating providers: Ecovadis and NQC. Thus, the program provides more
flexibility compared to similar offerings. This is NQC’s debut in an SSCF program. NQC’s
supplier assurance platform is used by many global automobile brands to assess their
suppliers.
