PUMA
Using supplier finance to support more stable and sustainable supplier relationshipsÂ
Climate-related procurement risk: Supplier financial stress, rising sustainability requirements, energy and compliance costs, decarbonisation pressure and instability in manufacturing relationshipsÂ
Solution pathway: Supplier finance, sustainability-linked financing terms, supplier performance ratings and incentives for environmental and social improvementsÂ
Business type:Â Large corporate / global sportswear brandÂ
Sector: Apparel, footwear and global manufacturing supply chainsÂ
Geography: Germany / global supplier network, including emerging-market suppliers in AsiaÂ
In practice
Apparel and footwear brands rely on supplier networks that are often located in regions exposed to climate, energy and regulatory pressures. Suppliers may face rising energy costs, pressure to reduce emissions, stricter buyer requirements and the need to invest in better environmental and social performance. These pressures can create financial strain, especially for suppliers with limited access to affordable finance.Â
If suppliers cannot access capital, they may struggle to invest in efficiency, cleaner production, safer working conditions or compliance systems. This can weaken supplier reliability, increase production risk and make buyer-supplier relationships more fragile. For procurement teams, supplier financial instability can show up as delivery delays, quality problems, price pressure or the need to replace suppliers.Â
PUMA has responded by linking supplier finance to sustainability performance. In partnership with IFC and later with BNP Paribas, PUMA developed financing programmes that allow suppliers to access working capital on terms linked to their performance against PUMA’s environmental, health, safety and social standards. Suppliers with stronger performance can access financing at lower cost.Â
This changes the procurement relationship. Instead of only setting sustainability expectations and leaving suppliers to fund improvements themselves, PUMA uses its purchasing relationship and credit strength to help suppliers access finance. This can make it easier for suppliers to invest in improvements while giving PUMA a stronger, more stable supply base.Â
The model is especially relevant as climate and transition pressures increase across manufacturing supply chains. Suppliers are increasingly expected to reduce emissions, manage energy use, meet environmental standards and respond to physical climate risks such as heat and flooding. Finance-linked incentives can help make these requirements more achievable, reducing the risk that supplier relationships become unstable under rising cost and compliance pressure.Â
The case is useful for this section because it shows that stable supplier relationships are not only built through contracts. They can also be strengthened through finance mechanisms that share benefits, reward good performance and help suppliers adapt to changing operating expectations.Â
Why this example was selected
This case study was curated because PUMA’s supplier finance programme has been externally recognised including by the World Economic Forum, as an innovative mechanism for strengthening supplier performance and relationships. IFC described the programme as the first of its kind signed by a European brand with IFC, offering financial incentives for suppliers in emerging markets to improve environmental, health and safety and social standards.Â
BNP Paribas also profiled its later collaboration with PUMA as an innovative financing structure that rewards suppliers for meeting social and environmental standards. Wider sector coverage has highlighted the model as a way of connecting supply-chain finance with sustainability performance.Â
The example is useful for the Business Knowledge Hub because it shows a practical procurement adaptation for buyer-driven supply chains. Where suppliers face rising costs and investment needs linked to climate and sustainability expectations, buyer-backed finance can help maintain supplier viability, reduce relationship instability and support more predictable sourcing.Â
