The challenge

PVH Corp. (PVH) has a long-standing commitment to driving sustainable business by continuously improving and protecting the environment and human rights across their global supply chain, which is core to their Forward Fashion strategy – driving fashion forward for good. The availability of accessible financing is pivotal to ensuring suppliers are empowered to invest back into their businesses and people, and contribute to the collective goal of creating an innovative and responsible global supply chain. In order to ensure progress is made to advance their targets and commitments, PVH partnered with HSBC to provide its suppliers with access to critical funding based on a set of environmental and human rights targets. These included carbon emissions as well as healthy and safe working environments, compensation and benefits, and employment issues, such as forced labour, child labour, and harassment and abuse. Specifically, environmental standards are assessed by the Sustainable Apparel Coalition’s Facilities Environmental Module, and human rights and labour standards are measured using the Social and Labour Convergence Programme.

The solution

PVH worked with one of its major banking partners, HSBC, to implement a sustainable supply chain financing (SCF) programme on top of the company’s existing supply chain financing engagements to support its sustainability objectives. The programme was a seamless collaboration comprising the Global Trade and Receivables Finance teams of HSBC HK and US as well as the Treasury and Corporate Responsibility teams of PVH.

Based on suppliers’ performance towards specific human rights and environmental criteria, they are rated by the PVH Supplier Ratings system. With the top two rating designations, the suppliers would receive discounted pricing for existing supply chain financing rates. The programme works as a way to reward suppliers with exceptional performance in social and environmental aspects and incentivise performance.

Best practice and innovation

PVH requires human rights and environmental impact assessments during the supplier onboarding and throughout the production cycle. Suppliers are rated using data gathered with the Social and Labour Convergence Programme (SLCP¹) and the Sustainable Apparel Coalition (SAC²) Facilities Environmental Module and are categorised into different tiers in the PVH Supplier Ratings system. Using a well-established framework, the sustainable SCF programme grants attractive discounted pricing for existing supply chain financing rates to suppliers with high performance.

Throughout HSBC’s history in providing trade financing solutions to a wealth of clients from all backgrounds and sizes, this deal is the first sustainable supply chain financing programme that includes a human rights component besides the environmental one. Apart from setting targets pertaining to environmental protection and sustainability, PVH’s rating framework includes standards for labour practices to truly fulfil social and governance objectives. HSBC and PVH’s collaboration encompass PVH’s global footprint, further making this deal unprecedented in scale as well as scope.

Key benefits

• Cost savings for suppliers.
• Improved visibility.
• Future proof solution.