Putting Food on the Balance Sheet 2025

CommoditiesCommercial capital Upstream (supplier)At maturity Pre maturity Corporate (catalytic)Working capital financing at improved rates by leveraging food corporates Financiers can also help to make supply chains more resilient by allowing suppliers to benefit from the stronger credit ratings of their off-takers. This model allows suppliers to obtain better loan terms, which are linked to meeting specific sustainability performance indicators. For example, Walmart has established a sustainable supply chain finance (SCF) programme with HSBC through which Walmart’s suppliers (including agribusinesses) can receive earlier payment on their invoices while accessing better pricing than those available in traditional supply chain finance offerings. The involvement of a major food company like Walmart helps derisk the financing for HSBC, enabling better terms for suppliers. To qualify, suppliers must meet sustainability criteria established by Walmart. More than 5,000 suppliers currently take part in the scheme, representing 75% of sales by value in the United States.14 Financing model 2: Working capital financing at improved rates by leveraging leveraging food corporates corporatesFIGURE 6 Provision of capital Provision of non-financial servicesDirect de-risking for capital providers Tranching First-loss coverage Guarantee Interest payment Insurance premium payment Impact bonus/incentiveIndirect de-risking through demand commitments Offtake agreements Ecosystem outcome monetization Price premiumTechnical assistance/training Grace periodEnablers ESG rating Value chain networkCommercial capital ESG data validation Walmart approved InvoiceSustainability criteriaOrder placementGoods & services Payment before maturity (discounted)Mid- /downstream player ESG verification Upstream value chain player (supplier)Sustainability scoring Payment at maturity ESG data Source: HSBC, Walmart website.Model 2 Putting Food on the Balance Sheet 10