Levi Strauss offers financial incentive to suppliers

Levi Strauss & Co has offered a new financial incentive to suppliers to meet environmental, labour and safety standards. It would begin providing lower-cost working capital to its 550 suppliers who do the best on those measures. The initiative is intended to provide even greater incentives to improve conditions by offering better-performing contractors a chance to reduce their cost of capital. The financing, which is being arranged with the World Bank’s private sector arm, the International Finance Corporation, will operate on a sliding scale. As suppliers improve conditions for employees and their environmental performance they will be rewarded with lower interest rates on working capital provided through a special IFC facility. The Levi Strauss scheme will be administered through GT Nexus, a cloud-based supply chain management system, which allows companies to arrange everything from working capital for suppliers to the shipping of goods from distant factories.