Financial Incentive Mechanisms for Enhancing Multinational ESG Compliance within Global Supply Networks
Author(s): Arvinder Singh, Meenakshi Iyer, Dr. Sameer Deshmukh, Kavita Rao
Affiliation: Department of Business Policy, Xavier School of Management (XLRI), Jamshedpur
Page No: 16-19
Volume issue & Publishing Year: Volume 3, Issue 2, 2026-02-24
Journal: International Journal of Modern Engineering and Management | IJMEM
ISSN NO: 3048-8230
DOI:
Abstract:
Global supply networks are under increasing pressure to meet stringent Environmental, Social, and Governance (ESG) standards. However, small-scale suppliers often lack the capital to invest in sustainable transformations. This research evaluates the impact of Sustainable Supply Chain Finance (SSCF) as a mechanism for incentivizing compliance across international borders. By analyzing 15 multinational corporations (MNCs) and their multi-tier supplier networks, the study examines how "dynamic discounting"—where suppliers with higher ESG ratings receive preferential financing rates—affects carbon footprint reductions and labor safety improvements. Our results indicate that SSCF programs lead to a 14% improvement in supplier sustainability scores within the first 18 months of implementation. The paper concludes that integrated financial incentives are more effective than punitive audits in fostering long-term supply chain resilience and ethical alignment.
Keywords:
Sustainable Supply Chain Finance (SSCF); ESG Compliance; Green Logistics; Corporate Social Responsibility (CSR); Strategic Finance; Dynamic Discounting; Multi-tier Supply Chains.
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