WFY’25: How sustainability goals are reshaping the receivables financing model

In his article featured in the World Factoring Yearbook 2025 (WFY’25), Nirav Choksi, CEO and Co-founder of CredAble, explores how sustainability objectives are transforming the receivables finance landscape. Below is an excerpt from this excellent article.

The integration of environmental considerations into mainstream financial decision-making and lending is gaining traction, slowly but steadily. This seems inevitable given that sustainability is no longer a siloed concern. It is an international priority, embedded across policies and industries. However, governments and organisations worldwide are at different stages of the sustainability journey.

As always, the financial services industry is leading from the front, and receivables finance is playing a part in that. There are a growing number of indications that the financial services sector is taking environmental influences more seriously:
• Banks dedicate around USD 1m to USD 5m annually to strengthen their ESG disclosure practices.
• Reports also confirm that nine out of 11 large banks have onboarded a head of sustainability or chief sustainability officer (CSO) to oversee their environmental, social, and governance (ESG) strategy and implementation, along with stakeholder engagement and climate risk management.

As sustainability moves from boardroom discussions to real-world business strategies, corporates and their ecosystem of suppliers are in a race to develop strong ESG credentials. With this shift underway, finance leaders globally are rethinking how working capital flows through supply chain networks. This is where receivables finance is set to have an increasing influence.

The rising momentum in trade and supply chain finance has resulted in a substantial growth in receivables financing. Consequently, sustainable receivables finance is emerging as a powerful lever — empowering corporates to fund growth, de-risk operations, and support ESG – compliant suppliers.

Why it is time to rethink receivables financing
According to a recent EY survey, two out of three finance leaders point out that corporate stakeholders have asked more questions about sustainability during the past two years. In addition to that, indirect emissions of a business (which account for over 70 per cent of its carbon footprint) are primarily tied to the suppliers, buyers, and intermediaries that the business works with.

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