Reward sustainability performance in trade finance pricing

Submitted through the COP31 Sustainable Transformation Awards · SKD Türkiye (WBCSD Global Network Partner)

The company is a Turkish bank in the financial institutions sector, with more than 1,000 employees and a commercial customer base served through a digital payment and collection platform.

Sustainable finance in banking is delivered almost entirely through credit products. A business with strong environmental and social practices may obtain better terms on a loan, but the advantage stops there: the payment and collection transactions that make up its daily commercial life are priced the same way as everyone else's.

The company set out to close that gap by attaching a sustainability incentive to the commercial transaction layer instead of the lending layer, under its sustainability vision and its Next Banking approach. The intention was to move sustainability out of corporate policy and into the products customers actually use.

The base product is a digital payment and collection service for merchants. Vinov Green was launched on 1 December 2025 as its sustainability-focused sub-product, adding an eligibility assessment and a pricing advantage on top of the existing mechanics.

The base year is 2025. At launch the number of firms holding green status was 0; as of 31 July 2026, the first customer had been acquired and TRY 13.5 million of collections had been processed under green status. The initiative is therefore at an early stage, and the figures below describe the mechanism and its first months of operation rather than a mature portfolio.

Location of the initiative: Türkiye — commercial customers using the company's digital payment and collection platform

The underlying product allows a business to convert its trade receivables into digital instructions. The seller creates the instruction in the merchant portal; the debtor approves it through mobile banking, internet banking or the payment application. Once approved, the receivable is covered by a 100 per cent guarantee from the bank, and the seller can collect before maturity when cash flow requires it.

The sustainability layer sits on top of that mechanism rather than beside it. Businesses complete an environmental, social and governance assessment form in the same merchant portal and upload the supporting documents digitally: environmental permits, waste management plans, occupational health and safety documentation, evidence on employee rights, the grievance mechanism and governance practices.

Applications are reviewed centrally by the Environmental and Social Impact Analysis Directorate against standard criteria. The process is recorded and traceable end to end, and the applicant can follow the stages in the portal.

Businesses that meet the criteria are assigned green status in the system, and the associated advantages are applied automatically: a preferential merchant commission rate and a reduced cost of early collection. The incentive is therefore mechanical rather than discretionary once the assessment is complete.

The design has two consequences. Sustainability performance becomes visible in the price of an everyday commercial transaction, and the assessment itself gives applicants a structured reason to review and improve their own environmental, social and governance practices, whether or not they qualify at the first attempt.

Sustainability impact

Climate

The initiative is an enabler that works through the pricing of commercial finance rather than through the company's own operational emissions, and the two should not be confused.

No direct Scope 1, Scope 2 or Scope 3 emission reduction calculation is performed at this stage. The base year is 2025, and the product went live on 1 December 2025 with 0 firms holding green status. As of 31 July 2026, the first green-rated firm had been acquired and TRY 13.5 million of collection volume had been processed under the status. Effect is tracked through eligibility assessment results and commercial finance usage indicators rather than through emissions.

The enabling channel is nevertheless defined and operating. A firm qualifies only if it can produce environmental permits, a waste management plan and the related documentation, and once it qualifies the preferential commission and reduced early collection cost are applied automatically to every transaction it makes, so the reason to keep those practices in place recurs with each collection rather than arising once at the point of borrowing. The expected effect, as the number of green-rated firms grows from the 2025 starting position of 0, is that formal environmental compliance is maintained and improved across the production, trade and service businesses using the platform. Measuring that effect more comprehensively and comparatively as the customer base and transaction volume grow is a stated target rather than a present capability.

Measured climate-related activity figure: From the product launch on 1 December 2025 to 31 July 2026, one firm obtained green status and TRY 13.5 million in cumulative collection volume was processed under that status. The figure was calculated from the platform's eligibility and transaction records by counting firms holding green status and summing the nominal value of collections processed under green status during the period. This is a measured activity and output indicator rather than an estimate of avoided or reduced greenhouse gas emissions. No enabled or avoided emissions are currently calculated or reported; therefore, this indicator is not assigned to a GHG Protocol Scope 3 category. If financed emissions associated with the underlying exposures are measured in the future, they would generally be reported under Scope 3, Category 15 - Investments, subject to the Bank's applicable accounting methodology. Any avoided or enabled emissions would be disclosed separately from the corporate GHG inventory.

Nature

The environmental criteria applied before green status is granted cover environmental permits and waste management plans, which means the incentive is attached to practices that determine local pollution and waste outcomes rather than to carbon performance alone.

Because the same criteria are applied to every applicant regardless of sector, the effect spreads across production, trade and service businesses rather than concentrating in one industry.

The scale of that effect is currently limited by adoption: with the first customer only recently acquired, the criteria are in place but the portfolio through which they would act is still forming.

Social

The social criteria are as heavily weighted as the environmental ones. Employee rights, occupational health and safety documentation and the existence of a grievance mechanism are all assessed before green status is granted, so a business cannot qualify on environmental performance alone.

The financial mechanism itself has a social dimension for smaller commercial customers. Bringing receivables under a 100 per cent guarantee and allowing collection before maturity strengthens cash flow and financial resilience for businesses whose main constraint is working capital rather than profitability.

Governance effects are measured through the process rather than the outcome: a standard, recorded and traceable application route replaces case-by-case judgement, which makes the basis for the advantage visible to the applicant.

Monitoring rests on five indicators: the number of applications, the number of firms assessed positively, collection and transaction volume under green status, the commission and early collection advantage provided, and the number of early collections used. These are followed through portal application records, the assessment results of the Environmental and Social Impact Analysis Directorate, and transaction data.

Business impact

Benefits

The commercial logic is retention and differentiation in the payment and collection business. The advantage is attached to a product customers use continuously, which gives businesses a recurring reason to maintain the standards that earned it rather than a one-off benefit at the point of borrowing.

Early uptake is measurable rather than notional. As of 31 July 2026, the first green-rated firm had been acquired and TRY 13.5 million of collection volume had been processed under the status, which the company presents as evidence that bringing firms meeting the sustainability criteria into the receivables infrastructure works in practice.

Because the layer was built on the existing merchant platform, no new platform investment was required, and the environmental, social and governance criteria were added to commercial processes quickly, with low operational load and a standard model.

The assessment generates a structured dataset on the environmental, social and governance practices of commercial customers, which has value beyond this product for sustainable finance decisions generally.

The design is sector-independent, so it can be extended to production, trade and service businesses of different sizes through the same digital application route, central assessment and systemic assignment of the advantage.

For the customer, the benefit is direct: preferential merchant commission, reduced early collection cost, receivables under a 100 per cent guarantee, and the ability to collect before maturity to manage cash flow.

Costs

The incentive is a genuine revenue trade-off. Preferential merchant commission and a reduced early collection cost lower the fee income earned on each transaction with a green-rated firm, so the model only holds if the volume and retention it generates exceed the margin conceded.

Assessment adds a manual step to an otherwise automated product. Every application is reviewed by a specialist directorate against standard criteria, which is what makes the status credible and also what limits how fast the portfolio can grow without additional assessment capacity.

The 100 per cent guarantee on approved receivables places counterparty risk with the bank rather than the seller. That is the feature which makes the product valuable to customers, and it is the reason the underlying credit discipline cannot be relaxed for green-rated firms.

The principal adoption risks identified by the company are the document preparation maturity of applicant firms, their level of awareness of environmental, social and governance requirements, and their adaptation to the application process. These are addressed through digital guidance in the portal, standard published criteria and specialist assessment.

Vinov Green applies an early collection interest rate of 34.80%, compared with the standard Vinov İş Yeri rate of 43.00%. This represents a reduction of 8.20 percentage points, or approximately 19.1%. The guarantee fee charged for each instruction is 0.4% (four per thousand), compared with the standard fee of 0.8% (eight per thousand), representing a 50% reduction. The cost of the incentive to the Bank is calculated internally but is not disclosed. No separate assessment cost is allocated per application. The application and assessment process is offered free of charge to all customers, so the customer cost per application is TRY 0.

Impact beyond sustainability and business

Co-benefits

The systemic contribution is that sustainability is rewarded in commercial payment and collection behaviour rather than only in credit processes. As businesses improve their environmental, social and governance standards they gain access to better commercial finance terms, which supports the spread of sustainable practice along the value chain.

The model creates a working collaboration between the financial sector and the real economy, in which the bank supplies the assessment framework and the incentive while the businesses supply the evidence and the improvement.

Because the assessment covers environmental, social and governance criteria under a single digital process, applicants receive a structured view of where their practices stand across all three, which has value to them independently of the pricing outcome.

Potential side-effects

A document-based assessment favours firms that already hold formal documentation. Businesses with sound practices but weak paperwork can be excluded, which risks directing the advantage towards larger and more mature applicants rather than towards the firms where improvement would matter most. The company identifies document preparation maturity as a principal risk and addresses it with digital guidance, but the underlying bias is structural.

Green status could be read externally as a sustainability certification. It is an eligibility decision based on submitted documents assessed against standard criteria, not a verified performance rating, and the distinction has to be maintained in how the status is described to avoid an unintended claim.

Attaching a price advantage to a self-declared document set creates an incentive to present rather than to improve. Central assessment by a specialist unit is the control against this, and its capacity has to grow with the portfolio if the control is to remain effective.

Typical business profile

The model suits banks and payment institutions that already operate a digital receivable, payment and collection platform for commercial customers, where the transaction relationship is continuous rather than occasional.

It requires an internal environmental and social impact assessment capability, because the credibility of the incentive rests on a specialist unit applying standard criteria rather than on a self-declaration being accepted at face value.

It is most relevant in markets where small and medium-sized commercial customers face working capital constraints, since the value of guaranteed receivables and early collection is what makes the pricing advantage worth pursuing.

Delivery engages cash management marketing, product development, environmental and social impact assessment, and digital channel functions working to a shared product cycle.

Approach

1. Start from a commercial platform customers already use: Build the sustainability layer onto an existing digital payment and collection product rather than launching a separate green product, so that no new platform investment is required and the incentive reaches everyday transactions.

2. Define eligibility criteria across all three dimensions: Set standard requirements covering environmental permits and waste management, occupational health and safety, employee rights and a grievance mechanism, and governance practices, so that a firm cannot qualify on one dimension alone.

3. Put the application inside the existing portal: Add the assessment form and digital document upload to the merchant portal the customer already uses, and let applicants track the stages of their application in the same place.

4. Route assessment to a specialist unit: Have a dedicated environmental and social impact assessment function review every application against the published criteria, and record the assessment so that the basis of each decision is traceable.

5. Define the advantage in the pricing system, not by negotiation: Configure preferential merchant commission and reduced early collection cost so that they are assigned systemically once status is granted, which keeps the incentive objective and removes case-by-case discretion.

6. Leave the underlying transaction mechanics unchanged: Keep the digital instruction, debtor approval through mobile and internet banking, the 100 per cent guarantee on approved receivables and early collection before maturity exactly as they work in the base product, so that the sustainability layer adds pricing rather than complexity.

7. Set the measurement frame before scaling: Fix the base year, record the starting position, and track applications, positively assessed firms, transaction volume under green status, the advantage provided and the number of early collections used, drawing on portal records, assessment results and transaction data.

8. Plan the rollout sector-independently and manage the document gap: Extend to production, trade and service businesses through the same route, and reduce the risk of excluding capable but under-documented firms through digital guidance, published standard criteria and specialist assessment.

Stakeholders involved

• Project leads: The product was developed under the company's sustainability vision and its Next Banking approach, with the intention of making sustainability part of customer products rather than of corporate policy alone. The Cash Management Marketing Directorate and the Product Development Directorate own the product design and the commercial terms attached to green status.

• Company functions: The Environmental and Social Impact Analysis Directorate carries out the assessments, reviewing applicants on environmental permits, employee rights, occupational health and safety practices, waste management processes and governance mechanisms. It works with the marketing and product development functions to keep the criteria standard and the assessments objective, so that the pricing advantage is assigned on the same basis for every applicant. Digital channel teams maintain the portal journey through which applications and documents are submitted and tracked.

• Main providers: No external solution provider is named in the source material. The sustainability layer was added to the company's own digital payment and collection infrastructure using internal product development and assessment capability.

• Other: Commercial businesses that meet the sustainability criteria are the active external stakeholder: they upload their environmental, social and governance information and documents through the merchant portal, take part in the assessment process, and gain the opportunity to review and improve their practices whether or not they qualify. The model is designed as a collaboration between the financial sector and the real economy. Public regulation is a further reference point, with the assessment criteria and the process aligned to regulatory and reporting expectations.

Key parameters to consider

The product went live on 1 December 2025 with a base year of 2025 and a starting position of 0 firms holding green status. As of 31 July 2026, the first customer had been acquired and TRY 13.5 million of collection volume had been recorded under green status, so the results available describe the mechanism and its early operation rather than a demonstrated portfolio effect. Measuring the financial, environmental, social and governance effect more comprehensively and comparatively as the customer base and transaction volume grow is a stated target rather than a present capability.

At this stage no emission reduction calculation is performed. Effect is tracked through eligibility assessment results and commercial finance usage indicators, which is the appropriate frame for an early-stage enabler but limits what can be claimed.

Scalability rests on the fact that the layer sits on existing infrastructure: no new platform investment, a standard model, low operational load, and no sector restriction. The limiting factor is assessment capacity rather than technology.

The risks that govern the rate of adoption are the document preparation maturity of applicant firms, their level of awareness of environmental, social and governance requirements, and their adaptation to the digital application process.

Implementation and operations tips

Attach the incentive to a product the customer uses continuously. A pricing advantage on daily payment and collection activity creates a standing reason to maintain standards, which a one-off lending advantage does not.

Keep the criteria document-based, published and standard. Objectivity is what makes a specialist assessment defensible when an application is refused, and it is what allows the advantage to be assigned systemically rather than negotiated.

Expect document readiness, not willingness, to be the bottleneck. Firms with sound practices frequently lack the formal paperwork, so guidance inside the application journey does more for adoption than promotion of the incentive itself.

Measure applications alongside approvals. The gap between the two is the clearest signal of where applicants are failing and therefore of where the guidance needs to be strengthened.

Separate the enabling effect from the bank's own footprint when reporting. The value here is what the incentive changes in customer behaviour, and reporting it as an operational emissions result would misstate both.