Sustainable Finance Frameworks for Automotive Supply Chain: ESG Due Diligence in Equipment Financing

Authors

  • Xiaotian Cui Asset Management Department, Genius Auto Finance Co. Ltd., 200127, Shanghai, China Author
  • Jiaying Chen Faculty of International Law, China University of Political Science and Law, 100080, Beijing, China Author

DOI:

https://doi.org/10.64229/3j6f5m56

Keywords:

Sustainable Finance, Automotive Supply Chain, ESG due Diligence, Equipment Financing, Regulatory Compliance

Abstract

The automotive industry faces significant changes in financing mechanisms due to environmental, social, and governance (ESG) requirements. This research examines how sustainable finance frameworks affect automotive supply chain management, particularly in equipment financing. New regulations like the EU Corporate Sustainability Due Diligence Directive create challenges for automotive manufacturers and their financial partners. This study analyzes current regulatory frameworks and proposes solutions for automotive supply chain financing that meet global sustainability goals. The research shows that ESG integration in equipment financing ensures regulatory compliance and drives operational efficiency. Through analysis of legal frameworks and industry practices, this paper demonstrates that sustainable finance frameworks are becoming essential for automotive supply chain resilience in an ESG-focused market environment.

References

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[2]European Commission. (2020). EU taxonomy for sustainable activities. https://finance.ec.europa.eu/sustainable-finance/tools-and-standards/eu-taxonomy-sustainable-activitiesen

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[8]EcoVadis. (2025). German Supply Chain Due Diligence Act (LkSG). https://ecovadis.com/regulations/german-supply-chain-due-diligence-act-lksg/

[9]Moody's. (2024). A year on from the introduction of the German supply chain due diligence act. https://www.moodys.com/web/en/us/kyc/resources/insights/year-on-introduction-german-supply-chain-due-diligence-act.html

[10]European Parliament. (2023). EU taxonomy: Green investments to boost sustainable finance. https://www.europarl.europa.eu/topics/en/article/20200604STO80509/eu-taxonomy-green-investments-to-boost-sustainable-finance

[11]Mercedes-Benz Group. (2024). ESG at Mercedes-Benz. https://group.mercedes-benz.com/investors/esg/

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Published

2025-09-19

Issue

Vol. 1 No. 3 (2025)

Section

Articles

License

Copyright (c) 2025 Xiaotian Cui, Jiaying Chen (Author)

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This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.