Citi teams up with IFC and McCormick & Company
Partnership aimed at improving social and environmental sustainability.
The International Finance Corporation (IFC) announced a partnership with McCormick & Company, a global leader in foods, ingredients, and flavors, and Citi on August 2, to provide suppliers of McCormick’s herbs and spices with financial incentives linked to improvements in social and environmental sustainability measures.
The program will begin with suppliers in Indonesia and Vietnam and will soon be launched in other countries.
Suppliers can qualify for discounted rates on short-term working capital financing when they meet sustainability standards accepted by McCormick. Standards include performance in labor conditions, health and safety practices, crop management, environmental impact, farmer resilience, and women’s empowerment. The higher the supplier’s performance level in meeting these standards, the more they save.
This innovative partnership between McCormick and the IFC leverages Citi’s global Supplier Finance offering. Citi’s Supplier Finance platform is made available to McCormick’s suppliers with environmental, social, and governance credentials so they may benefit from liquidity at preferential rates based on their sustainability performance.
“Bringing this sustainable financing solution to life is a huge milestone for us,” said Mr. Adoniro Cestari, Global Head of Trade Product Management and Structuring with Citi’s Treasury and Trade Solutions. “Citi is committed to helping clients achieve their sustainability objectives, especially with respect to supply chains and environmental challenges. We are working with clients around the world to help them balance environmental and economic needs, adhere to defined standards, and manage risks in their supply chains. Helping to support the sustainability of supply chains and stimulating international trade flows are critical priorities for us.”
Citi’s Supplier Financing infrastructure has recently been enhanced to help meet clients’ environmental, social, and governance requirements and is available globally. The IFC previously partnered with Citi, in June 2020, to create an $800 million facility to boost trade finance amid the emergence of the Covid-19 pandemic.
The financial partnership includes an advisory component in Vietnam, where the IFC is helping McCormick build a more sustainable, traceable, certified, and quality-compliant pepper supply chain through capacity development and the empowerment of women farmers, aimed at helping achieve environmental and social improvements for pepper suppliers and producers.
“At McCormick, we’re committed to doing what’s right for people, communities, and the planet we share,” said Mr. Michael Okoroafor, Vice President for Global Sustainability and Packaging Innovation at McCormick & Company. “Through our partnership with the IFC and Citi, we’re enabling our suppliers to sustainably source our herbs and spices more easily and, in turn, are working toward our own goals at the same time.”
The partnership is part of the IFC’s Global Trade Supplier Finance (GTSF) program, a $500 million multi-currency investment and advisory program established in 2010.