IFC today announced a partnership with McCormick & Company, a global leader in flavor, and Citi, to provide suppliers of McCormick’s herbs and spices with financial incentives linked to improvements in measures of social and environmental sustainability. The program has started with suppliers in Indonesia and Vietnam, and will soon be launched in other countries.
Under the initiative, suppliers can qualify for discounted rates on short-term working capital financing when they meet sustainability standards accepted by McCormick. Those standards include performance on labor conditions, health & 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.
The financial partnership includes an advisory component in Vietnam, where 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 to 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. Through our partnership with 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,” said Michael Okoroafor, Vice President for Global Sustainability and Packaging Innovation at McCormick & Company. “Through our Purpose-led Performance approach, we’re going beyond the industry standard to ensure that we’re improving farmer resilience, elevating women’s empowerment, and mandating ethical behavior at every level of our supply chain.”
This innovative partnership between McCormick and 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.
Adoniro Cestari, Global Head of Trade Product Management and Structuring with Citi’s Treasury and Trade Solutions, said “Bringing this sustainable financing solution to life is a huge milestone for us. 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 the 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. 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.
“Promoting sustainable business starts with clear incentives,” said Rana Karadsheh, IFC Director of Manufacturing, Agribusiness and Services for Asia and Pacific. “That’s why we’re proud to support McCormick’s sustainability goals and build upon IFC’s sustainability goals and work with them to enhance IFC’s trade finance offering. Such initiatives help make sustainable business good business for emerging market players.”
The partnership is part of IFC’s Global Trade Supplier Finance (GTSF) program, a $500 million multicurrency investment and advisory program established in 2010. GTSF provides short-term financing to small and midsized suppliers in emerging markets selling to large domestic buyers or exporting to international buyers, by discounting invoices once they are approved by the buyer. The financing rates can be linked to sustainability measures to minimize impacts on the environment and promote climate-resilient agriculture practices, while connecting smallholders to global markets.
“Rewarding our suppliers to incentivize sustainability performance enables us to further accelerate our journey toward achieving our Purpose-led Performance sourcing commitments,” said Donald Pratt, Chief Spice Buyer and Managing Director, McCormick Global Ingredients Limited.
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2020, we invested $22 billion in private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org.
About McCormick & Company
McCormick & Company, Incorporated is a global leader in flavor. As a Fortune 500 company with over $5 billion in annual sales across 160 countries and territories, we manufacture, market and distribute spices, seasoning mixes, condiments and other flavorful products to the entire food industry including e-commerce channels, grocery, food manufacturers and foodservice businesses. Our most popular brands include McCormick, French’s, Frank’s RedHot, Stubb’s, OLD BAY, Lawry’s, Zatarain’s, Ducros, Vahiné, Cholula, Schwartz, Kamis, DaQiao, Club House, Aeroplane and Gourmet Garden. Every day, no matter where or what you eat or drink, you can enjoy food flavored by McCormick.
Founded in 1889 and headquartered in Hunt Valley, Maryland USA, McCormick is guided by our principles and committed to our Purpose – To Stand Together for the Future of Flavor. McCormick envisions A World United by Flavor where healthy, sustainable and delicious go hand in hand. To learn more, visit www.mccormickcorporation.com or follow McCormick & Company on Twitter, Instagram and LinkedIn.
Citi, the leading global bank, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management. Additional information may be found at www.citigroup.com | Twitter: @Citi | YouTube: www.youtube.com/citi | Blog: http://blog.citigroup.com | Facebook: www.facebook.com/citi | LinkedIn: www.linkedin.com/company/citi