IFC has partnered 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.
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.
“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.”
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.”
“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.”
“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.
