Published 2 years ago.
About a 3 minute read.
Image: A black pepper plant grows in Vietnam | Roots of Peace
Through a new partnership with IFC and Citi, McCormick’s herbs and spices suppliers can qualify for discounted rates on short-term working-capital financing when they meet McCormick’s sustainability standards.
Spice giant McCormick & Company has partnered with
the International Finance Corporation (IFC) and
Citi to provide its herbs and spices suppliers 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 female 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, VP of 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
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The unique partnership leverages Citi’s global Supplier Finance
and is part of IFC’s Global Trade Supplier
(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.
“Promoting sustainable business starts with clear incentives,” said Rana
Karadsheh, IFC's 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.”
More and more companies are realizing that, in order to reach their
sustainability goals, they must help their suppliers rein in their own social
And McCormick’s new initiative is the latest in a growing number of efforts by
multinationals and the finance industry to foster regenerative finance practices — making much-needed financing accessible
to smallholder farmers and other small businesses in the developing world, who
often face barriers to obtaining adequate capital. Earlier this week, PayPal
joined the Catalyst Fund in its work making digital finance more
— as a way to help increase the financial and climate resilience of the
communities that are the least responsible and yet most impacted by climate
Published Aug 4, 2021 8am EDT / 5am PDT / 1pm BST / 2pm CEST