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 labour 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 unique partnership leverages Citi’s global Supplier Finance platform and 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.