The International Finance Corporation (IFC), Citi and multinational food company McCormick have rolled out a new programme offering environmental and sustainability-linked financing incentives to McCormick’s herb and spice suppliers.

The programme has been launched in Indonesia and Vietnam, where suppliers will qualify for discounted rates on their short-term working capital financing when they meet sustainability standards set by McCormick.

Such standards include performance related to labour 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,” IFC says in a statement.

The agreement has been struck as part of the IFC’s global trade supplier finance programme, a US$500mn multicurrency investment and advisory initiative set up in 2010 that provides short-term financing to small and mid-sized suppliers in emerging markets.

Through this latest agreement, a spokesperson for the IFC tells GTR that the programme will use Citi’s supplier finance platform to provide financing to a select group of McCormick’s suppliers.

The IFC spokesperson adds that an annual amount of approximately US$100mn will be provided as part of the agreement.

The IFC will also provide advisory services to supplying companies in Vietnam, helping McCormick to “build a more sustainable, traceable, certified, and quality-compliant pepper supply chain through capacity development and the empowerment of women farmers”.

“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 behaviour at every level of our supply chain,” says Michael Okoroafor, vice-president for global sustainability and packaging innovation at McCormick.

The moves come roughly a year after Citi and the IFC partnered on an US$800mn risk-sharing deal to support emerging market trade and commodity flows and finance businesses that are struggling to cope with the devastation caused by Covid-19.

GTR reported at the time that the transaction would see the pair share the risk on the portfolio of trade-related assets on a 50-50 basis.

In recent months, the IFC has also moved to increase its support to SMEs in Africa and other vulnerable regions after launching a new joint trade finance initiative alongside the Multilateral Investment Guarantee Agency.