10th November 2021 – Citi Asia Pacific announces the conclusion of an Environmental, Social and Governance (ESG) Trade Loan to support Olam International Limited (Olam) in India. A first for Citi in the region and Olam in India, the loan will support Olam’s objective of helping a large number of farmers in Northern India adopt sustainable rice farming practices.
Rice cultivation is a leading contributor to climate change, emitting 10% of all global man-made methane emissions while consuming a significant amount of water1. Supported by Citi India’s financing, Olam will promote sustainable rice farming practices including the use of land, water, soil, nutrients and general resource allocation and greener practices during the land preparation, planning, harvesting and post-harvesting stages.
Through this project, farmers will work towards meeting the standards of the Sustainable Rice Platform (SRP), of which Olam is a governing member. Co-convened by the United Nations Environmental Programme (UNEP) and the International Rice Research Institute, the SRP is a global multi-stakeholder platform to promote resource efficiency and sustainable trade flows, production and consumption operations, and supply chains in the global rice sector.
Paul Nicholson, Head of Rice Research and Sustainability for Olam’s global rice business said, “At Olam, we are intent on supporting the Sustainable Rice Platform in order to re-imagine this sector by improving the livelihoods of farmers and their families, and protecting the environment. Citi shares our ambition, and we are pleased to partner with them to drive positive social and environmental impact.”
Sanjay Sacheti, Olam India CEO said, “Olam is at the forefront of adopting and encouraging sustainability at the core of every business we do in India. The Sustainable Rice Platform headed by Nitin Gupta and supported by our Rice team in India is an excellent initiative that supports our sustainability focus. Through SRP, we are transforming rice farming across Haryana and Punjab, having covered 10,000 acres of land already with a target to cover 35,000 to 40,000 acres of land by 2025. We welcome Citi India in partnering with us to support our endeavors in sustainable rice farming and look forward to working closely together on future sustainability initiatives”.
The ESG trade loan for Olam contributes to Citi’s global US$500 billion Environmental Finance Goal, part of Citi’s Sustainable Progress Strategy announced in July 2020. Citi recently established a target of US$1 trillion in sustainable finance by 2030, which includes US$500 billion in environmental finance and US$500 billion in social finance. This follows Citi’s previous ten-year US$100 billion Environmental Finance Goal, which was met four years early with US$164 billion towards environmental solutions (2014-2019).
Kanika Thakur, Asia Pacific Trade Head, Treasury and Trade Solutions, Citi, said, “Guided by a commitment to drive positive social and environmental impact through our products, services and work with clients, we are leveraging our financial expertise to help clients achieve their sustainability objectives, which increasingly includes addressing environmental and social challenges across supply chains. We are pleased to be partnering with Olam in our first ESG trade loan transaction in Asia Pacific as we support their ESG priorities. More broadly, we are seeing increasing demand for ESG financing amongst our treasury clients as they evaluate their operations and supply chains. We look forward to continued activity in this space as we further build out ESG-focused solutions across trade loans, sustainability-linked supply chain financing as well as agency-backed financing.”
“Sustainable agriculture is gaining prevalence and we are working closely with clients across industries to create tailored environmental financing and ESG-linked financing solutions. Sustainability is increasingly becoming an important theme across corporates in India. While ESG financing is at a nascent stage in the country, the transaction demonstrates Citi’s ability to support sustainable practices and generate impact through the co-creation of innovative solutions for clients,” said Mridula Iyer, India and South Asia Head, Treasury and Trade Solutions, Citi.
Olam is a leading food and agri-business supplying food, ingredients, feed and fibre to 17,300 customers worldwide. As a governing member of SRP, Olam guides the multi-stakeholder platform to adopt holistic standards including water and land use, labour standards, greenhouse gas emissions, and reducing chemical inputs, all while maintaining production yields.
1https://www.olamgroup.com/products-services/olam-global-agri/rice-specialty-grains-and-seeds/rice/rice- sustainability.html
