Citi has concluded an environmental, social and governance (ESG) trade loan for Olam International in India. A first for Citi in Asia-Pacific and Olam in India, the loan will support the food and agri-business company’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 water. 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.
“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,” says Olam India chief executive officer Sanjay Sacheti.
The ESG trade loan for Olam contributes to Citi’s global US$500 billion environmental finance goal, part of the bank’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.
“Sustainable agriculture is gaining prevalence and we are working closely with clients across industries to create tailored environmental financing and ESG-linked financing solutions," says Mridula Iyer, India and South Asia head, treasury and trade solutions, at Citi. "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.”