Financial institutions and agribusinesses commit $ 3 billion to sustainable production

The Innovative Funding Initiative for the Amazon, Cerrado and Chaco (IFACC) launched by The Nature Conservancy, Tropical Forest Alliance of the World Economic Forum and the United Nations Environment Program announced an investment pledge of ‘worth $ 3 billion – with more than $ 200 million in disbursements by 2022.

With a goal of reaching $ 10 billion in commitments and $ 1 billion in disbursements by 2025, the initiative brings together eight financial and agribusiness companies to accelerate soybean and livestock production without deforestation or conversion to South America. This initiative aims to protect the land as the industry grows.

The companies – & Green Fund, AGRI3, DuAgro, Grupo Gaia, JGP Asset Management, Syngenta, Sustainable Investment Management and VERT – announced their financial commitments and the signing of the IFACC declaration, at the COP26 World Leaders’ Summit , as part of their plans to shift the production of raw materials in the region to a more sustainable model.

Livestock and soybean production are among the main drivers of deforestation and the conversion of natural vegetation in these valuable ecosystems. Therefore, expanding investments in “forest-positive” production models is essential.

It complements other efforts such as supply chain procurement commitments, traceability systems, land use and trade policy reform, and jurisdictional approaches.

Funding from these private entities will accelerate the flow of capital to farmers to shift to more sustainable business models, including expanding production on degraded pastures and increasing yields through sustainable intensification of land use. livestock.

As the global demand for agriculture grows at a breakneck rate – more than double the rate of human population increase, the Amazon, Chaco and Cerrado face significant risk of conversion.

At the same time, the growing international demand for deforestation-free products, regulatory changes in consuming countries and investor expectations require a major transition of food production systems.

New finance collaborations such as IFACC can help accelerate the change needed to respond to these emerging trends.

Industry quotes

Nanno Kleiterp, Chairman of the Board of & Green, & Green said: “We work on the most difficult and complex raw materials, and this is where we want to make an impact. Ultimately, we want to show that inclusive, sustainable and deforestation-free commodity production can be commercially viable. “

Nick Moss, Director, AGRI3 Fund said, “Scaling up business models that promote sustainability and conservation in the land use sector requires the mobilization of significant amounts of capital. By joining IFACC, we see a huge opportunity to be able to build on our current work, develop new partnerships and initiatives and share knowledge, with the overall goal of mobilizing more funding for sustainable land use. in the Amazon and Cerrado region. AGRI3 will contribute to the general objectives of IFACC by providing guarantees to commercial lenders to support loans to eligible sustainable land use projects in the region.

Fernanda Mello, CEO, DuAgro said, “Becoming a signatory to IFACC encourages us to set firm goals for our role in this new world. We will use our market experience and our privileged position, of those who deal with the entire agricultural chain and the investors who fund it, to map and seize the opportunities for green bond issuance in Brazil. By 2022, we intend to issue at least 30 million reais in green bonds. By 2025, 30% of the total financial volume of our operations will comply with IFACC requirements, and over the next five years, this percentage is expected to reach at least 35%.

João Paulo Pacífico, CEO, Grupo Gaia said, “We are very honored to be one of the signatories of IFACC and to contribute to such an important environmental issue. In a few years, we’ll look back and wonder how some companies haven’t signed on to the IFACC declaration, an extremely urgent commitment for the world.

José Pugas, Partner and Head of ESG and Agri-food at JGP Crédit, said: “We financial leaders have a duty to consciously use our capacity for transformation through capital, acting proactively to accelerate the transition to the green economy. By joining IFACC, we at JGP invest our efforts in the belief that initiatives like this, which combine the productive stimulus with the need for environmental restoration, will be able to generate the greatest impact and to fulfill the social function of capital more effectively. “

Pedro Moura Costa, CEO, Sustainable Investment Management, said: “Through our innovative financial approaches, we are offering financial incentives to farmers, who are committed to ending deforestation associated with the expansion of soybean cultivation in the Brazilian Cerrado. The Responsible Commodities Facility will create a series of debt funds, capitalized through the issuance of green bonds, to direct financing towards sustainable agricultural practices in the region, thereby contributing to the objectives of IFACC.

Daniel Vennard, Director of Sustainable Development at Syngenta, said: “One of the most impactful transformations we can make to global agriculture is to reclaim degraded farmland. In Brazil, we are working with The Nature Conservancy, farmers and other stakeholders to recover 1 million hectares of degraded pasture in Cerrado, including an affordable line of credit for farmers to finance the investment. Reaching our goal will require $ 2 billion in investment – which is why it’s crucial that international groups and investors collaborate through initiatives like IFACC.

Martha De Sa, CEO, GREEN said: “In addition to setting objective targets, such as issuing at least R $ 100 million in green bonds next year, VERT is committed to working for the education of the market in which it operates. : on the one hand, encourage the adjustment of rural producers to IFACC parameters and, on the other hand, promote the availability of good greens for impact investors.

Marianne R. Winn