How can we improve financing for farmers committed to sustainability? In an effort to answer this question and establish a dialogue with participants in the agriculture value chain, the Rainforest Alliance and Citi Foundation have hosted two Sustainable Value Chain Finance (SVCF) workshops. Here, Rainforest Alliance president Tensie Whelan discusses how sustainable practices can mitigate risk, a crucial consideration for producers interested in sustainability.
[To learn more about our work in sustainable value chain finance, read a new report produced with Citi Foundation.]
Why did the Rainforest Alliance become involved in sustainable value chain finance?
We work with millions of producers around the world who want to invest in sustainable practices, such as improving waste management or building better housing for their workers, but have very little capital. Because these producers are part of supply chains that typically help to finance harvesting, we became interested in how we might encourage financing for sustainability initiatives.
Can you explain how sustainable practices mitigate risk and protect the land and those who farm it?
To earn Rainforest Alliance certification, a producer is required to institute a comprehensive farm management system, which minimizes costs, improves net income, reduces environmental degradation and protects water, soil and wildlife, according to numerous studies.
What was the most exciting result of the workshop?
A wide range of players are interested in this topic. As these players make investments in sustainability—whether they are corporate brands, intermediaries or financiers—they see the need for more financing to help scale up sustainability. It’s the right time to work together to design transformative change.
How are companies investing in the sustainability of their supply chains?
Many are requiring (and helping) their suppliers meet international standards for sustainability, including the standards required for Rainforest Alliance certification. In some cases, businesses are joining forces to tackle shared challenges and investing together in training and technical assistance.
Where can I find more information about SVCF?
There are a number of great sources, including the new SVCF summary report that we produced with Citi Foundation. I’d also recommend checking out the following:
- Global Agricultural Value Chains: Sustainable Growth as a Means for Sustainable Development by Patricia Devaney, Director of Knowledge and Impact, Root Capital
- Your Coffee, Their Lives, Our Planet by Yasmina Zaidman, Director of Communications, Acumen Fund
- Rural and Agricultural Finance: Taking Stock of Five Years of Innovations by Jason Agar, Kadale Consultants for ACDI/VOCA.
- A Fresh Look at Rural & Agricultural Finance by RAFI Notes