Acumen Resilient Agriculture Fund (ARAF)

The Acumen Resilient Agriculture Fund (ARAF) is the first climate adaptation-focused agriculture investment fund for small-scale farmers. It aims to reach 10 million beneficiaries and catalyse USD 56 million.

This funding is intended to increase the resilience of farmers through increased productivity and predictable incomes, enabling them to build a base of savings and assets to reduce the impact of future climate shocks. It aims to shift the pattern of investment in climate change adaptation activities in Africa from grants to a long-term capital approach, enabling smallholder farmers to respond to climate change more efficiently and effectively. ARAF will run for 12 years, providing time for innovative, early stage companies to develop and scale up financially viable business models.

ARAF will support innovative private social entrepreneurs in micro-, small, and medium-sized enterprises (MSMEs) by providing equity and quasi equity to agribusinesses serving smallholders. ARAF’s focus is on supporting aggregators (companies that offer bundled climate resilience solutions), agritech businesses (which provide digital platforms such as online marketplaces) and financial service providers (which help farmers diversify their income base by investing in additional productive assets). Operating so far in Ghana, Kenya, Nigeria and Uganda, ARAF also has plans to expand to other countries in East and West Africa.

The Green Climate Fund (GCF) has put in an anchor investment of USD 23 million in equity in ARAF’s first loss pool, de-risking the investment for risk-averse private sector investors. GCF has also injected USD 3 million into a USD 6 million Technical Assistance Facility to help investee companies build climate adaptive businesses that provide a financial return to ARAF and its investors.

STAKEHOLDERS:

Acumen, the Green Climate Fund, FMO, the Open Society Foundation

AgDevCo

Founded in 2009, AgDevCo is an impact investor supporting the development of agribusinesses in sub-Saharan Africa. The company provides patient capital in the form of debt and/or equity to African-based companies that have the potential to achieve far-reaching development impact. Their ultimate vision is a thriving commercial agriculture sector which benefits both people and planet. AgDevCo contributes towards this vision by investing in and supporting early stage agribusinesses (debt and equity of $2–10 million)to create jobs, produce and process food and link farmers to markets. They provide hands-on technical assistance to help build sustainability and bankability in these businesses. AgDevCo’s current portfolio has $126m of committed funds into 50 companies . To date, AgDevCo’s investments and technical assistance (current and exited investments) have engaged 516,000 (37% women) small-scale farmers and created or sustained 15,000 jobs (22% women).

AgDevCo has a dedicated Smallholder Development Unit (SDU), launched in 2015. The SDU is a $15 million, five-year project to increase the productivity of, and facilitate market access for, smallholder farmers through out-grower schemes. The scheme provides grants and technical assistance to de-risk smallholder farmers through out-grower schemes across Ghana, Malawi, Mozambique, Senegal, Sierra Leone, Tanzania, Uganda and Zambia. SDU is supported by the Mastercard Foundation (90 percent) and FCDO (10 percent)¹. AgDevCo’s Smallholder Development Unit is currently on track to meet its goal of supporting 25 agricultural enterprises, benefiting 381,000 smallholders (half of whom are women) by 2020.²

AgDevCo also provides core businesses support to its investment portfolio via its in-house team of specialists in Agriculture, ESG and Enterprise Development (finance, tax and business administration). These specialist teams provide support throughout the investment lifecycle and ultimately help to ensure portfolio businesses are agriculturally sound, sustainable and adhere to the highest ESG standards.

AgDevCo is currently fundraising for up to $16.5m to fund a new Technical Assistance Facility, which combines the inclusive TA of the Smallholder Development Unit with the core business support to develop high quality technical assistance projects to enhance financial and impact returns.

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1 ‘Smallholder Development Unit’. n.d. AgDevCo. Accessed 20 September 2020. https://www.agdevco.com/our-approach/smallholder-development-unit.html.

2 Marjan Duursma, Carolijn Gommans, Alexandra Korijn, and Mark Nichols. 2017. ‘Transforming Agriculture by Linking Technical Assistance to Blended Finance for Agriculture: Trends and Lessons from Africa’. Zeist, The Netherlands: Enclude. https://agra.org/wp-content/uploads/2018/02/Transforming-Agriculture-by-Linking-Technical-Assistance-to-Blended-Finance-for-Agriculture.pdf.

STAKEHOLDERS:

DFID; Mastercard Foundation

Aqua-Spark

Aqua-Spark is an open ended fund specialised in making equity investments in sustainable and innovative aquaculture companies across the globe. Through its synergistic and ethical portfolio, Aqua-Spark seeks to increase food security and improve ocean and freshwater health and biodiversity by advancing the aquaculture industry towards equitable food-producing practices that are safe, healthy and chemical free.

Aqua-Spark makes sound, well-informed investments in sustainable SMEs along the aquaculture supply chain. The fund prefers to be a minority stakeholder (20-49 percent), with no position size ever exceeding 20 percent of capital committed to the fund. Within the portfolio, the majority of investments are typically revenue producing firms with proven business models that wish to scale up and branch out, while some additional focus is put also to investing in companies at proof of concept stage, such as disruptive new technologies and disruptive new uses for existing products³.

At this critical juncture of accelerated growth of the industry, already larger than wildcaught fish for human consumption and on its way to tripling production in the next two years - these investments will influence how the industry develops, enabling it to reach its potential as the most resource efficient, transparent and nutritious form of animal protein production.

As of November 2020, the fund’s portfolio includes 20 companies that span the entire aquaculture supply chain. Examples include Chicoa Fish Farm, a company with a mission to kickstart the aquaculture industry in Mozambique through the sale of fingerlings (small fish for grow-out) and feed, while assisting prospective aquaculture farmers with farming know-how; Indian Ocean Trepang, a sea cucumber farmer in Madagascar that is combating the overfishing of local sea cucumber species through its own farming operations and a smallholder aquaculture farmer program; and Swedish Algae Factory, which sells algae used to clean wastewater from fish farms, thereby reducing waste in water released from recirculatory aquaculture systems.⁴

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3 ‘Our Philosophy’. n.d. Aqua-Spark. Accessed 25 September 2020. https://www.aqua-spark.nl/the-approach/our-philosophy/.

4 ‘Portfolio’. n.d. Aqua-Spark. Accessed 25 September 2020. https://www.aqua-spark.nl/portfolio/.

STAKEHOLDERS:

Private investors

Criterion Africa Partners

Criterion Africa Partners (CAP) is a private equity firm, investing in the acquisition and development of sustainable assets across the forestry value chain in sub-Saharan Africa.⁵

CAP, which emerged from Global Environmental Funds’ Africa Sustainable Forestry investment programme ⁶ now manages two funds: Africa Sustainable Forestry Fund I, which has disbursed $160 million, and the second fund, Africa Sustainable Forestry Fund II, targeting $200 million (first close at $82 million).⁷

CAP makes investments in and manages businesses within the forestry sector in three sub-sectors: plantation acquisition and rehabilitation; downstream (wood) manufacturing; and biomass energy. Its main funders are the Grantham Foundation for the Protection of the Environment, and investors include development finance institutions, foundations and family offices.⁸

Examples of CAP’s portfolio companies include: Mphome, a 6,400-hectare pine and eucalyptus plantation in South Africa; KVTC, which owns sawmills and Africa’s largest privately owned teak plantations; and Peak Timbers, a 31,000-hectare, FCS-certified timber plantation and sawmilling business.

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5 ‘Criterion Africa Partners (CAP)’. n.d. Criterion Africa Partners. Accessed 17 September 2020. https://www.criterionafrica.com/.

6 ‘Criterion Africa Partners (CAP)’. n.d. Criterion Africa Partners. Accessed 17 September 2020. https://www.criterionafrica.com/.

7 ‘Criterion Africa Partner - Africa Sustainable Forestry Fund’. 2019. Criterion Africa Partner. https://www.criterionafrica.com/wp-content/uploads/2019/03/Criterion-Africa-Partners-ASFF-Impact-Brochure-1.pdf.

8 Rachel Bass, Peter Murphy, and Hannah Dithrich. 2019. ‘Scaling Impact Investment in Forestry’. Global Impact Investing Network. https://thegiin.org/assets/GIIN_Scalingpercent-20Impactpercent20Investmentpercent20inpercent20Forestry_webfile.pdf.

STAKEHOLDERS:

Criterion; Global Environment Fund; Grantham Foundation

LGIM Climate Impact Pledge

Legal & General Investment Management (LGIM) is one of the largest asset managers in Europe. It has recently renewed and expanded its “Climate Impact Pledge” to catalyse the transition towards net zero carbon emissions globally.⁹

To do so, LGIM published its climate analysis of over 1,000 listed companies from 15 climate critical sectors that are responsible for over 60percent of GHG emissions.

The analysis results in scores, displayed publicly in the form of a traffic light system, determined by the analysis of a company’s governance, strategy, risk & opportunities, scenario analysis (Parisalignment) and metrics and targets.¹⁰

Companies that do not meet LGIM’s minimum standards will be subject to divestment, increasing the pressure on companies to improve their ESG targets.

To further support its scoring approach, LGIM launched the climate risk framework, Destination@ Risk, co-developed with Baringa Partners. Starting from 2021, LGIM will use its Destination@Risk framework to create an internal dashboard for internal portfolio managers and analysts to facilitate the integration of climate risk assessments through LGIM’s entire portfolio.

By releasing company scores, LGIM hopes to support companies to commit to net-zero emissions by 2050. The Climate Impact Pledge seems to already have had an impact: Dominion Energy and Japanese automaker Subaru have taken steps to significantly improve their emissions targets and disclosures.¹¹

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9 ‘ ‘LGIM Increases Pressure on Companies to Address Climate Risk, Holding a Far More Extensive Number of Companies to Account : Legal & General’. 2020. Legal & General PLC. 14 October 2020. /media-centre/press-releases/lgim-increases-pressure-on-companies-to-address-climate-risk-holding-a-far-more-extensive-number-of-companies-to-account/.

10 ‘LGIM’s Climate Impact Pledge: Dashboard - Our Methodology for Rating Companies’. 2020. Legal and General Investment Management. https://climatepledge-lgim.huguenots.co.uk/srp/documents-id/ef9e3a79-309e-4d8f-b7df-20f3539baff9/Methodologyforratingcompanies.pdf.

11 ‘LGIM Increases Pressure on Companies to Address Climate Risk, Holding a Far More Extensive Number of Companies to Account : Legal & General’. 2020. Legal & General PLC. 14 October 2020. /media-centre/press-releases/lgim-increases-pressure-on-companies-to-address-climate-risk-holding-a-far-more-extensive-number-of-companies-to-account/.

STAKEHOLDERS:

LGIM; Baringa Partners

The Lyme Timber Company

The Lyme Timber Company is a private investor that strategically invests in projects with a high conservation potential in the USA and Canada, generating revenues through the production of sustainable timber, recreational leasing, the supply of alternative energy and the production of carbon offset credits.

Lyme Timber’s business model works by monetising a public-private partnership approach called conservation easements, which involves a legally binding contract to conserve private land and prevent future landowners from dividing/developing their property. Conservation easements protect and conserve the land’s resources, keeping land in private hands, while boosting the land’s public benefit and enhancing natural ecosystems.¹²

Over the course of the firm’s history, it has developed five funds: Lyme Northern Forest Fund (2002, $64.5 million); Lyme Forest Fund (LFF) (2006, $190.6 million); LFF II (2010, $160.4 million); LFF III (2014, $250 million); LFF IV (2016, $250 million); LFF V (2018, $300 million).

Lyme’s current overall investment portfolio consists of about 1.5 million acres of land, 85percent of which is forestlands, while the rest is rural real estate. Current portfolio examples are the Lyme Great Lakes Timberland, comprising of 677,000 acres of sustainably managed forestland; Lyme Redwood Timberlands, a 112,000-acre forest parcel along a salmon river which is restored through Lyme’s sustainable forest management; and the Chocolate Bay Mitigation Bank, comprising of 9,500 acres of intercoastal waterway frontage that is held as a conservation and mitigation project.¹³

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12 ‘ ‘Financing Sustainable Land Use: Unlocking Business Opportunities in Sustainable Land Use with Blended Finance’. 2018. Kois Investment, the Business & Sustainable Development Commission and the Blended Finance Taskforce. https://docs.wixstatic.com/ugd/679693_bc261b1e91914e76b14f0cac70344cb9.pdf.

13 ‘Portfolio’. n.d. Lyme Timber. Accessed 18 September 2020. https://www.lymetimber.com/portfolio/.

STAKEHOLDERS:

N/A

L'OREAL FUND FOR NATURE REGENERATION

The L’Oréal Fund for Nature Regeneration is a €50 million impact investing fund set up by L’ Oréal and managed by Mirova Natural Capital, designed to repair natural ecosystems. It complements the company’s efforts to reduce its impact on biodiversity across its value chain by repairing the damage already done.

The fund will invest in projects supporting marine and forest ecosystem restoration, which also have a positive economic impact for people relying on these very ecosystems. Envisioned investments include regenerative agriculture, sustainable fishing, marine ecosystem restoration, eco-tourism and carbon credit projects.

By 2030, the fund aims to help restore one million hectares of degraded ecosystems, capture 15 to 20 million tons of CO2 and create hundreds of job.¹⁴

The fund is part of a larger ESG social-environmental program released in May 2020 by L’Oréal called “L’Oréal for the Future”. This program includes a Product Environmental and Social Labeling mechanism, a €50 million charitable endowment fund to support woman’s organizations and a €100 million impact investment fund. The impact investment fund is equally split into an investment fund dedicated to Nature Restoration, and a fund aimed at preventing climate change by investing in the circular economy.

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14 ‘L’Oréal Announces the Creation of Its Programme L’Oréal for the Future: €150 Million to Support Vulnerable Women and Protect the Environment’. 2020. L’Oréal Finance. 12 May 2020. https://www.loreal-finance.com/eng/news-event/loreal-announces-creation-its-programme-loreal-future-eu150-million-support-vulnerable.

STAKEHOLDERS:

L’Oréal, Mirova Natural Capital

SLM Partners

SLM Partners is an impact investor that acquires and manages rural land in several parts of the world, implementing regenerative agriculture, ecological farming and sustainable forestry systems, delivering both financial returns and environmental benefits.¹⁵

SLM invests in farm and forestry land on behalf of pension funds, family offices and insurance companies. SLM acquires and, with the help of local partners, transforms and manages agricultural and forestry land through its offices in the UK, USA and Australia. Through its investments, it aims to regenerate land, while increasing economic returns for its investors.

SLM raised AU$105 million for their first fund, SLM Australia Livestock Fund (AU$75 million in equity from Danish pension funds and AU$30 million in debt), acquiring over 480,000 hectare grazing land in Australia for sustainable beef production.¹⁶ In 2018, SLM created the SLM Silver Fund, which invests in sustainable forestry in Ireland, transforming existing plantations into “Continuous Cover Forestry” to improve biodiversity as well as making the plantation more disease and windfall resistant.¹⁷ The fund has backing from Irish investors, the European Investment Bank and other European institutional investors.¹⁸ SLM is planning on expanding its ownership of over 12,140 hectares of farmland to scale up regenerative organic farming in the US, specialising in organic grains.¹⁹

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15 ‘ ‘ImpactAssets 50: SLM Partners’. n.d. Impact Assets. http://impactassets.org/ia50_new/fund.php?id=a014400000jQnuBAAS.

16 ‘ ‘Australian Grassfed Beef’. n.d. SLM. https://slmpartners.com/activities/australian-grassfed-beef.

17 ‘Irish Forestry – a Sustainable Irish Forestry Fund’. n.d. SLM. https://slmpartners.com/activities/irish-forestry.

18 ‘Irish Forestry – a Sustainable Irish Forestry Fund’. n.d. SLM. https://slmpartners.com/activities/irish-forestry.

19 ‘US Organic Farmland’. n.d. SLM. https://slmpartners.com/activities/us-organic-farmland.

STAKEHOLDERS:

SLM partners, institutional investors, family offices