Pilot Applications
Transformation in the agrifood sector has the potential to deliver systemic benefits for nature, people and businesses. The TEEBAgriFood for Business project has developed the TEEB Operational Guidelines for Business to support businesses in conducting a capitals assessment. A capitals approach can enable organizations to build resilience, mainstream best practice, protect biodiversity and contribute to a more sustainable food system.
From 2020-2023, Capitals Coalition delivered training sessions, based on the Guidelines, to agrifood businesses in seven project partner countries (Brazil, China, India, Indonesia, Malaysia, Mexico, and Thailand). Participants of the training course were encouraged to conduct a capitals assessment within their business to work towards a pilot application of the Guidelines. These pilot applications showcase the capitals approach and benefits of undertaking a capitals assessment within the agrifood sector.
In addition to participating in the training course, business representatives received support from the TEEBAgrifood Project team and external consultants to progress their pilot applications. The key focus was the provision of support in the process of conducting a capitals assessment.
As the project ends in 2023, the below pilot applications will not be further updated. Many of these businesses will be continuing their efforts, progressing further with their capital assessments and continuing their journey in applying the capitals approach.
The results of the pilot applications have not been verified by Capitals Coalition, nor external consultants.
Summaries of select pilot applications are available below, accompanied by a link to a larger pilot application report.
Brazil
The below contains summaries of pilot applications by businesses that took part in the TEEBAgriFood for Business training in Brazil. The training was provided online in four half-day sessions, taking place from September to December 2020.
Applications
Agronegocios del Plata (ADP) & Bidegaray
The below answers are paraphrased from a longer discussion, which can be accessed in full here.
Business context
ADP is an agribusiness based in Uruguay. They produce both agricultural products and livestock. Bidegaray & Associates specializes in providing its clients with solutions for the evaluation and development of innovation projects, the application of cleaner technologies and energy efficiency. Bidegaray has supported ADP in conducting a case study to support more sustainable meat production.
Assessment
WHY?: What was the objective of the assessment?
Various objectives have been set. Mainly, the objective of the assessment is to promote and communicate more sustainable ways of meat production to differentiate the product and to consider sustainability when making decisions at the product level. This should lead to improved sales,market access and provide ADP with a competitive advantage as well as a leadership position in sustainable food production. The specific benefits anticipated from the assessment are a better margin, better positioning of the brand, improved market access, an improved strategy and a continued leadership position within the current market.
WHAT?: What was the scope of the assessment?
The organizational focus will be on the product level, meat in this case, plus, the seed and grain production as input to the meat production in a second phase. Both impacts and dependencies have been assessed. The value perspective of the business is chosen, their aim is to generate data and provide information to consumers in order to increase transparency.
HOW?: What was measured and valued?
Change in the water quality and quantity, GHGs, soil health and animal welfare are being assessed. Direct measurement is being used whenever it is possible.
WHAT NEXT?: What were the results of the assessment?
The results of this assessment will be communicated in the future, starting with GHG emissions. The team achieved internal approval and support for a three-year project to assess all the values in monetary terms.
Learn more about Agronegocios del Plata here.
Embrapa
The below answers are paraphrased from a longer discussion, which can be accessed in full here.
Business Context
Embrapa is the Brazilian Agricultural Research Corporation, a state-owned research business affiliated with the Brazilian Ministry of Agriculture. In the first phase, a researcher applied the TEEBAgriFood evaluation framework and business guidelines with Nuu Pão de Queijo, a small and medium company. During the second phase, the application of the framework was expanded to the dairy farming chain sector.
The chosen context of the Embrapa case is the Minas Gerais Brazilian Estate, which is responsible for more than 25% of the national production of raw milk; where most of the production is located in the Cerrado biome. In this region, the main soil use is agriculture and grazing and more than 75% of producers in this state are family farmers. The region is also recognized as an Immaterial Heritage of Brazilian Culture with a geographical indication for well-known “cheese minas artisanal”.
Assessment
WHY? What was the objective of the assessment?
The main objective of the assessment is to evaluate the impacts and externalities caused by the dairy farming chain on natural capital, to highlight opportunities to reduce GHG emissions during cheese production.
The assessment’s opportunities identified are to highlight the interconnections and dependencies within the milk value chain system, including an accounting system for input of ecosystem services. The anticipated benefits are to have robust arguments to convince producers about the advantages of adopting soil and water conservation practices while adding value to their local product, opening new markets and gaining consumer trust.
The risks and challenges of the case lie in the availability of large reliable datasets to generate robust information. The target audience is mainly producers and the Brazilian Ministry of Agriculture.
WHAT? What was the scope of the assessment?
The baseline analysis is 2017 Agricultural Census, produced by the Brazilian Institute of Geography and Statistics (IBGE), Map biomas map and the Digital Atlas of Brazilian Pastures. The geographical boundary is the Cerrado Mineiro region.
The research uses both aggraded secondary data and direct measurement at the property scale.
HOW? What was measured and valued?
Embrapa established an input and output model to evaluate impacts and dependencies. On inputs, they consider electricity consumption, national resources use (soil, plants, water), fertilizer, labor, fuel and machines and all nutritive food for cattle herd. On output, they collected information on milk production, waste materials and Green House Gas Emissions. The valuation of these material impacts and dependencies is currently being completed.
Among other indicators, they evaluate the % of degraded pasture in farm land, the loss of soil in tons per hectare per year, and % of carbon stock (sequestration) in the topsoil.
WHAT NEXT? What were the results of the assessment?
The study is under conclusion to include a field verification process and model calibration. The preliminary results show that natural capital is the most negatively impacted by the externalities generated by the milk production process. However, the restoration of degraded pastures in Cerrado Mineiro has the potential to mitigate 5.8 million tons of carbon per year.
A strategy to reverse natural capital degradation is investments in human capital, offering capacity-building opportunities to producers, upskilling and transferring knowledge to them on soil and water conservation.
The assessment also shows the need to integrate the federal, state and municipal governments’ actions to induce programs that promote the adoption of soil and water conservation practices specific to each producer profile.
Learn more about Embrapa here.
Liv Up
The below answers are paraphrased from a longer discussion, which can be accessed in full here.
Business Context
LivUp addresses the time constraints faced by the latest generation through a distinctive food-tech approach. Their focus is on redefining modern eating by offering practical, healthy, and flavourful solutions that connect consumers directly with the farmers that supply their food.
The foundation of LivUp’s success rests on strong partnerships with suppliers and clients, creating a resilient value chain across Brazil. Operating from their headquarters in São Paulo’s Barueri, they supply food to 11 states, emphasizing nationwide accessibility.
LivUp’s ambition is to integrate the entire value chain, uniting diverse elements under a shared brand mission. Sustainability is key, reflected in their sourcing strategies. Going forward, Liv Up aims to reshape the food landscape by moving away from processed norms, aspiring to create a system that benefits both consumers and producers, symbolising a shift towards a conscientious and convenient food culture.
Assessment
WHY? What was the objective of the assessment?
The overarching aim for LivUp’s assessment is to assess the magnitude of their impacts across multiple capitals enabled by their “dedicated planting” model – the short supply chain that connects consumers directly with smallholder organic farmers. In addition, they aim to compare the production processes and impacts of organic vs nonorganic supply chains.
LivUp anticipated that the assessment would provide several benefits, such as the mapping of possible supply chain risks, risk and process management improvement, development of next steps, and a competitive advantage through improved communication of their more streamline value chain. They also aim to strengthen their strategy, improve stakeholders communication, and map out risks and opportunities to generate shared value.
WHAT?: What was the scope of the assessment?
The assessment focuses on the product level, incorporating the full value chain, from cradle-to-gate. It assesses business impacts and impacts on society of LivUp’s “dedicated planting” model through qualitative and quantitative valuation. The baseline for the assessment is the current mostly non-organic practices and the unoptimized supply chain, which lacks transparency and involves many intermediaries between farmer and consumer.
The spatial boundary of the assessment includes all the organic small-holder farms they work with, as well as the Headquarters in Sao Paulo. The expectation is for the assessment to cover around 4 years, with monitoring and evaluation taking place every six months from the baseline assessment in 2020.
HOW?: What was measured and valued?
To design an effective valuation, LivUp began by mapping out potential impacts across multiple capitals, concentrating on two key impact drivers: (1) direct planting and (2) organic agriculture.
LivUp hired a specialised research company to carry out the valuation phase. Their motivation was to better understand the scalability of their organic dedicated planting approach by assessing various quantitative and qualitative components against the 2020 baseline assessment of non-organic, longer supply chains.
The quantitative analysis focused on:
– Assessment of smallholders yields and internal data analysis
– Organic supply guarantee (KGs and %).
– Financial gains (R$) by planting planning with Liv Up (eg. R$ paid per crop in the purchase of ingredients from dedicated planting and other sources).
– The farm productivity rate and production diversification rate.
– The farmer’s quality of life improvement.
– Demographic information (gender, family members, contractors and number of workers overall).
The qualitative analysis focused on:
– Social return of this activity based on surveys and internal data analysis
– Impacts of some of the benefits of dedicated planting (rural credit, purchasing guarantee, socio-financial stability; flexibilization of the vegetables standard).
– Efficiency differences between short chains (Liv Up) and long chains (other distributors).
– Benefits of organic planting (ingredient quality, well-being).
– Socio-financial stability.
– Acquisition of new machinery and farms.
– Indirect community impacts generated by the dedicated plantation.
WHAT NEXT?: What were the results of the assessment?
Liv Up reports that a better understanding and valuation of the impact generated across their food system has been obtained through the assessment. Several practical decisions have been taken that will be implemented to improve their operations further:
– Liv Up’s Sourcing Strategy will be consolidated by prioritizing organic food and direct partnerships.
– Liv Up’s Sustainability and ESG Strategy will be consolidated.
Quantitative and qualitative valuation showed that social capital was generated through direct partnerships. This leads to better communication with investors and consumers about impact and strengthens their rebranding around impact: “Liv Up: Food for those who matter”.
Based on the assessment, more resources to the sustainability department have been allocated to deepen the analysis, including creating a job for ESG management and hiring consultants to collect data.
Learn more about Liv Up here.
To learn more about LivUp’s pilot application and impact, please watch this short video.
Nuu Pão de Queijo & Embrapa
The below answers are paraphrased from a longer discussion, which can be accessed in full here.
Business context
NUU is a production company that depends on farmers. An important product the NUU makes is “pão de queijo, a typical cheese bread. With 100% supply from small rural producers from the Serra do Salitre (Minas Gerais) in Brazil, the company uses a traditional recipe, connecting the countryside and urban consumers.
The company workforce is 90% women, and the owner wants the whole production to be sustainable. As NUU depends on the farmers, there is an intention to start a fund to pay the farmers that agree to start a transition to regenerative livestock production. A factory is also under construction and aims to receive the milk and cheese from the suppliers and produce the “pão de queijo” in a sustainable way.
This assessment has been supported technically by EMBRAPA, the Brazilian Agricultural Research Corporation.
Assessment
WHY?: What was the objective of the assessment?
As NUU is an agribusiness that operates across the whole food system – production, manufacturing, distribution – it is important to understand how the capitals interact along the value chain, assess possible trade-offs and value these in order to take better decisions.
The aim of the assessment is to understand the risks and opportunities of soil management at the farm level to attract funds to support the transition to a sustainable production chain and make the Nuu Pão de Queijo 100% sustainable. The aim is that this will lead to improved stakeholder engagement.
WHAT?: What was the scope of the assessment?
The assessment will focus on the product level, on milk production specifically and its upstream value chain. It will assess the impacts and dependencies of livestock land use through quantitative and if possible monetary valuation. Baseline and scenario interventions are considered for this assessment.
One impact and one dependency pathway are considered as potentially material. The impact pathway that is considered is land use change, leading to land degradation and degraded pastures that lead to a change in land tenure contracts, due to soil degradation, soil erosion, water shortages, habitat and pollination loss.
The dependency pathway that is considered material is that of traditional supplier loss. These suppliers are increasingly dependent on external inputs such fertilizers, pesticides and irrigation for their production, leading to a necessity to find new suppliers and/or start a commercial relationship with the new landowners.
HOW?: What was measured and valued?
Based on the material pathways, the following material issues are being assessed: land use, fertilizer dependency, GHG emissions, and food security. The valuation of these material impacts and dependencies is currently being completed.
WHAT NEXT?: What were the results of the assessment?
The aim is to relay the results of the assessment to the business. Nuu Pão de Queijo started a voluntary carbon compensation, and the idea is to make TEEBAgrifood methodology part of NUU business plan.
In June 2021, the project submitted to “Sustainably rurality Cerrado” has been approved. This multi-stakeholder prize is led by IASB – The Brazilian Institute of Sustainable Development. The project will have additional financial support for data analysis. On the 79 applications, 20 were selected, and only four are led by women, including the NUU case.
Synergies
In June 2021, EMBRAPA organized an online event to promote low carbon initiative in Brazilian agriculture sector and have invited Liv Up as a speaker. The same month, Nuu Pão de Queijo owner presented the case in a webinar on Foodtech opportunities in Brazil.
Learn more about Nuu Pão de Queijo here.
SOESP
The below answers are paraphrased from a longer discussion, which can be accessed in full here.
Case name: “Starting from the ‘bottles’ until the ISO: How TEEB helper SOESP to go greener”
Business Context
SOESP buys tropical forage seeds from production fields and coats them with a mix of products that improves the quality and sells the seeds to more than 20 countries.
SOESP has been committed to providing farmers in Brazil and around the world with pasture seeds. The company has its factory and its office.
Assessment
WHY? What was the objective of the assessment?
The wider aim of the assessment is to measure the impacts of the whole seed production chain, whether caused by the office or by the factory.
However, the team who led the assessment recognized they had more influence over the decisions in the office, so the pilot focused on this business unit.
The ambition of SOESP interdisciplinary sustainability group was to raise awareness and change practices of employees showing their impact on nature.
The anticipated benefits were to have an improved waste management system, reduce waste and have a better discard in daily routine.
The application of this assessment implies comparing two scenarios regarding solid waste and disposal: 1) the first scenario is the baseline business in 2020 2) the second scenario is an improved waste management system.
Next, the results are also used to communicate results internally and externally.
WHAT? What was the scope of the assessment?
In the production process, improper solid waste management (collection, transfer, treatment, recycling, and disposal) is associated with a range of risks, such as the proliferation of diseases, degradation, climate change and negative impact on the well-being of affected people.
To address this, the management of waste materials in the office has been revised. This includes:
– Printed paper being reused, shredded and used as box filling.
– Elimination of plastic cup
– Correct disposal of plastic bottles, cans, caps and other recyclable material
– Replacement of batteries with rechargeable ones.
HOW? What was measured and valued?
The measurement and valuation happened directly on-site through three years of application:
SOESP went from 15.000 paper sheets/month (1,5 Eucalyptus tree), to 7.500 paper sheets/month (less than one tree)
SOESP went from 2500 plastic cups/month to zero, which means 90.000 avoided cups
SOESP discarded correctly 15 drums of 200 liters each of plastic bottles, caps and other plastic material through a recyclable company
Batteries will still be changed to recyclable ones. It will represent 35 fewer batteries every month.
Economics gains from savings related to those usage changes have been collected too.
WHAT NEXT? What were the results of the assessment?
The TEEBAgriFood assessment has been an important step to raise awareness and change employees’ culture and mindset internally. The project helped to create a new sustainability department and a new job for certification.
The main benefit of the assessment to improve decision-making lies in the fact that SOESP is in the process of being certified as an ISO 9001 (quality management system) and ISO 14001 (environmental management system) company, which includes both the office and the factory.
Learn more about SOESP here.
China
The below contains a summary of a pilot application by a business that took part in the TEEBAgriFood for Business training in China. The training was provided online in four half-day sessions, taking place in 2021.
Applications
Shengmu Organic Milk
The below answers are paraphrased from a longer discussion, which can be accessed in full here.
Business Context
Shengmu Organic Milk, the largest organic dairy company in China, produces raw milk in a circular way, integrating planting and cow raising in the Ulan Buh desert. The Company’s business encompasses the entire dairy industry value chain.
Shengmu is on a mission to “revitalize agriculture, strive for excellence, and pursue common development,” with the vision of developing into a top brand in the organic milk industry worldwide.
The company is committed to supporting the Paris Climate Agreement’s goal to limit the temperature increase to 1.5°C above pre-industrial levels. In line with the Convention on Biological Diversity and the Kunming-Montreal Global Biodiversity Framework, they have established science-based carbon targets to address climate change.
As a tangible action since 2009, Shengmu has been dedicated to produce and manage sustainably the Ulan Buh Desert ecosystem.
Assessment
WHY? What was the objective of the assessment?
To externalize benefits, Shengmu has taken the lead in China for multi-capital accounting approaches, with the aim of incorporating comprehensive capital assessment results into business decisions.
The primary objective and application of the assessment is to clearly assess the values provided by Shengmu’s natural capital, human capital and social capital.
The results provide information for corporate strategy, management and operational decisions.
WHAT? What was the scope of the assessment?
The baseline for evaluating the change in various capitals is Shengmu’s situation on December 31, 2019. The temporal boundary of the assessment is through to December 31, 2022. The spatial boundaries include Shengmu headquarters, all subsidiaries, pastures and all production zones in the Ulan Buh desert ecosystem.
The company applied multi-capital accounting to its direct operations to value the costs and benefits of its activities. For the social-capital accounting section, farmers’ and suppliers’ upstream value chain, as well as processors’ and consumers’ downstream value chain have been considered.
The value perspective is both from a business and societal perspective. They used a combination of qualitative, quantitative and monetary data.
Shengmu has assessed the materiality of their impact and dependencies across its value chain, identifying key links between the capitals.
HOW? What was measured and valued?
After identifying priority impact drivers and dependencies, Shengmu measured and valued them either in quantitative or monetary terms. The details of the impact drivers and dependencies, changes in capitals, the indicators, valuation methods, costs/benefits and corresponding results can be found in the longer report. In line with good practice, the company acknowledged where data is unavailable and where analysis is ongoing. Shengmu also documented the sources of the values used in the calculations.
WHAT NEXT? What were the results of the assessment?
The aggregated results of the multi-capital accounting assessment show that Shengmu has increased benefits for nature, employees, and society generating a total benefit of CNY 6.94 billion (approximately €884 million under exchange rate of 1 CNY = 0.1274 EUR). This includes natural capital benefits of CNY 1.00 billion (€127 million), social capital benefits of CNY 5.67 billion (€722 million), and human capital benefits of CNY 0.28 billion (€35 million).
Shengmu discovered opportunities to reduce operational and financial costs, as their environmental governance has paved the way for easier access to green loans. The nature-based production also boosts their revenue as their organic milk sells for a 21.7% higher price than regular milk. They observed that their ecological value is being partially converted into brand value as their brand value increased from CNY 15 to 17 billion in three years.
For the next steps, Shengmu will incorporate both biodiversity and climate management into one system framework to strengthen understanding of the relationship between these two areas. The plan is to share the findings through the release of the report, disclosure and transparent communication with stakeholders.
The multi-capital accounting assessment will be used to attract more sustainable investment as it paves the way to implement actions such as “carbon neutrality”, “gradual mitigation”, “internalizing externalities” and achieving ‘zero net loss of biodiversity”.
Learn more about Shengmu here.
Yunnan Astral ESG Investment CO., Ltd (ASTRAL)
The below answers are paraphrased from a longer discussion, which can be accessed in full here.
Business Context
ASTRAL is an investment company active in agri-food systems. They buy food directly from local farmers and indigenous communities. The company is based in Yunnan, China’s most biodiverse and most ethnically diverse province. Working in this unique landscape context motivated ASTRAL to better understand their impacts and dependencies in areas such as biodiversity preservation and cultural diversity.
In 2021, ASTRAL jointly launched the “International Demonstration Zone for Sustainable Human Settlements with Cultural and Biological Diversity” in Yunnan Province, China, covering an area of 1,350mu (Mu is a unit of area measurement used in China. It corresponds to 1/15 of a hectare, or about 666.67 m2.). The ambition of the demonstration zone places biodiversity and natural capital restoration at its core.
ASTRAL maintains a steadfast commitment to prioritizing species conservation. By 2030, they aim to protect a diverse array of biodiversity in their project site, drawing from their project implementation experience to ensure an effective conservation strategy.
Assessment
WHY? What was the objective of the assessment?
ASTRAL decided to conduct a natural capital assessment to better understand and value their impact on biodiversity and natural capital and to contribute to a more comprehensive account of their ecological assets.
The objective of the assessment is to quantify enhanced natural capital in the Demonstration Zone and prove the value of ASTRAL’s regenerative soil strategy to both investors and consumers. Soil regeneration will help support the transition to low-carbon agriculture, mitigate nature loss and preserve biodiversity, all of which are increasingly important for investors. At the same time, consumers can be educated on the importance of biodiversity, as well as the agricultural techniques and products that do not cause it harm.
WHAT? What was the scope of the assessment?
ASTRAL opted to focus their assessment on the Demonstration Zone project in Yunnan Province, China. An overall long term natural capital assessment will run from 2021 – 2030. An assessment of the initial 3 years has also been undertaken, the results of which are reported in the full pilot application report.
The assessment methodology includes qualitative, quantitative and monetary components, and is based on a 1000mu sample spatial boundary. Results will be collected annually until the end of the project in 2030, when ASTRAL expects to have accounted for natural capital of 60,000mu of farmland.
HOW? What was measured and valued?
The natural capital assessment comprises two core components:
An estimation of the change in natural capital, based on an assessment of improved soil fertility and water availability.
A cost/benefit analysis of the project’s associated impact on agricultural output (productivity) and income to the farmers from sales (revenue).
Results on both components will be collected annually and compared with results from a baseline assessment that was conducted prior to operations.
While the aim is to complete the assessment over a 10 year period, some initial assessment results have been established for the first three years of the project (2021 – 2023) which are provided in the full pilot report.
WHAT NEXT? What were the results of the assessment?
In relation to ASTRAL’s objectives for their natural capital assessment, the key takeaways from the results so far include:
ASTRAL’s soil regeneration strategy produces tangible results to both farm productivity and natural capital condition, and this can be communicated to target further investment.
Natural capital risks and opportunities have a significant impact on the food and agricultural system. The opportunity to invest in soil remediation led to increased benefits for both nature and society. At the same time, the risks associated with global climate change halted progress and are forecasted to worsen.
The destruction of ecosystems brought on by global climate change and associated severe weather events has dealt a huge blow to agriculture. ASTRAL anticipate soil fertility to continue to decline year after year.
Overall, ASTRAL found that the TEEBAgrifood evaluation framework complements ESG investment guidelines and helps identify quality projects that contribute to biodiversity conservation.
ASTRAL plan to share these learnings and conclusions with scientists, farmers, and consumers through exchange meetings on high quality ecological products and project libraries, as well as through product launch.
Learn more about ASTRAL here.
India
The below contains summaries of pilot applications by businesses that took part in the TEEBAgriFood for Business training in India. The training was provided online in four half-day sessions, taking place from April 2021 to February 2022.
Applications
Arvind
The below answers are paraphrased from a longer discussion, which can be accessed in full here.
Business Context
Established in 1931, Arvind Limited is the flagship company of the Lalbhai Group, one of the largest textiles manufacturer and exporter in India. It caters to the pressing needs of quality textiles and continues to be ranked amongst the top suppliers of fabric worldwide. The activities of the organization are directed from the headquarter based in Ahmedabad, Gujarat with its production units spread over Gujarat, Maharashtra and
Karnataka in India and one unit in Ethiopia.
Arvind is involved in the process of making fabrics with cotton as the key raw material accounting for 80% of all products. With altered climate variables such as delayed monsoon, increase in drought and erratic rainfall, as well as increase in growing season length, securing an uninterrupted supply of cotton has become a concern for Arvind.
This dependency on cotton has led Arvind to focus on the sustainability of their cotton supply and reduction of the negative environmental impacts caused during cotton production. Management has strengthened the cotton portfolio by directly sourcing sustainable cotton from farmers who are engaged in practicing Better Cotton Initiative principles (BCI), encompassing practices like integrated crop protection, water stewardship activities, nurturing soil health, enhancement of biodiversity and responsible land use, care for preserving fiber quality, promotion of decent work and effective land management. Likewise due to rising brand and customer awareness, Arvind has been continuously engaged to improve traceability across the value chain.
Assessment
WHY? What was the objective of the assessment?
To improve responsible sourcing and transformation of the cotton production sector towards sustainability, Arvind carried out an assessment to evaluate the human and ecological cost of water use per kg of seed cotton produced under BCI principles and compare this to conventional practices.
Through this assessment they anticipate better understanding regarding some of the capital risks associated with water use, as well as gaining an overview of other possible impacts that could be material in the long term. They also hope to engage with customers to find opportunities of including more sustainable products in their portfolio.
WHAT? What was the scope of the assessment?
Arvind decided to focus their assessment on upstream natural and human capital impacts associated with BCI cotton projects in Gujarat, India. To compare the two sourcing strategies, a baseline of the 2019-2020 cotton season was used and the study was carried out over one year.
An extensive materiality assessment using the criteria of risks and opportunities visible to Arvind (operational, legal and regulatory, financing, reputational and marketing andsocietal) showed 3 key impact drivers related to their objective:
1. Water use
2. Pesticide, herbicide and fertilizer use
3. Salaries and benefits
For the purposes of this assessment, Arvind decided to focus on water use and plan to
carry out valuations for the remaining material impact drivers at a later date.
HOW? What was measured and valued?
Arvind carried out a monetary assessment to measure the economic value of impacts on human health and ecosystem quality per kg of seed cotton production. They started by drawing a pathway showing the impact of their water use on the capitals and the consequence on business and society.
To carry out the valuation of this pathway, Arvind first measured the consequence of their
water use, then went on to value it in monetary terms.
WHAT NEXT? What were the results of the assessment?
The assessment found that the human health cost associated with BCI cotton farming is $0.009 per kilo less than conventional farming. Similarly, in terms of ecosystem quality, the damage intensity of BCI practices is 0.31$/kg lower than conventional cotton farming. This means a 49% reduction in damage to human health & ecosystem quality per kg of seed cotton produced under BCI practices compared to conventional practices.
Based on these results, Arvind was able to conclude that BCI practices have positive environmental and social implications compared to conventional cotton practices. As a business with a large dependency on cotton as a primary raw material, this assessment developed Arvind’s understanding of the significant dependence on ecosystem services as well as previously unrecognized risk to both business & society.
The assessment has provided a more holistic picture of Arvind’s BCI portfolio and a justification for incremental shifts to other sustainable cotton project. Arvind will use the results of this assessment in creating a business case to expand sustainable sourcing, educate various stakeholder and explore options to extend this study to other sustainable cotton portfolios.
In future, Arvind will inculcate capital’s approach into their sourcing strategy, and use the TEEBAgriFood evaluation Framework to explore and deepen their understanding from other impact drivers and dependencies like pesticide use, workforce, soil health, emission & waste reduction, resource circularity point of view
Ecociate and Apollo Tyres Foundation
The below answers are paraphrased from a longer discussion, which can be accessed in full here.
Business Context
Apollo Tyres Limited (ATL) is an Indian company dealing in manufacturing of tyres and other such materials. ATL has formed a dedicated organization named Apollo Tyres Foundation (ATF). ATF works with a community-based organization of women farmers which has around 2000 members, most of whom used to employ unsustainable and synthetic fertilizers in agriculture. ATF created a dedicated program to move these farmers to organic farming. To date, 50 individuals have already made this transition and ATF’s target is to bring more farmers under the net of sustainable agriculture through the means of natural and organic farming.
This assessment was carried out by Ecociate
Assessment
WHY? What is the objective of the assessment?
The objective of the capitals assessment is to demonstrate and communicate the natural, social and human capital value of a program supporting women organic farmers.
There is an awareness of several dependencies such as on soil health and water and impacts on GHG emissions and gender rights, among others. These impacts and dependencies could create societal risks and opportunities for ATF.
WHAT? What is the scope of the assessment?
The assessment could benefit potential buyers of organic produce, including organic brands, e-commerce platforms and end consumers. Another aim is to provide local communities with easier access to organic foods.
The anticipated benefits of this assessment include helping the measurement of the real impact being brought by the project around the four capitals. Further, valuation of quantifiable impact areas may help the program in leveraging the carbon-based financing to scale up the initiative. The assessment may help in communicating the benefits to other farmers in the vicinity to adopt organic farming practices for larger benefits. This may also help the ATF management in taking an informed decision around the scale-up of this initiative.
HOW? What is measured and valued?
The organic farming and market linkage project is focused around promoting organic and regenerative agriculture practices among the women farmers in the project area. The activities conducted so far, have informed the focus on the three impact drivers to value.
These impact drivers are herbicide and pesticide use, soil health, and gender rights.
In terms of herbicide and pesticide usage, the number of sprays was used as an indicator to qualitatively and quantitatively value the impact to society and to business. A reduction of the number of sprays would provide access to safe and chemical free foods to farmers and consumers and reduce cost of cultivation to farmers. The potential of cost of cultivation reduction to farmers would be up to 30%.
Improvement in soil organic carbon levels as a change in capital, has a positive impact on society as healthy soil can sequester a higher amount of CO2, which is a major factor in climate change. The value of this change for the business has not been calculated as of yet.
Gender rights and gender empowerment led to a change of capital in the role of women in decision making and a better income to women farmers. This has had a impact on society, as female farmers have gained the knowledge and skills, thus are better equipped for decision making. Overall, 50 women farmers received 20-30% premium on their produces from organic buyers.
WHAT NEXT? What are the results of the assessment?
The program has a significant impact on both society and environment. The project has helped women farmers in reducing their cost of cultivation while improving the soil health and contributing to other environmental benefits. The families have access to safe, healthy and nutritious foods. The project has significantly reduced the application of synthetic pesticides and fertilizers, which may have led to reduction of GHG emissions. However, the volume of reduction in emissions is still needed to be calculated, while also ensuring fair and equitable share to women farmers. The capitals assessment framework was found to be an important tool in that direction. This has been the first attempt towards documenting the impact, measuring and valuations could be the next step.
Key assumptions and a sensitivity analysis have not been conducted so far. We are planning to use the statistical tools and models to measure the valuation of key intervention and impacts. Once it is done, the findings will be presented to the management and will be used for circulating among the external stakeholders.
The strength of the assessment was that it brought clarity on the indicators, impact drivers and the dependencies. The weakness is the lack of clarity on the valuation measures and mechanism. The learnings and conclusion will be shared with both internal and external stakeholders. This may also be presented in appropriate conferences and workshops to the larger audience
The results from the assessment are encouraging for the mentioned impact driver. These will be integrated into training modules for farmers to encourage them to value the benefits of organic farming, especially around the reduced cost of cultivation and benefits to human health. These results are good to further expand the base of organic farming in the project area.
Go4Fresh
The below answers are paraphrased from a longer discussion, which can be accessed in full here.
Business Context
Founded in 2013, Go4fresh is dedicated to optimizing India’s fresh fruit and vegetable supply chain by linking small-scale farmers with small enterprises, bulk buyers, and institutional customers. This operational model enables marginal farming communities to access the market while offering customers safe and healthy produce at affordable prices.
Go4fresh has evolved into a robust digital marketplace, bridging the gap between farmers and microenterprises. It aims to address the persistent issues of access, efficiency, and curbing wastage. With AgTech currently only meeting 1% of its potential, Go4fresh believe that the sector is at an inflection point, where digital intervention, regulatory support & behavioural changes will coalesce to create significant value. Through their digital marketplace, the company aims to drive this transformation by facilitating the transition of one million small enterprises and farmers into sustainable livelihoods, thereby fostering a secure food ecosystem.
Go4fresh has also developed Environmental, Social, and Governance (ESG) metrics to support environmentally friendly decisions, socially responsible actions & incentivize sustainable practices. Looking forward, it envisions comprehensive coverage across India’s key fresh produce clusters, potentially seeking to curb 1 million tonnes of carbon emissions.
Assessment
WHY? What was the objective of the assessment?
Planning to scale up their business model across the Indian market and to expand globally, Go4fresh conducted a capitals assessment to effectively communicate the uniqueness and potential positive impact of its business model on nature and people to small farmers and potential investors.
The specific objectives of the assessment included:
– To demonstrate the benefits of adopting sustainable farming and food safety practices to small farmers and small enterprises.
– To effectively communicate uniqueness and positive impact of Go4fresh model on nature and the livelihoods of marginal communities.
– To assess the benefits of Go4fresh program and how that will build market visibility to social impact funds, investors and research organisations.
– To assist Go4fresh in faster business ramp-up across India followed by other developing countries in Asia and Africa.
Go4fresh also identified associated benefits from conducting the assessment. It anticipates that the creation of a dashboard to assess risks and opportunities will improve business results in the long-term, and that the assessment results will help to improve small farmer and small micro enterprises engagement and facilitate collaboration opportunities with technical and research institutions, social organisations & the wider technology community.
WHAT? What was the scope of the assessment?
Go4Fresh designed an ambitious multi-capitals assessment across the entire value chain, including all capitals with impacts and/or dependencies linked to different stages of their business activities from farm to fork.
Faced by the lack of secondary data availability in the Indian agriculture sector, Go4Fresh opted to base their assessment on their own internal performance data on impact and financial parameters. In addition to their existing historical records, a survey of stakeholders active on the platform in the last 2 years was performed to gauge the impact of the company’s two key interventions: (1) training in sustainable farming/ Good Agricultural Practices and (2) integrating marginal farmers into the market by facilitating access to information, buyers and transactions.
Starting from a list of identified impact drivers applicable to the scope of the assessment, a materiality assessment resulted in the selection of food loss or waste, livelihood improvement and use of chemical inputs as most aligned with their objective. Impact pathways were then mapped to understand how these affect changes in capitals and lead to impacts on the business and society.
HOW? What was measured and valued?
Food loss and waste
– To measure this impact driver, Go4fresh conducted primary research with focused groups in the state of Maharashtra. The research focused on 3 crops – Tomato, Okra & Green Chili –and involved 50 farmers. The research aimed to collect data from the last two years on both farm level food wastage and supply chain wastage.
Livelihood improvements of marginal communities
– Go4fresh drew upon their internal data and conducted farm focus groups the Pune district of Maharashtra to collect on farm level and post-harvest supply chain intervention across 100+ acres primarily related to use of natural resources; production costs and revenue/income.
Use of chemical inputs
– Go4fresh undertook a farmer survey and compared conventionally managed farms vs farms supported by Go4fresh in same catchment and for the same season to assess:
Toxic substances in the produce (checked through chemical analysis of produce via third part laboratory)
Toxic exposure at farm level (checking extent of farm inputs used, share of toxic chemicals and method of application)
WHAT NEXT? What were the results of the assessment?
The assessment gathered supporting evidence for the benefits of Go4fresh business models with regard to the selected impacts.
In relation to the food loss and waste impact driver, Go4fresh found a 10.5% decrease in food loss (6.4% at farm level and 4.1% at a farm-to-enterprise level) comparing their business model impact to historical data. From the livelihood improvement pathway, they found an 18.7% reduction in cost of production and a 7.5% increase in income levels.
Finally, in terms of the use of chemicals impact driver, Go4fresh was not able to conduct the laboratory analysis of toxic substances in their produce as planned. They instead analysed production costs from chemical inputs, finding a 14.4% reduction in costs.
As a result of assessing livelihood improvement, the business will keep developing their market access program for farmers. Furthermore, the findings of the capitals assessment will be translated into infographics to easily communicate to a wide variety of internal and external stakeholders.
The outcomes of the assessment are integrated into the Go4fresh core business strategy, with identified indicators included in regular business planning, budgeting, and monitoring processes. The results are envisioned to support the design of an internal management dashboard, to assess and improve business results, to improve smallholder farmer and small enterprises engagement, and to facilitate collaboration opportunities with research institutions and social organizations.
Overall, Go4fresh used the results of the assessments to refine their strategic and business objectives, setting the following action items and next steps:
1. Minimize risks, prioritize operational plans, and allocate resources optimally.
2. Identify tools to share and accelerate learnings for marginal communities.
3. Set up internal dashboard to track performance on capitals assessment.
4. Prepare and implement effective communication plan for target audience.
Learn more about Go4Fresh here.
Olam Agri (India)
Business Context
The Olam Group is a leading food and agri-business, supplying food ingredients, feed and fibre to thousands of customers worldwide, from world famous brands to small family run businesses. The Olam Group is headquartered and listed in Singapore.
As a member of the Sustainable Rice Platform (SRP), Olam is committed to mitigating the impact of rice farming on climate change and ecosystems by training rice farmers on the sustainable technique of Alternate Wetting and Drying (AWD)1. In 2020, Olam piloted the AWD training programme with 300 rice farmers in Haryana, India.
This summary focuses on the results of the assessment results of India mostly. For the full report click here.
Assessment
WHY? What was the objective of the assessment?
Olam applied natural capital accounting to assess the effectiveness of sustainable farming methods, comparing it to traditional farming methods. The results were used to communicate their impacts internally and externally and support funding of sustainable development projects.
Hence, the objective of the assessment was to compare the estimated NC value of methane emissions and water withdrawal between rice farms that implemented AWD and those that use the traditional rice farming method of continuous flooding.
WHAT? What was the scope of the assessment?
The assessment focused on direct farming operations, including 300 farmers in Fatehabad trained on the technique of AWD as part of the 2020 SRP training.
Material impacts assessed were water use and Greenhouse gas (GHG) emissions, looking at impacts on society.
HOW? What was measured and valued?
Olam Agri carried out a monetary assessment using internal data.
The material impact drivers water use and GHG emissions were measured using the indicators Volume of water used (m3) and GHG emissions (tCO2e). The monetary valuation approaches applied were the Shadow price of Water and Social Cost of carbon (SCC).
WHAT NEXT? What were the results of the assessment?
The annual value of NC impacts associated with methane emissions and water withdrawal were estimated to be reduced by 48% and 18% per tonne of rice respectively. In total, the farms implementing AWD are estimated to have decreased their NC impacts by 335 tCO2e of methane emissions and approximately 300,000 m3 of water with an estimated social value of approximately US$ 800,000.
Olam Agri plans to scale up the AWD training programme to 1,000 farmers by 2023.
Furthermore, the results of the assessments were used to engage stakeholders, inform decisions and secure funds.
Natural Capital valuation assumptions and notes
Carbon emissions: We have applied a Social Cost of Carbon (SCC) of US$90/tCO2e to value the costs to society of climate change impacts due to GHG emissions, measured by a global GDP reduction. They have used the mid-point of the SCC recommended by Massachusetts Institute of Technology (Pindyck, R S., 2019, The social cost of carbon revisited).
Water use: The shadow price of water , which accounts for the value of ‘services’ provided by water to human health, ecosystems, agriculture and domestic supply, is calculated to be US$2.52/m3 for Haryana. They have used the shadow water pricing methodology from the Corporate Bonds Water Credit Risk Tool developed by GIZ/NCD/VfU (2015).
The valuation excludes rainwater as the rainwater anomaly was above the normal range in India in 2020. Olam will continue to update its water use methodology as more appropriate data become available. Rainfall anomaly is the ratio between rainfall for the current year and the long-term average rainfall in the region, expressed in percentage terms. Values between 90% and 110% are considered as being within the range of normal variability, according to World Food Programme’s Vulnerability Analysis and Mapping (VAM). In India, the rainfall anomaly was above 110% in 2020.
Disclaimer
Olam’s Natural Capital accounting analyses are not related to financial results or financial reporting. The analyses and insights are specific to the selected
operations and are based on the use of environmental economic estimates of non-monetary ecosystems, goods and services; they should not be used outside the context of their analyses. All underlying methodologies are based
on well-established databases and frameworks. However, as they depend on third-party expert studies, all values are indicative estimations and are provided as ballpark estimates to inform debate in relation to the management and mitigation of natural capital impacts. There are limitations with respect to some of the methods used. Results from the NC valuation analyses may be readjusted according to further methodological refinements.
Learn more about Olam Agri here.
Indonesia
The below contains a summary of a pilot application by a business that took part in the TEEBAgriFood for Business training in Indonesia. The training was provided online in five half-day sessions, taking place from June 2021 to January 2022.
Applications
Binatani Sejahtera (Foundation)
The below answers are paraphrased from a longer discussion, which can be accessed in full here.
Business Context
The Binatani Sejahtera Foundation is the Corporate Social Responsibility arm of PT East West Seed Indonesia, a major seed company committed to farmers’ wellbeing.
Binatani operates in the social and humanitarian field, specifically to support small farmers’ livelihood and aims to create shared prosperity. Through knowledge and technology transfer, Binatani seeks to improve producers’ capacities and agricultural productivity. Specifically, the foundation targets vulnerable populations with limited access to technical assistance. In addition, Binatani pursues environmental stewardship by conveying sustainable natural resource management.
Where it operates, Binatani observes rising risks linked to natural capital. Farmers face significant water scarcity challenges, i.e. during the dry season, the lack of water limits irrigation. This has led to conflicts where landowners compete to use rivers, groundwater, and springs’ water.
In contrast, farmers face rising levels of pests and crop disease during the rainy season along with extreme climate events like cyclones. Both situations of water shortage and water excess are negatively reflected in farms’ productivity during sensitive periods. Production interruption is sometimes coupled with supply chain disruption, where unstable market demand enhances the vulnerability of some farmers.
Conscious of those challenges, the foundation committed to developing The Agriculture Livelihood Project, a two-year project starting in October 2021 funded by William and Lily Foundation. The project aims to improve decent agricultural livelihood for diverse farmers’ groups. Established under an ‘’integrated approach umbrella’’ the project partners with universities, financial institutions, NGO and local authorities among others. The core activities consist of training trainers, farmers, and students on best agricultural practices. Among other thematic, training revolves around the use and storage of seeds, creation of plant nurseries, preparation of balance and fertilizer organic fertilizer with composting, pest and disease control, harvest and post-harvest management, financial market access and farmers’ safety.
Assessment
WHY? What was the objective of the assessment?
By enhancing farmers’ skills, Binatani understood that they had created a positive impact relating to social and human capital, but didn’t know how to estimate it. To gain insights and to better communicate the progress of The Agricultural Livelihood project; Bina Tani decided to assess the impacts of knowledge transfer to farmers with the final aim of improving their livelihood. The underlying objectives are to:
– increase farmers’ income, thus guarantying continuous and improved agricultural productivity throughout the year
– teach farmers skills to enable them to run successful small businesses
– ensure a stable supply chain to match market demand throughout the year
Envisioning virtuous cycles of positive impacts, Binatani expected that, with the capitals assessment, the project could be prolonged by the funders.
At the same time, they envision that smallholder farmers can better meet vegetable market demands thanks to the new skills and knowledge acquired. Therefore, family farmers can flourish, and this prosperity would be positively reflected in the sales of seeds from PT West Seed Indonesia.
WHAT? What was the scope of the assessment?
Binatani chose to scope their assessment around the horticulture sector in Southwest Sumba, East Nusa Tenggara region. As the application seeks to assess impacts on stakeholders, the foundation limited the study to 48 farmers’ groups and beneficiaries of the project-approximately 350 farmers and their family members.
As a baseline, they opted to take reference to the situation at the beginning of the project in October 2021. As the first output of the assessment, Binatani produced the ‘Baseline study report’ and a theory of change. They led focus group discussions and produced in-depth surveys in close collaboration with farmers, leaders of the associations, representatives from agrifood companies, representatives from financial institutions and extension agricultural officer (public support) involved in the supply chain. The study is to be conducted over a two-year period, corresponding to the project’s closure in September 2023. An assessment took place halfway through the period, in September 2022, which enable the collection of some preliminary data.
After running a materiality assessment with close partners; the following five impacts have been selected to be measured and valued:
– Productivity
– Knowledge and skill of agriculture cultivation and entrepreneurship
– Financial access
– Supply chain security and market access
– Stakeholders supporting
HOW? What was measured and valued?
To carry out the measurement and valuation phase, Binatani elaborated on five impact pathways aligned with the TEEBAgriFood for Business Guidelines. They have used the following three-step approach:
1) Ensuring the impact drivers correspond to the activities proposed
2) To focus on change in human, social, and produced capitals
3) To estimate the consequences on wellbeing, income, nutrition and trust levels from a societal perspective
Over the first year period, Binatani held numerous training sessions for farmers and extension agricultural officers, who act as free counselors to farmers. Binatani was able to gather qualitative, quantitative and monetary data through interviews, surveys, and market analysis.
They evaluated the knowledge transfer regarding fertilizers uses, disease management, seeds selections, production diversification, etc. They then mapped farmers’ production, identified crops and crop prices, estimated productivity per 100 square meters, and finally determined monthly farmers’ incomes.
Due to qualitative information collected from ten farmers and officers, Bina Tani are seeing farmers’ satisfaction with the project’s outcomes. They have observed higher crop diversity and a higher production level for highly demanded products such as tomatoes and chili. Due to better planning in production, income stability is also being enhanced through the year.
Binatani are able to measure a preliminary impact on the nutrition of consumers, farmer’s children and the community they serve. In the past, malnutrition has been observed in the Sumba Island region as farmers have not been focused on recommended daily intakes and children’s nutrition. By working closely with a voluntary health program, locally trained nutritionists from the public sector, Binatani observed that children’s daily intakes have improved due to a more diversified production and a decrease in malnutrition rates where they operate.
WHAT NEXT? What were the results of the assessment?
Binatani will continue gathering data until September 2023, so they will be able to measure the change in capitals compared to the baseline report from September 2021. As immediate output, they plan to publish testimonies from farmers to disclose information and communicate findings to stakeholders.
Based on the final project results, the foundation expects to generate evidence of The Agricultural Livelihood Project positive outcomes for human, social, and produced capitals. They hope the assessments’ findings will help communicate to donors the effectiveness of the project and possibly extend the project’s scope.
Learn more about Binatani Sejahtera here.
Candra Naya Lestari
The below answers are paraphrased from a longer discussion, which can be accessed in full here.
Business Context
Farm to fashion – reindustrialization of agriculture waste to biodegradable apparel
ASYX is a supply-chain integration firm specialized in agroindustry that works across producers, marketers, and retailers within Indonesia, Singapore, Kenya and Hong Kong. Through integrated and digitized supply-chain processes, the company shapes best practices such as circular economy and sustainable business procurement strategies.
In 2020, ASYX started to incubate natural fibres production through its sister company PT Candra Naya Lestari (a venture building investment company), working closely with communities in Java as well as peatland communities in Sumatra and Kalimantan. The initiative reuses otherwise wasted pineapple leaves and turns them into biodegradable fibres for yarns and household items. They mapped the pineapple value chain and observed the opportunity to create new markets for pineapple leaf fibres to supply the apparel industry. In 2023, Candra Naya Lestari is a stand alone business within PT AGRINDO group. The capital assessment is therefore now a legacy within AGRINDO and Candra Naya Lestari.
Assessment
WHY? What is the objective of the assessment?
They opted to conduct a TEEB-Agri multi-capitals assessment to gain clarity on the pineapple leaf fibre value chain and to better understand the positive impacts for nature, people, and the economy. By communicating the value of these benefits, the community-based business can secure more investment and further expand its production, creating a feedback loop that further increases its positive impact.
They also hoped to find out whether the processing of pineapple waste into textile raw material could provide new economic opportunities to the local community. By providing additional value from an otherwise wasted product, they saw the business as an opportunity to not just generate added revenue, but also upskill people in the local community through the creation of formal jobs for youth and women. Moreover, with the fast growth of the circular fashion industry, they were confident that the business could become a part of the sustainable fashion value chain.
The results of the assessment will be used to build interest from other farmers in the local community as well as the local government. This support will help the business to expand by securing more sources of organic fibre waste and developing favourable relations with local authorities.
WHAT? What is the scope of the assessment?
The company set out to conduct a multi-capitals assessment across all four capitals. Their focus was on the direct operations of CNY ALFIBER, the pineapple leaf fibre producer in Subang, West Java. They aimed to assess the value of its positive impacts on society across a 1-year period from June 2021 – 31 July 2022.
To develop the scope of the assessment, CNY ALFIBER maped the dependencies and impacts of their business activities (production, processing and trading of pineapple leaf fibre).
From this, they were able to identify and select their most material impact drivers for the assessment:
1. Impact: Job creation (for men & women) and increased incomes
2. Impact: Access to finance
3. Impact: Reduction of waste and pests
4. Dependency: Workforce availability
The assessment compared the baseline of before the ASYX collaboration in 2020 with the situation 1 year after the engagement in 2021. By comparing these two scenarios, they set out to understand the diverse benefits to society across the capitals.
HOW? What will be measured and valued?
The pilot report shows more detail about the impact pathways they chose to measure and value.
WHAT NEXT? What were the results of the assessment?
The insights and recognition the multi-capitals assessment generated around its broad sustainability benefits has helped Candra Naya Lestari scale up and grow its fibre production significantly. It has since become an independent business unit with its own investments and infrastructure as a subsidiary of AGRINDO group.
Key contributions have been made in job security, gender empowerment, water use efficiency, and an increase in revenue.
AGRINDO are using the results from the assessment – including just the qualitative descriptions of the positive consequences/impacts – to improve their communication with buyers and investors from the fashion industry to further the expansion of a more sustainable natural material supply chain. From a by-product, AGRINDO and Candra Naya Lestari generates shared value, prosperity, and well-being for different stakeholders.
Learn more about Candra Naya Lestari here.
Great Giant Foods
The below answers are paraphrased from a longer discussion, which can be accessed in full here.
Business Context
Great Giant Foods (GGF) is an integrated group of companies in the agriculture and food sectors owned by the Gunung Sewu Group business group. GGF is a brand entity in fresh fruit products, processed fruit, plant-based, and protein-based product categories, which are marketed under several trademarks. One of its entities, PT Great Giant Pineapple, was founded in 1979 and focuses on pineapple plantations and the pineapple fruit processing industry. It is currently the largest private integrated can pineapple plantation in the world, with a market share of 20-25%. Most of its agricultural and food products are produced on 32,000 hectares of land in Lampung, South Sumatra, and East Java.
GGF has incorporated several circular economy and zero waste practices into its operations, including liquid and solid waste management. GGF’s commitment to implementing ‘zero waste production’ in the value chain is realized through operational excellence. The operations of each GGF business unit are carried out based on a sustainable integrated farming model that applies the three main principles of a circular economy, namely minimizing waste, maintaining the optimal use of products and materials, and regenerating natural systems. The waste reduction strategy is hierarchized with first reduce, reuse, donate food and compost as last option. GGF’s business model prioritizes the utilization of waste and leftover materials for production to be reused and processed into value-added products. The resulting waste will not become waste but input for further industrial processes within the GGF circular economy ecosystem.
Assessment
WHY? What was the objective of the assessment
This assessment objective is to minimize the loss value from food loss that goes to landfill. Therefore it aims to generate positive impact from reusing by-products and conducting upcycling processes to create value for the business’s value-chain and for the communities.This capital approach provides a fundamental framework for implementing business operation excellence to minimize environmental impact, especially from the waste GGF has. Business dependence and business risk can gradually decrease by applying a circular economy model in our business ecosystem, which includes natural, social, and economic aspects. With the business growing every year, we ensure that every risk that arises can be converted into new opportunities. It allows us to create new sources of revenue, reduce operation costs and strengthen the company’s competitive advantage while providing benefits to our partners, community, and consumers.
WHAT? What was the scope of the assessment
The scope of this capital assessment is carried out in all integrated Great Giant Foods business unit operations in Central Lampung Regency, Indonesia. Business units include:
Plantations and processed fruit manufacture,
Tapioca industries,
Bromelain enzyme industries,
Dairy industries,
Others supporting division
This capital valuation approach focuses on projects the company has implemented and maintained by identifying the value chain from upstream to downstream. The measured impact of the project is the creation of new value for the business world, society, and related stakeholders in qualitative, quantitative and monetary terms. In this assessment, the company re-identified the impacts and opportunities of waste management starting with the baseline of 2021 practices, although several significant initiatives have been created since the company was founded in 1979. The time horizon to complete the assessment and best practices is 2030.
Many impacts drivers and dependencies were identified as potentially relevant (water, energy, knowledge, worker’s health, soil use, GHG emission, etc), but after conducting a materiality assessment, food loss and waste circularity were chosen as the most material ones.
HOW? What was measured and valued
They measure the level of value creation from each business model based on a circular economy principle. In this regard, they identify the opportunities and impacts of the integrated business unit value chain. The dominant impacts caused are by-products from fruit processing (canned pineapple production) while food loss and waste comes from fresh fruits production (pineapple, banana, and guava) and dairy production. Therefore, the waste used in the assessment categorized as food and non-food waste. Waste management is carried out by analyzing the usability of food and non-food waste in a closed-loop system. Internally, these waste can be reused to provide benefits regarding raw material substitution, cost savings or other utilization alternatives that offer a competitive difference. They further identified the sources and causes of losses and waste and devised a reduction strategy for any commodities produced in GGF. The strategy consist of upcycle, reduce, and reuse before the waste arrive to be used as compost. Externally, the efforts made have a valuable impact on the community or partners in terms of increasing welfare and strengthening the economy by creating shared values and nourishing health through donations of nutritious fruits.
Practically, the metrics used to analyze were the loss value (in Indonesia Rupiah) of unallocated food (the value of food loss and waste that ends up in landfill) and the cost generated (in Indonesian Rupiah) from non-food waste utilization. The non-food waste measurement comes from the amount of absorbed waste use for alternative purpose or upcycling process to new product/raw material.
During the assessment period, GGF has innovated with a green practice approach. Measurement, monitoring, and evaluation of the value creation resulting from the value chain is carried out regularly. They mapped the types of waste and identified the opportunities for innovation that could be generated. Opportunities are assessed by conducting a preliminary analysis, study cost-benefit analysis and field trials. Partnership schemes with the community are also a consideration to have a bigger impact.
WHAT NEXT? What were the results of the assessment
The assessment results show that the impact of implementing a circular economy in the Company has been achieved by using the capital approach. In terms of waste reduction, Great Giant Foods has strived to reduce pollution by utilizing solid and liquid waste of canned pineapple, cassava waste, and manure resulting from production activities. Manure produced from cattle farms provides benefits to generate cost savings in compost raw material source, which is then used to nurture the soil of fruit plantations. The initiative against food loss has also significantly reduced waste disposed of in landfills by utilizing it for alternative purposes through an upcycling process. On the external side, the circular economy system has a real impact on increasing community well-being through empowerment and partnerships. They also contribute to carrying out nutrition interventions for children with nutritious products and influence the growth and development of the children being observed. With the ongoing integrated business activities, they have also provided employment opportunities for around 30,000 employees, which can indirectly reduce economic inequality and accelerate economic growth in their areas.
In the future, they will continue to innovate to create new opportunities from each value chain, such as pineapple fiber derived from pineapple leaves and thermoplastic production extracted from bromelain enzyme waste and banana fruit loss. Governance, technology, and resource allocation are challenges to continue providing sustainability as the business grows. The support from all stakeholders is critical to provide more comprehensive benefits from the circular economy model.
Learn more about Great Giant Foods here.
Mexico
The below contains summaries of pilot applications by businesses that took part in the TEEBAgriFood for Business training in Mexico. The training was provided online in four half-day sessions, taking place from September to December 2020.
The Capitals Coalition hub in Mexico is providing support to Mexican AgriFood businesses to support the continuation and implementation of the assessments and their results. Visit here to read more about the integration of biodiversity for more sustainable business practice in Mexico.
For more information visit here (in Spanish).
Applications
Aires de Campo
The below answers are paraphrased from a longer discussion, which can be accessed in full here.
Business Context
Founded in 2001, Aires de Campo is a Mexican agriculture company that engages in the commercialization of organic products. They are committed to sustainability, and while their focus to date has mainly been environmental, they are now looking to expand their efforts and achieve the same success in economic and social sustainability.
In terms of economic sustainability, Aires de Campo are aiming to counter the notable disparity that exists between small-scale and large-scale farmers in Mexico. Aires de Campo are also dedicated to progressing on various dimensions of social sustainability. The company generates more than 8,900 agricultural jobs and is committed to gender equality and female empowerment.
However, the company struggles to find and keep hold of qualified staff and are therefore striving to cultivate a more nurturing work environment. A key strategy in this regard is to improve staff training so that a culture of quality and safety can be implemented across the business.
Assessment
WHY? What was the objective of the assessment?
Aires de Campo’s main motivation for conducting a capitals assessment was to gain a better understanding of their social capital. Being a leader in the organic produce market, their natural capital is already well measured to ensure certification of all products. They saw the capitals assessment as an opportunity to ensure the other capitals, particularly human and social, are equally well measured.
The objective is therefore to obtain better and more accurate information on the beneficial impacts of organic agriculture both to individuals (human capital) and to society as a whole (both human and social capital). The business application is to leverage this information to improve communication with customers on the benefits of consuming organic. With these results, Aires de Campo are seeking to position themselves as a flagship company in the organic sector, and to generate more demand for their products.
WHAT? What was the scope of the assessment?
Aires de Campo’s assessment was based on a sustainability survey sent out to all their suppliers. The survey is sent out annually and since it currently focuses only on natural capital, it was updated to collect social and human capital information. It was designed to obtain both quantitative and qualitative data, with the intention to use the results for sustainability reporting.
The value chain boundary of the assessment includes both internal and external stakeholders – Aires de Campo staff and the up-stream suppliers. The target audience of the results was clients (restaurants, hotels, supermarkets, and consumers). The survey was shared with the suppliers at the beginning of 2021 and the company aimed to analyse and communicate the results in May of the same year.
Based on a thorough materiality assessment, Aires de Campo opted to focus on three key impact drivers: (1) training provided to staff and suppliers on organic practices, quality and food safety; (2) improved visibility and marketing; (3) jobs created in rural communities. The impact pathways the company mapped are presented in the table in the full report, showing the changes in capital as well as both the associated business benefits and societal benefits.
HOW? What was measured and valued?
Various methods were employed by Aires de Campo to assess the three impact pathways. Indicators were outlined for each impact driver, methods selected to measure the change in capitals, and valuation techniques chosen to understand the impacts to business / society. In the table in the full report, a synopsis of the approach is provided.
WHAT NEXT? What were the results of the assessment?
Through the consultation of internal and external stakeholders, Aires de Campo was able to collect relevant and useful information to inform their capitals assessment. However, in terms of the first impact pathway, they were only able to draw upon evidence from scientific articles and although they obtained useful information, they expressed that the results would be more meaningful if they had been able to analyse direct data.
The results from the second and third impact pathways are more accurate since the information was obtained directly from the suppliers through the sustainability survey. Communicating the benefits of the products to the consumer yields multiple benefits to individuals and society. First, it may increase demand for organic products, initiating a positive feedback loop, because this in turn creates the need for more agricultural jobs. The additional demand could also enable the expansion of the product catalogue, which translates into new jobs and economic opportunities among farming communities.
Furthermore, consumers are educated in conscious consumption, and gain greater understanding that their consumption choices have direct impacts on personal, social and planetary health. The company are also hopeful that sharing the results of this evaluation will encourage other local companies and even the National Council for Organic Production to use the multi-capitals assessment framework.
With the results from the assessment, Aires de Campo implemented new structures and programs informed by those directly involved and/or affected. They introduced a sustainability training program to sensitise staff and customers, improved working conditions in their production centres, and restructured internal departments to create multidisciplinary teams. Furthermore, the business used the outcomes of the assessment to successfully support their application to become B Corp certified.
The next step is to extend the valuation to produced capital to complement the analysis conducted so far. After this, they plan to compile results from the multi-capitals assessment and conduct a life cycle analysis of their products. They also plan to generate actions to further promote the empowerment of women and gender equity. Finally, the results will inform the company’s new communication strategy.
Learn more about Aires de Campo here.
APEAM
Business Context
APEAM is a Mexican civil association of avocado growers, packers and exporters. The association is the largest representative in Mexico for the export of avocados and aims to offer top-quality products in terms of flavor, safety, and traceability. Their goal is for all products to be produced efficiently and sustainably, so providing financial benefits to associates and the communities in which they operate, live and work.
As the conventional way of avocado production may cause permanent destruction of the ecosystem in the long run, APEAM seeks to evaluate how they can improve and change cultivation practices towards a sustainable future for both business and society.
Assessment
WHY? What was the objective of the assessment?
In order to develop a strategy and targets towards regenerative agriculture, the board of directors first needed an evaluation of the conservation state of forests, biodiversity, water, and soils and to gain a deeper understanding of a best “agricultural practices” scenario for avocado production in Mexico. The envisioned business application was to assess risks and opportunities and impacts on stakeholders.
WHAT? What was the scope of the assessment?
The objective of this pilot application was to assess environmental and social impacts in order to shift production practices, evaluate packaging and exporting methods, and to fulfil environmental requirements of international markets.
The capitals assessed were natural and human capital. The organizational focus is on the project level, focusing on direct operations. Both the value perspective of business and society were assessed. Impacts and dependencies were both considered.
HOW? What was measured and valued?
The impact drivers and dependencies prioritized in relation to the objective were biodiversity, land and soil, fresh water, employment, and renumeration.
WHAT NEXT? What were the results of the assessment?
Results were found in the following aspects:
Positive impact on water quality in the aquifers of the avocado zone, with no water pollution due to responsible agrochemical use in the avocado belt
The corporate social strategy study indicates a poverty reduction in the zone, as permanent jobs are handed out to young people working in the orchard and packing rooms.
The results of the valuation were integrated into the association’s “Green Agenda” technical report, establishing a baseline and informing the environmental and social strategy of APEAM.
By implementing the assessment, the association gained robust information on the benefits of establishing forest reserves in the region of both business and society. The assessment concluded that these should be financed by avocado growers in order to preserve ecosystem services. APEAM started to pilot this after the assessment was finalized.
The assessment furthermore led to the creation of standards for water use and soil conservation. To implement conservation efforts, while also improving worker’s health, training and capacity building on the agrochemicals was provided.
The results of the assessment motivated APEAM to introduce more strategies to improve worker’s living conditions.
With a new way forward, APEAM has integrated best agricultural practices into their operations and has applied to gain the sustainable avocado certificate issued by the federal government. Furthermore, the association has become a strategic partner of the government to jointly develop a national norm for sustainable avocado production. Following the assessment results, APEAM is also collaborating with the Mexican bank Banorte to further develop strategies for the financing of sustainable avocado production.
Learn more about APEAM here.
Watch a video case study on APEAM here.
For more information on APEAM visit here. (in Spanish)
BANORTE
The below answers are paraphrased from a longer discussion, which can be accessed in full here.
Business Context
Banorte is the second largest financial group in Mexico. It offers a range of products and services through its brokerage firm, pension and insurance companies, investment funds, savings and pensions account, and business & personal lending. It is the number one provider of loans to governments and ranks second for mortgage loans. In 2019, it secured a net profit of $36,528 million pesos (2.1 billion USD). Beyond its core portfolio, Banorte also finances agribusiness companies, dedicating 18% of its business activities to the sector.
The group is actively working to enhance its funding of sustainable activities. It currently offers $10,919,884 in green bonds, and since 2012, has managed the social and environmental risks of its financing portfolio. For example, through its Social and Environmental Risk Management System (SEMS), it identified a wide range of environmental and social impacts generated by the agricultural sector. To strengthen decision making, Banorte is exploring methodologies to quantify the financial implications of risks and opportunities and costs and benefits in value chains linked to its portfolio.
Assessment
WHY? What was the objective of the assessment?
Banorte applied a capitals assessment to quantify risks derived from exposure to natural, human, social, and produced capital risks in their financial portfolio for avocado cultivation. By doing so, the bank aimed to identify and quantify the financial risks to which the sector is exposed, derived from the most relevant impacts it generates on the capitals.
Through the assessment, the company hopes to minimize financial risks derived from exposure to environmental and social risks. It plans to use the results to target specific sub-sectors for training on key sustainability practices, and to generate greater involvement among its clients.
WHAT? What was the scope of the assessment?
Having opted to focus on avocado cultivation from its wider agribusiness portfolio, Banorte assessed the significant impacts associated with producing avocados.
The company consulted a materiality assessment based on a pre-selected list of impacts and dependencies applicable to avocado production. Water use, use of fertilizer, pesticides and herbicides, working conditions, and land use were selected as the most material impact drivers to take forward to the measurement and valuation stage.
HOW? What was measured and valued?
Banorte carried out a quantitative, qualitative and monetary analysis to assess water use, use of agrochemicals, working conditions and land use change.
Water used was valued by assessing decrease in crop production, water costs, increased production costs (Consequences to business) and change in water availability in the same basin (Consequences to society).
Use of fertilisers, herbicides and pesticides was valued by assessing reduced productive capacity (Consequence to business).
To assess working conditions, Banorte applied a qualitative valuation focusing on quality of life of workers and the resulting employee perception and decrease in labor supply (Consequence to business).
Finally, land use change was valued using a qualitative assessment of ecosystem services and population displacement (Consequence to society).
WHAT NEXT? What were the results of the assessment?
Applying this capitals assessment has made it possible for Banorte to better understand the potential of the bank’s agricultural portfolio, has helped inform what the best agricultural practices are and that need to be integrated into the bank’s social and environmental risk management system. This will enhance the sustainability and reduce risks associated with disbursing loans and credits, including counselling, annual reviews, and monitoring processes.
Banorte plans to develop a model for evaluating their portfolios based on critical variables, including all four impact drivers, as well as other material impacts and dependencies outside the scope of this initial assessment. These will be incorporated into a study of clients and their future projections, with the intention that this will improve the group’s engagement strategy.
Furthermore, applying a capitals assessment helped Banorte to identify several challenges associated with implementing the next steps.
Learn more about BANORTE here.
For more information on BANORTE visit here. (In Spanish)
Grupo Herdez
The below answers are paraphrased from a longer discussion, which can be accessed in full here.
Business Context
Grupo Herdez is a leading producer of shelf-stable foods and one of the main players in the ice cream category in Mexico, as well as one of the leaders in the Mexican food category in the United States. Grupo Herdez wants to continue to grow, consolidate, and position itself as a leading organization in the food, beverage and wellness products sector, recognized for their quality and for the effectiveness of its efforts aimed at ensuring the satisfaction of the needs and expectations of its clients and consumers, within a framework of competitive care and service, under strict criteria of quality, safety, profitability, strategic potential and sustainability.
Assessment
WHY?: What was the objective of the assessment?
The objective of this assessment is to compare different irrigation systems (sustainable agriculture versus traditional agriculture) for the adequate management of the water resources, seeking to reduce the risk of scarcity or low availability. With this objective in mind, Grupo Herdez hopes to improve their water resource management and the management of irrigation systems and to gain insight in comparative advantages between traditional and sustainable agriculture.
WHAT?: What was the scope of the assessment?
This assessment has an organizational focus and focuses on upstream operations. The specific focus of this assessment is on tomatillo and tomato suppliers who, with the support and collaboration of Grupo Herdez, develop actions for efficient water consumption, migrate from traditional agriculture to sustainable agriculture. This study covers the obtaining, transport and storage of tomato and tomatillo.
The assessment will focus on the dependency on water mostly, through both quantitative and qualitative valuation. The value perspective focuses on both society and business, as with the assessment Grupo Herdez wants to ensure that the availability of water resources favours the continuity of the production process in the field and supports the rural society at the same time.
The final assessment focuses on natural capital. Despite human and social capital impact drivers and dependencies were identified as material and considered in the scope of the assessment. Material impact drivers and dependencies identified were availability of water, development of environmental training, and shortage in labour availability.
HOW?: What was measured and valued?
The assessment mainly focused on the scarcity of water resources and the availability of water by using quantitative valuation techniques. The availability of water was measured through the indicator of annual rainfall in mm/in2. The indicator for change is in the use and exploitation of water impacting on water resource shortage. The impact on the business is that it leads to the reduction of the area and the production of tomatillo and tomato crops. The water resource shortage leads to higher prices of production and acquisition of raw materials to the business due to lower supply. The society is affected as it will lead to a price increase in the final products of the consumer and an increase in the price of water ($/m3).
WHAT NEXT?: What were the results of the assessment?
Grupo Herdez is undertaking a pilot application to assess the viability of implementing water-saving technologies in tomato and tomatillo cultivation. A cost-benefit analysis will verify the assumptions made, with the level of confidence determined by project results. The outcomes may have significant relevance for both agricultural producers and Grupo Herdez.
The impact of this project will likely be felt primarily by producers investing in the initiative, even though budget constraints pose a challenge. Over the medium term, a return on investment is anticipated within 3 to 5 years, as assessed by the benefit-cost ratio of the crop.
The results of this assessment will be shared with various stakeholders, including business partners, who will receive valuable insights into sustainable products. Other Grupo Herdez producers will benefit from replicable success stories. Internal communication within Grupo Herdez will disseminate results to promote more impactful studies. Interest groups, with prior authorization, will also receive relevant project information to inform clients, national and international organizations, and NGOs.
For more information on Grupo Herdez’s Sustainability strategy visit here.
Veinte Soles
The below answers are paraphrased from a longer discussion, which can be accessed in full here.
Business Context
Veinte Soles is a group of Mexican entrepreneurs and professionals dedicated to the growing, production and marketing of quality natural vanilla products. The harvest of Vanilla in Papantla Veracruz and its surroundings is a key economic activity in the area, and it is a fundamental part of social and ethnic identity.In fact, Vanilla is perceived as a natural guardian to the environment within the community.
Veinte Soles, in joint effort with the community, has created what the company calls the “Program of Associate Producers”. One key element is to support producers with the challenges of Vanilla cultivation, as the plant climbs high on trees, is difficult to pollinate, and is reliant on a healthy ecosystem to thrive.
Deforestation is a big issue in this matter, as well as the increase of droughts due to climate change. Since Vanilla is an orchid, it also makes the plant susceptible to pests and soil management. Apart from the environmental challenges, there is a lack of diverse and young workforce, with the average worker being above 45 and male. Lastly, Veinte Soles identified risks entering the international markets. Some cultivation practices decrease the quality of vanilla, which can damage the reputation in international markets. Furthermore, international markets demand a fixed quantity of supply, which is difficult to meet with the climate change related risks producers are facing.
Examples of Veinte Soles’ interventions are to cultivate large trees that provide shadow coverage and to train farmers on semi-intensive cultivars and manual pollination.
Assessment
WHY? What was the objective of the assessment?
The objective of the assessment to assess and understand the benefits of sustainable practices, promoted by Veinte Soles in their vanilla production and to communicate the value created to clients.
The target audience for the assessment are the producer groups, potential investors, and the workers in the field.
WHAT? What was the scope of the assessment?
The scope of the assessment is intended to target the group of associated producers that need capacity building to improve their processes focused on fair trade, investors and workers.
The anticipated benefits of the assessment are the increase of good agricultural practice and sustainable crop care, as well as improved communication to investors to enhance vanilla production in the region.
HOW? What was measured and valued?
Material impact drivers measured and valued were use of ancestral practices and inclusion of women, as well as volatility of the global market, global demand and production. The assessment mainly focused on social and human capital, with some inclusion of produced capital.
WHAT NEXT? What were the results of the assessment?
The results of the assessment have not been reported by the time of reporting.
Learn more about Veinte Soles here.
Thailand
The below contains a summary of a pilot application by a business that took part in the TEEBAgriFood for Business training in Thailand. The training was provided online in five half-day sessions, taking place in 2022.
Applications
Biovert Protein Co. Ltd.
The below answers are paraphrased from a longer discussion, which can be accessed in full here.
Business Context
Aiming to promote a more sustainable and circular aquaculture production process, Biovert Protein Co., Ltd, a start-up based in Bangkok, Thailand, has designed a process enabling nutrients usually discharged in aquaculture wastewater to be upcycled into energy dense and protein packed living fuel that can replace unsustainable commercial fish feed. They call this innovation Biovertical Unlock.
Meanwhile, upcycling organic waste into insect protein offers an alternative used in commercial fish feed, which is typically made from a combination of fish meal and soybean meal, neither of which can be scaled sustainably to meet the growing demand.
Through its Biovertical Unlock innovation, Biovert sustainably develops aquaculture from linear into circular nature based systems. The full report contains figures that show the difference between the existing linear and proposed circular system.
With this circular model, Biovert aims to initiate a shift towards a more sustainable form of aquaculture in the Lower Mekong River Basin (LMB). If made more efficient and sustainable, aquaculture can act as an alternative to the currently dominant yet unsustainable inland capture fisheries operating in the LMB, a region that is facing multiple overlapping challenges associated with the proliferation of hydropower dams and climate change.
Biovert expects a reduction in exposure to waterborne disease risk, increased the household income for LMB farmers who adopt the solution, and creation of another source of income for local women Kai foragers, whose livelihoods are being put at risk by the negative impacts that hydropower dams are having on this freshwater plant food staple.
Assessment
WHY? What was the objective of the assessment?
The overarching aim of the capitals assessment is to demonstrate that the Biovert intervention is a cost effective, financially viable alternative to existing aquaculture production processes while providing additional social and ecological value. A key objective of the assessment is therefore to strengthen its ‘proof of concept’ pitch for further investment, which it will use to fund a demonstration pilot in Northern Thailand.
This multi-capitals assessment therefore comprises two stages:
The first is a high-level, preliminary desk-based assessment (High-Level Assessment) applied to the proposed Biovert intervention that will help inform Biovert’s ‘proof of concept’.
The second will be a more detailed multi-capitals assessment (Detailed Assessment) of the demonstration pilot when it is implemented, using actual site data and information collected as part of the demonstration project.
WHAT? What was the scope of the assessment?
Biovert opted to conduct a multi-capitals assessment factoring in impacts across all four capitals. The scope of the assessment is effectively a ‘with/without’ scenario comparison, where the impacts of the Biovertical Unlock intervention has across the capitals are compared with the baseline of the current situation under the existing approaches.
The baseline is therefore aquaculture farms using commercial fish feed as a feed source and mechanical rotating paddle wheels for aeration. The scenario is the introduction of Biovert’s two interconnected nature-based innovations.
The value-chain boundary of the assessment is primarily the direct operations and its consequences to the business and to communities in the local area. However, there is also an ‘upstream’ element in relation to the sourcing of key ingredients used in commercial aqua-feed in the existing ‘without project scenario’.
HOW? What was measured and valued?
Biovert conducted a materiality assessment and selected its 5 most material impact drivers. It then mapped the impact pathways from each of these, indicating how they lead to a change in capitals, and how these changes have consequences to both society and the business, While all 5 impact drivers are in the realm of natural capital, the fact that these lead to changes and consequences across all four of the capitals highlights the interdependent relationship among natural, social, human, and produced capital.
With these impact pathways mapped, the next stage was to determine how they would be measured and valued. The approach for this stage (Steps 5, 6 and 7) differs between the high-level and detailed assessments. While the former is based purely on desk-based research, professional judgement and sector-specific knowledge, the latter involves primary data collection from the demonstration pilot, thereby expanding the possible measurement and valuation techniques.
WHAT NEXT? What were the results of the assessment?
Impact pathway mapping and the results of the high-level valuation, with their grounding in academic literature as well as the professional judgement by the consultant, can help to strengthen Biovert’s ‘proof of concept’ business case.
The high-level assessment results indicate that the Biovert innovative process has a positive impact across all four capitals. When presented to impact investors, these results will assist Biovert in making an even stronger pitch that their innovative process is not only an opportunity to improve the livelihoods of small-scale aquaculture farmers in the region, but one that adds social and ecological value in a region facing intense pressures from the proliferation of hydropower dams and the changing global climate.
Olam Agri (Thailand)
Business Context
The Olam Group is a leading food and agri-business, supplying food ingredients, feed and fibre to thousands of customers worldwide, from world famous brands to small family run businesses. The Olam Group is headquartered and listed in Singapore.
In their Annual Report for the Financial Year 2022 they included several Integrated Impact Statements. One of these statements focuses on Thailand and Vietnam and is titled Natural Capital Impact Valuation of changes in water pollution and GHG emissions following fertiliser training in Thailand and Vietnam.
This summary mostly focuses on the results of the assessment results of Thailand. For the full report click here.
Assessment
WHY? What was the objective of the assessment?
Recognising the potential impacts of fertiliser use on freshwater pollution because of potential eutrophication and GHG emissions, Olam provides training to farmers with the objective of changing farming practices to reduce synthetic fertiliser application as part of the Sustainable Rice Platform-registered training programme. In 2022, Olam trained about 9,000 farmers in Thailand and 10,000 farmers in Vietnam. This assessment evaluates the effectiveness of this training program in both countries.
WHAT? What was the scope of the assessment?
Olam has estimated the Natural Capital impact of changes in fertiliser use by comparing the fertiliser use for farmers in Thailand that have received up to four years of training as of 2022 to those that have mostly received one year of training as of 2019.
For both Thailand and Vietnam, the comparison between the current year (2022) and baseline years shows the fertiliser use reduction after up to three additional years of training.
HOW? What was measured and valued?
Water pollution and greenhouse gas (GHG) emissions were selected as the impact drivers to value through quantitative and monetary valuation. Per tonne of rice, the annual societal costs of water pollution and GHG emissions were estimated to be reduced by 32% and 38% respectively in Thailand.
For the approximately 8,400 farmers trained in northeast Thailand, it is estimated that annual fertiliser leakage into water decreased by about 400 tonnes and associated annual GHG emissions decreased by about 7,600t CO2e in 2022.
This is estimated as a decrease in natural capital impact of approximately US$3.2 million in 2022. As Olam purchases only about 0.5% of the rice produced in these farms, the decrease in natural capital impact attributable to Olam’s purchased volumes of rice is about US$17,000.
WHAT NEXT? What were the results of the assessment?
By projecting the data obtained from northeast Thailand to the approximately 700 farmers trained in central Thailand, from which Olam purchases all the rice produced, it is estimated that the potential decrease in natural capital impact is approximately US$500,000.
Olam plans to scale up the fertiliser training programme to 30,000 farmers and 15,000 farmers by year 2026 in Thailand and Vietnam respectively.
The Olam Group did attend several TEEBAgriFood for Business Training sessions. However, as opposed to the other pilot applications listed on this webpage, they have developed their assessment internally.
Natural Capital valuation assumptions and notes
Carbon emissions: They have applied a Social Cost of Carbon (SCC) of US$90/tCO2e to value the costs to society of climate change impacts due to GHG emissions, measured by a global GDP reduction. They have used the mid-point of the SCC recommended by Massachusetts Institute of Technology (Pindyck, R S., 2019, The social cost of carbon revisited).
Water pollution: Olam has applied the environmental prices of nitrogen (N) and phosphorus (P) emissions to water from fertiliser use. The environmental prices of N and P emissions to water are obtained from CE Delft Environmental Prices Handbook EU28 Version (2015), corrected for inflation and purchase power parity. There is a limitation on the use of European values in the context of Thailand as damage costs of environmental pollution can vary widely according to local circumstances. Olam will continue to update its water pollution methodology as more appropriate valuation data become available.
The leaching and runoff rates of N and P from fertilisers are assumed to be 24% and 40% respectively. The leakage rate of N is obtained from the 2019 Refinement to the 2006 IPCC Guidelines for National Greenhouse Gas Inventories. The leakage rate of P is obtained from a study titled “Phosphorus Use Efficiency and Management in Agriculture” (Johnston, A.E. and Roberts, T.L., 2015).
Disclaimer
Olam’s Natural Capital accounting analyses are not related to financial results or financial reporting. The analyses and insights are specific to the selected operations and are based on the use of environmental economic estimates of non-monetary ecosystems, goods and services; they should not be used outside the context of their analyses. All underlying methodologies are based on well-established databases and frameworks. However, as they depend on third-party expert studies, all values are indicative estimations and are provided as ballpark estimates to inform debate in relation to the management and mitigation of natural capital impacts. There are limitations with respect to some of the methods used. Results from the NC valuation analyses may be readjusted according to further methodological refinements.
Learn more about Olam Agri here.
Piloting Organizations
Join the Coalition
Become part of a dynamic global collaboration of leaders and leading organizations who have united around a purpose-driven ambition.
Sign-up for updates
Benefit from the Coalition’s unique overview of the capitals approach and community, gain insights into the latest thinking and developments and receive newsletters and project updates.
Collaborate
Collaborate and connect through our new community platform. Build relationships within the community, collaborate with peers, explore challenges and opportunities and co-create solutions in a pre-competitive forum.