2021 Impact Report: Building Capacity
Silk Grass Farms Natural Products from Belize
Silk Grass Farms is a vertically integrated agribusiness in Southern Belize committed to reimagining the way food is grown and processed, for good. Our Mission: To model a regenerative approach to agribusiness that is sustainable, replicable, and fair. Our Vision: A thriving planet, alive with biodiversity and healthy, happy people. Our Core Values: Integrity * Interdependence * Diversity * Stewardship * Lifelong Learning
Table of Contents Letter from Board Chair..........................3 Measuring What Matters......................4 People....................................................................5 Profit.......................................................................6 Planet.....................................................................7 Product Traceability..................................8 What Is B Corp Certification ............9 Challenges.......................................................10 Future Commitments.............................11 2
www.silkgrassfarms.com
Building Capacity What our team has been able to accomplish over the past year is astounding. Not only did we build and equip a 130,000 square foot specialty food processing facility from the ground up; we built worker housing and ancillary facilities for more than 75 team members, rehabilitated more of the farm, and became a Certified B Corporation, among other accomplishments. Mandy Cabot, Board Chair
Our progress over the past year was made possible by the hard work and determination of our team, our suppliers, and our customers. As Belize's first -- and as yet only - certified B corporation, our unique model incorporates food production and processing with land conservation and stewardship. We continue into 2022 propelled by a shared vision for our Silk Grass community, Belize, and the world. It is humbling to be part of a team that is as committed as we are to building something with lasting impact for Belize, by Belize, and of Belize. In community,
Company Timeline 2019
Purchased Citrus & Cattle Ltd. and Belize Fruit Processors Ltd.; incorporated Silk Grass Farms Ltd.; took stock; repaired roads and worker housing; cleared abandoned orchards for rehabilitation
Fulfilled Commitments from 2020 Endowed Silk Grass Wildlife Preserve with 30% shares of Silk Grass Farms & Enterprises
2020
Structured and Rebranded Established company policies and developed business model; branded Silk Grass Farms; legally protected 24,700 acres of rainforest; planted 87,926 trees; created water retention basins; expanded workforce.
Achieved B Corp Certification Completed construction of men's dormitories and family homes
Founded
2021
Built Capacity
Built worker commissary, laundry, restaurant, and recreational facility
Built and equipped 130,000 square foot factory; planted new crops; built worker housing; increased
Conducted farm-wide soil testing
certifications.
Set up employee blood bank Increased employee participation in continuing education by 75%
workforce; added coconut water and honey to sales mix; launched website; achieved B Corp and HACCP
Flip the Switch 2022
Commission new factory and begin large scale fruit processing; finalize planting of farm; contract with raw materials suppliers and with co-packers; factory operations run on solar power; trials for scalable soil rehabilitation underway.
3
Measuring What Matters
We chose six of the seventeen United Nations Sustainable Development Goals to measure our impact against, informing our Theory of Change.
Good Health and Well Being Employee benefits; Health & Safety policies Food safety certifications (SQF and HACCP) Healthy products our impact against.
Decent Work and Economic Growth Living wage (compensation and allowances) Job creation (increased employment) Training, continuing education, and good housing
Sustainable Cities and Communities B Corp certification Long-term planning Reduce reliance on imported goods; increase GDP
Responsible Consumption and Production Environmental Compliance Plan Diverse crops and products; add value at source Zero-waste circular economics
Climate Action Biorefinery development and bio-waste solutions Pledge Carbon Negative operations by 2030 Solar-powered factory
Life on Land Creation of Silk Grass Wildlife Preserve Rainforest, wildlife, and biodiversity conservation Soil health, water, and carbon management 4
People
Third-party certifications were an important part of capacity building in 2021
Good Health and Well-Being Decent Work and Economic Growth PROGRESS HIGHLIGHTS 2021
Increased workforce by 33%, adding 59 local, full-time employees; employed 178 in total. 100% of employees who worked one year or more received year-end raises and bonuses. Average raises across workforce were 12.5%. As of December 31, 2021, lowest paid workers earned 6% above national minimum wage. Worked with Ministry of Health to facilitate COVID-19 vaccinations for 100% of employees. Partnered with local hospital to create a blood bank for employees and local community to access blood for medical emergencies. Dispersed $103,500 in no-interest loans to employees in urgent need of cash. This included emergencies related to medical bills, mental health counseling, and other wellbeing related services not covered through health insurance. Provided safe, clean, rent-free housing to 65 employees and their 10 children (a 130% increase in employees housed on site from 2020). Built a recreation space with games and dining area to improve quality of life for residents of worker housing. The facility, built in 2021, will be furnished and functional in 2022. Subsidized transportation for 27% of workforce. Paid primary school fees for 24 children of lowest paid employees. 5
Profit In 2021, Silk Grass Farms prioritized economic impact through a number of achievements.
Responsible Consumption and Production Sustainable Cities and Communities PROGRESS HIGHLIGHTS 2021 (increases measured from 2020)
Increased investments in farm and factory infrastructure by 62%, building a state-of-theart, 130,000 sq. ft. food processing facility, adding value at source and reducing imports. Increased planted area by 20%, making the farm's total rehabilitation plan 70% complete. Increased coconut harvests by 10% as we managed soil fertility and farm care, and as new groves came into production. Added green coconuts to harvest mix. Increased coconut oil production and added two natural, healthy offerings to product mix -- coconut water and honey -- increasing gross revenues by 22%. Hired a Logistics and Procurement Manager to ensure product quality and traceability. Enrolled key managers in Safe Quality Foods (SQF) trainings; began rigorous process of SQF certification; achieved HACCP (Hazard Analysis Critical Control Point) certification. Hosted 2 interns and provided continuing higher education to 4 management level employees, increasing participation in professional development programs by 75%. Increased skilled workforce (27% of supervisory positions are currently held by women). Created Environmental Compliance Plan with the Department of Environment. This Plan controls for environmental risk mitigation, including site preparation, agrichemical use, energy and fuel management, waste and water management, hazard and disaster risks, and cultural and social issues. 6
Planet Environmental impact guided our capacity building in 2021. We laid the groundwork for innovating change in food production and processing, in Belize and beyond Life on Land Climate Action PROGRESS HIGHLIGHTS 2021
Gifted 30% of shares of Silk Grass Farms and Silk Grass Enterprises to the Silk Grass Wildlife Preserve, protecting 24,500 acres of rainforest in perpetuity. Hired a ranger to patrol Silk Grass Wildlife Preserve's protected area. Worked with environmental development consultants to create an Environmental Impact Strategy for Silk Grass Farm and factory. Set benchmark for Silk Grass Farms operations to become carbon negative by 2030. Committed to soil biodiversity studies and practices for the long-term elimination of agrochemicals and Regenerative Organic Certification by 2030. Began negotiations with BC Biocarbon to build a state-of-the-art, clean-tech biorefinery to upcycle post-harvest and post-processing biomass into carbon-stable, value added products (biochar, pyroligneous acid, syngas, heat energy, etc.) and soil amendments. Contracted with GreenQuest (natural inputs specialists) to explore methods of incorporating biochar into scalable geological carbon sequestration and soil rehabilitation. Contracted with Alternative Energy Development Group for 2MW Solar array to reduce reliance on non-renewable energy sources at the new factory and housing areas. Created 2 new rainwater catchment basins for a total of 15; observed increased wildlife around reservoirs. Planted 200 acres with 8 different crop varietals, increasing crop diversity. 7
Product Traceability 100% Products of Belize
2020
Processed 1.2 million coconuts
2021 Processed 1.8 million coconuts
SILK GRASS FARMS (78.04%) TEXBEL FARMS (20.65%) ST & SONS (1.31%)
SILK GRASS FARMS (54.13%) TEXBEL FARMS (27.23%) ST & SONS (14%) KERBO FARMS (2.12%) ABRAHAM REMPEL (0.98%) XIBUN RIVER ESTATES (1.55%)
Our commitment to transparency extends across our supply chain, including our raw materials sourcing. After reviewing long-term forecasts for factory capacity vs. farm production, we expect Silk Grass Farms will supply approximately 40% of our raw materials while we source 60% from local farms and our affiliate farms in the Xibun River Enterprises group. Our raw materials traceability will also be third-party-verified starting in 2022, as we adopt SQF certification. Coconuts: Coconut production remained fairly stable, increasing 10% from 2020. However, due to increased demand and adding coconut water to our product mix, this required buying in more coconuts from other local farmers who complied with our Supplier Code of Conduct. Honey: Silk Grass Farms produced 100% of the 112 liters of honey sold in 2021 under our brand. As we grow our apiculture projects, we aim to expand honey production, even adding specialty honey from our newly established melipona beecheii hives.
8
B Corp Certification Certified B Corporations® (also known as B Corps™) are for-profit, purpose-driven companies that are legally bound to measure success beyond profits. In addition to financial performance, success is defined by performance across social and environmental metrics. To become a B Corp™ Silk Grass Farms underwent a rigorous, third-party audit called the B Impact Assessment that evaluates how well a company serves its stakeholders. B Corps™ define stakeholders as anyone affected by the business, including employees, customers, suppliers, neighbors, shareholders, and the natural environment. As Belize's first and only B Corp™ to date, Silk Grass Farms joins a global network of c. 5000 companies worldwide who seek to affect positive change in economic systems. B Corps™ work interdependently to shift the structural underpinnings of capitalism from systems that benefit few, to ones that benefit many. Together we are transforming the global economy to benefit all people, communities, and the planet. Some of the areas we did especially well in were worker compensation, policies, and benefits. However, we were challenged most in documenting environmental progress through a third-party certifier. Our goal for the next B Impact Assessment will be to score over 150 points out of the possible 200.
B Impact Assessment Score 2021
B Impact Assessment Target 2024
Progress (45.27%)
Target (85%)
Remaining (54.73%)
Impact Categories
Workers Community
60% 46%
Environment Customers
Impact Categories
50%
Governance
52% 34%
Remaining (15%)
Governance
90%
Workers
90%
Community
80%
Environment
80%
Customers
80%
9
Challenges In 2021, many of the challenges from the previous year persisted, some were overcome, and new ones were identified. Productivity and Fertilizer Use: Productivity improved in 2021, in part, because of an increase in conventional fertilizer use. We also increased the farm's total planted area. Together, these developments led to a 36% increase in the use of conventional fertilizer. In the patchy, hard soils that make up much of the farm, conventional nitrogen sources are required to maintain productivity and crop development. Our long-term goal is to build soil nutrition and biodiversity, which will take years. Still, we are tracking our agrochemical use and experimenting with ways to decrease it as we establish a pathway to Regenerative Organic Certification by 2030. Seasonal worker shortages: While we have been able to accomplish a lot with our existing workforce, farm labor shortages continued as Covid-19 related border closings limited travel for migrant workers from neighboring countries. Quantifying and monitoring our carbon footprint: We have not established a tracking system to measure our greenhouse gas emissions. However, this will be prioritized in 2022 and formalized in 2023, as we join the community of 1100+ B Corps that have pledged to achieve net zero emissions by 2030. Ongoing issues with climate change: Increasingly, the effects of global climate change are impacting production in Belize and beyond with severe droughts during dry season; excessive and continuous rainfall during the rainy season; and more frequent and severe weather events throughout the year. Logistics and supply chain issues; product packaging: Disruptions in supply chain logistics and increased costs have led us to seek more transit-effective packaging such as pouches vs. bottles for some SKUs. We are working to create bottle take back program for our plastic packaging. As yet, there are still no recycling facilities in Belize. 10
Future Commitments 2022: Set up pension plan for all employees Finish planting ground covers and grasses; finish planting riparian buffers Hire 1-3 agronomists with experience in regenerative agriculture Rehabilitate 20% more of farm area, completing 90% of crop planting Further establish regenerative practices through soil inoculation trials, ground covers, and intercropping Resume hardwood nursery and increase hardwood plantings Launch production in 130,000 sq. ft. processing facility Achieve SQF Certification Install 2MW solar array on east side of new factory Finish construction of women's dormitories Finish construction of company cook and shopkeeper's house Build onsite preschool/daycare facility for children of employees Join B Corp community in Net Zero Pledge 2023 Install bio-reactor to convert bio-waste into heat energy, biochar, and wood vinegar Set up take-back program for used packaging/bottles Formalize local stakeholder engagement programs and activities Establish a more detailed and robust Integrated Pest Management system Track fossil fuel use and carbon footprint 2024 Achieve Rainforest Alliance Certification 100% of farm planted Begin scaling applications of biochar and wood vinegar Biodiversity studies and wildlife monitoring with Silk Grass Wildlife Preserve
2025 and beyond Achieve Regenerative Organic Certification Attain third-party verified carbon negative operations Establish educational programs to promote regenerative model Enter voluntary carbon credit market with outputs from biorefinery 11
7 Miles, Southern Highway, Stann Creek District, BELIZE, C.A. www.silkgrassfarms.com