Panel Discussion on Finance

Day One.

Panel Discussion on Finance

What does the value chain need and expect from finance organisations? How can these needs be better met? Upstream, what impact can financial institutions have on land use? What practical solutions do they have for influencing the market? Downstream, how can financial institutions play a role in pushing for greater demand for responsible sourcing? What role can investors play in encouraging banks to develop new products that are socially and environmentally responsible?

The afternoon session of Day One of RT14 included a panel with representatives from a mixture of banks, investors and blended finance institutions.

Lucian Peppelenbos from APG Asset Management acted as moderator and launched the panel discussion by affirming the huge expectations many had for how finance could be a game changer on soy, both in terms of creating the right market conditions for greater demand, but also making it profitable to be a responsible producer. As a global fund manager with responsibility for the pension fund covering 4.5 million people, he asserted that their particular balancing act was to avoid portfolio risk while also recognising the need to be a sustainable investor.

Rabobank’s Director of Sustainability, Bas Rüter, was also on the panel and emphasised the institution’s drive to find innovative approaches to delivering sustainability as well as a return on investment.

This has led the Bank to partner up with UN Environment to launch their AGRI3 Fund, with the aim of unlocking at least USD 1 billion in finance towards deforestation-free, sustainable agriculture and land use. The overarching goal is to ‘de-risk’ an investment in responsible production models. Doing so, the fund can also play a part in addressing the climate crisis, with a focus on reduction in GHG emissions too.

Running for the next 5 to 10 years, the Fund will seek to support innovative schemes that promise zero deforestation, sustainable agricultural practices and that improve rural livelihoods too.

For Johnny Brom of Sail Ventures, this all has to become ‘business as usual’. His boutique investment company is the advisor to &Green. The Fund was launched in 2017 with US$100m of capital with a mission to prove that financing inclusive, sustainable and deforestation-free commodity production can be commercially viable and replicable.

Day One: Panel Discussion on Finance.

“We find on the ground with farmers and traders, the risk doesn’t look very attractive. Long-term partnerships are needed to shift practice.”

Johnny Brom, Sail Ventures

be established with growers, to support their for financiers and investors; the market has to see others leading the way.” of a sustainable soy supply chain to set a minimum standard and achieve certification of the soy they are sourcing.

Danielle Carreira, Senior Manager at Principles for Responsible Investment, the world’s leading proponent of responsible investment, highlighted their work related to sustainable

“It’s about food security, water, A key point made by Johnny to the conference was that, in a large and complex human rights, biodiversity – as sector, too much of the cost for more well as about climate change.” sustainable practice can fall on the smallest players in the value chain. To support a change Danielle Carreira, Principles for in practice, longer-term partnerships need to Responsible Investment investment in sustainable practice. Data and transparency were challenges that Greater demand and consumer pressure is with difficulties emerging if there wasn’t needed, too, according to Bas Rüter. Although enough data to manage a process of financial a sustainable food supply remains a shared ‘de-risking’. She also suggested that a zero responsibility, that can have a stronger and deforestation leaders index could be a more immediate impact than anything else welcome development. to move. Across the panel all contributors agreed “The challenge has been If investors know that value will be there in companies thinking it’s all about the longer term, they will be able to invest. If additional costs but more likely it will be less risky and they need there is also public funding support of better practice, it could tip the balance in favour of zero deforestation even faster. land use and deforestation. the investor working group had highlighted, that getting long-term value right is critical. PANEL PARTICIPANTS

Peter van der Werf, Robeco Moderator - Lucian Peppelenbos, Senior Robeco’s Peter van der Werf spoke next on Specialist, APG Asset Management the panel and outlined the balance they seek to achieve between being a responsible Bas Rüter, Director of Sustainability, Rabobank investor taking risk out of their portfolio and Danielle Carreira, Senior Manager of their need as a long-term investor to stay Environmental Issues, UNPRI in a dialogue with companies that have yet Johnny Brom, Engagement Specialist, Sail to achieve zero deforestation. In terms of Ventures building demand for responsible soy, he said that from 2012 they’ve called on companies they actively engage with on the topic Peter van der Werf, Director of Active Ownership, Robeco Responsible Investment and Governance