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About this report
Welcome to the &Green Annual Report covering activities from 1 January to 31 December 2023. This report is designed to be accessible to readers with varying levels of familiarity with our organization and investments, whether they are well-versed in our operations or encountering us for the first time. In addition to a comprehensive overview of our activities and expanding our investment portfolio, we include information about why we do what we do, our investment approach and our growing network.
For clarity, we have defined those words and abbreviations that are key to understanding the nature and scope of &Green’s activities; they look like this . All the defined words and abbreviations have been gathered in the section below ‘&Green Vocabulary’.
The special focus in this years’ Report is our approach to Natural Capital and Ecosystem Solutions investing, expanding further on our unique Transformational Change approach which we highlighted in the 2022 Annual Report. &Green has been investing in this manner since its inception in 2017, supporting agri-commodity businesses that protect forest and biodiversity, empower communities and optimize production systems.
The Portfolio section discusses our investments in agri-commodities and explains why we consider them to be of paramount importance. &Green’s impact performance is captured in the same section, the financial performance of &Green can be found in Fund Performance
We are excited to present how &Green continues to bring its purpose to life.
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&Green's Purpose
We envisage people thriving on a sustainable planet.
&Green, a Foundation established in the Netherlands in 2017, was created within this context to finance the transformation of global commodity supply chains so that they can have positive climate and biodiversity impacts while still delivering on growth targets. The &Green Fund focuses on the tropical forests and peatlands that are in most need of protection and invests in the most active commodity sectors in those ecosystems.
DEMONSTRATING &GREEN’S BIODIVERSITY POSITIVE APPROACH
Biodiversity is a complex concept that seeks to describe the variety and variability of life on Earth, encompassing the diversity within species, between species, and of ecosystems. Genetic and species biodiversity within ecosystems is a vital component of a stable environment. In the face of the current biodiversity crisis, the value of this complexity in ecosystem dynamics is recognized beyond the ‘ecologists` niche’ because biodiversity plays a crucial role in sustaining environmental and human health.
Our &Green strategy aims to conserve, restore, and build resilience in tropical landscapes. A direct consequence of our investments and processes is the significant benefit to biodiversity. Biodiversity is, however, scientifically complex which makes identifying and developing credible and transparent metrics to accurately measure our positive impact challenging. We aim to convey the effects of our investment – from enhancing soil microfauna resilience to wildfire control to managing human-wildlife interactions – to demonstrate our commitment to environmental stewardship.
BIODIVERSITY – FROM STASIS TO STEWARDSHIP
2022 was an important year for biodiversity, with the Taskforce for Nature-Related Financial Disclosures (TNFD) publishing their first beta framework; the EU reaching (provisional) agreement on an EU Regulation on deforestation-free supply chains; and, of course, it was the year of the historic adoption of a global biodiversity framework at the UN Biodiversity Conference of the Parties in Montreal (COP 15).
In 2023, &Green translated this global dynamic into tangible actions. We are one of the early adopters of the TNFD framework, with this annual report marking our first-time reporting against it. In addition, we initiated work to provide our borrowers with the necessary tools to use the NDPEs implemented in collaboration with &Green, enabling them to demonstrate evidence of EU Regulation on Deforestation-free Products (EUDR) compliance in their commercial engagements, deriving value from action plans. We persist in implementing our proprietary Forest & Biodiversity Framework in our investments, working on Biodiversity Action Plans to address legacy biodiversity challenges of our investees.
&GREEN METRICS
We design our biodiversity metrics by considering both the risk context and impact objectives for each transaction. We identify relevant data collection points, for example simple indicators like crown cover and ecosystem intactness for forest protection within a landscape, that offer us insights into biodiversity trends. Metrics are tailored to support business decisions, integrating seamlessly into investment processes and borrower operational management. We establish a comprehensive set of nature and biodiversity disclosures for each transaction, complemented by metrics specific to a transaction and in the broader landscape in which a borrower operates. This aligns internal processes and streamlines data collection and reporting to demonstrate our investments “do no harm” and contribute to a net biodiversity gain.
An example of this in practice is our work with PT Dharma Satya Nusantara Tbk (DSNG) in Indonesia. As part of the loan agreement, DSNG has designated a forest area of 3,148 hectares to implement a program that prioritizes biodiversity and ecosystem service, local economic empowerment, and forest management capacity building. In collaboration with other partners, DSNG has a policy of comprehensive monitoring and protecting biodiversity, as well as implementing an integrated landscape approach to the conservation of key species. Read more about, and enjoy photos of a diversity of Indonesian birds, mammals, and reptiles here.
We view our efforts as a prime opportunity for us to showcase our biodiversity impact to the investment community. We continue to actively explore ways to strengthen these outcomes in our portfolio.
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2023 Highlights
&GREEN Highlights
USD 30 MILLION NEW LOAN TO ETG
USD 180 MILLION OF ADDITIONAL CAPITAL FROM THE GREEN CLIMATE FUND
USD 156 MILLION TOTAL CAPITAL DEPLOYED AS AT YEAR END
> 1 BILLION tCO2 CARBON STORED
> 3,100,000 HECTARES PROTECTED
> 13,200,000 tCO2e OF CLIMATE BENEFITS
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Letter from the Board
A YEAR OF GROUNDWORK
2023 laid the groundwork for future scaling. Our work in building fundament protocols and the right structure for scale is not particularly rewarding in the short-term but we do think we are setting up &Green for scale and long-term success. In 2023, the &Green Fund doubled its raised capital with a breakthrough USD 180 million contribution from the Green Climate Fund, the world’s largest climate fund. With this investment &Green can move from ‘proof of concept’ stage and set itself up for real scale, as we aim to attract private institutional investors into our strategy.
The &Green portfolio now encompasses eight transactions across three continents: grains, cattle, and soy in South America; coffee and palm oil in Asia; and in 2023 we closed and disbursed our first transaction in Africa, and again in a core focus sector, cocoa.
Bayu Krishnamurti and Eric Soubeiran both reached the end of their term on the &Green Advisory Board at the end of 2023. On behalf of the other Board members and the &Green Team, I warmly thank them both for their valuable contribution and wish them every success.
NANNO KLEITERP
Chairperson of the &Green
Board of Directors
STRATEGIC PROGRESS
The &Green Fund is positioned to attract scalable capital and actively support the transition towards low-emission, climate-resilient tropical commodity supply chains in the most-relevant countries. EU regulations became more concrete on deforestation-free products during 2023, mandating compliance with relevant laws in the country of origin, including human rights and land-use rights, validate our theory of change. This is, and will continue to, provide a tailwind to the &Green proposition.
During 2023, &Green added the Ivory Coast as a new jurisdiction to our portfolio as we closed a corporate transaction with Export Trading Co. Ltd or ETC Group, focused on their cocoa value chain in Ivory Coast. The Ivory Coast is the world`s largest producer of cocoa with smallholder farmers dominating cocoa production. Our aim is to support a landscape-based approach to manage cocoa supply chain impacts and risks, eliminate deforestation, and protect forests and biodiversity by including smallholder farming communities.
Our ambition to turn agriculture into a force for forest protection is gaining momentum with many of our deals now working through &Green transition plans and meeting specified milestones. For example, PT Dharma Satya Nusantara TBK (DSNG) achieved all their ESAP milestones during 2023, and within the first three years of our loan, marking a crucial step towards transformational change for the company and setting them aside as a sustainability champion in the Indonesian palm oil sector.
Operational Highlights
While the financial performance of 2023 was impacted by heightened credit risks across the portfolio, the main concern was the first Non-Performing Loan (NPL) &Green has had and the resulting chapter 11 process that this borrower, Mercon Group, entered into at the end of the year. As the Board of a credit fund, we understand the inevitability of losses. However, we were disheartened to see the speed of the decline of such a strategically relevant actor (top-10 globally) in the coffee sector. We are nonetheless comfortable that the team has managed the process well, and we take important lessons from the process which we can apply going forward. &Green is set up to make bold investments, however as an evergreen fund we also want to be sure that we are constantly learning and improving processes and decision-making as we go. Related, as carrying costs for all commodities have amplified with interest rate increases, the financial results of FS and Marfrig as at the end of the year also resulted in the credit risk on those two borrowers increasing sufficiently to warrant material increases in their provisions for impairment. These are expected to reverse in the short term, given the subsequent performance of both businesses and the trajectory of the related commodities. Besides these transactions, the rest of the portfolio remains performing and in line with expectations.
Operating costs were effectively managed, coming in 9% under budget, demonstrating our commitment to financial discipline and efficiency. This contributed to a 41% increase in the Fund’s operating result to USD 3.7 million, before financing costs of USD 1.8 million and the changes in ECL provisions. The increases in the ECL provisions are the major contributor to the negative net result of USD 18.1 million which resulted in the negative net asset value of USD 5.4 million at the end of the year. The volatility in ECL provisions was expected when this IFRS 9 compliant approach was adopted in 2021 as the most prudent option. These 2023 increases in the provision are reasonably expected to reverse in the short term, thereby returning the NAV to positive territory and retaining the Fund’s commitment to preserving the value of the Contributors capital.
We continue to manage credit risk closely. While operational performance improved in 2023, the significant increase in impairment provision negatively affected the Fund’s financial performance. We could expect a full impairment of Mercon Group during 2024, but outside of that our outlook for next year remains positive with new transactions coming onboard.
The Board met quarterly throughout the year and had the pleasure of meeting twice in person (February and May) and continues to work strongly together.
Looking Ahead
With the strategic groundwork laid, &Green is able to step up its outreach to private investors in 2024. The next steps for 2024 involve building out our market presence further in preparation for a scale-up of capital and working with the Green Climate Fund to appropriately allocate their funding.
In 2024 we will focus on demonstrating to the investment community how our investments generate positive biodiversity impact exactly where it is needed. Although biodiversity is difficult to quantify due to the complexity and variability of ecosystems interacting in intricate ways, our approach through our Forest and Biodiversity Framework is well-positioned to show an actionable way to manage risks and quantify impacts when investing in these critical landscapes globally. Our biodiversity metrics are designed with both the risk context and impact objectives for each transaction in mind to bring tangible impact to the market.
We will continue diversifying our portfolio in 2024 and hope to add new relevant supply chains and countries where our thesis is relevant.
Finally, we remain committed to the highest level of transparency. Our website and reports, most of which are publicly accessible, will continue to offer stakeholders the opportunity to engage meaningfully with our approach and portfolio.
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The &Green Approach
WHERE we invest
Our focus sectors, Geographies & Borrowers
&Green’s target global sectors are linked to land degradation and deforestation. Sectors include agriculture (palm oil, soy, coffee, cocoa among others), cattle/dairy, and plantation forestry (such as rubber).
CATTLE
PALM
RUBBER
SOY
FORESTRY
COFFEE
We concentrate in selected geographies where globally significant commodity value chains are active and there is a clear risk of them being a driver of deforestation , today or in the near future. &Green finances transactions where there is a clear investment rationale for how our financing will play a demonstrative role in de-linking deforestation and land degradation from commodity production in a way that is commercially attractive. This investment rationale leads to blueprint transactions, which the industry can scale.
Our current investment portfolio – geography and commodities; at the end of 2023.
&Green’s portfolio is spread across 5 countries (Indonesia, Brazil, Colombia, Vietnam and Ivory Coast) and five sectors (Coffee, Palm Oil, Cattle, Cocoa and Soy). To mitigate portfolio concentration risk and minimize the potential impact of sector or country volatility, &Green aims to diversify its geographic exposure in the coming years. This strategy aligns with the principles of best fund management practices.
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SCOPE
Volume and quality of forest and/or potential of the jurisdiction hold substantial importance on a global scale.
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AMBITION & STRATEGY
Jurisdiction has a clear strategy with targets to track deforestation reduction against historical trends.
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PROGRESS
Jurisdiction’s strategy shows timely progress towards milestones on the path to achieving deforestation reduction targets.
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MRV
Jurisdiction has transparent monitoring, measuring, reporting, and verifying deforestation reduction systems. Forest and peat degradation systems where applicable.
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SOCIAL & ENVIRONMENTAL SAFEGUARDS
Jurisdiction demonstrates progress implementing the Cancun Agreement .
Vietnam
Zambia
Laos
Indonesia
Colombia
Brazil (Para)
Brazil (Mato Grosso)
Ecuador
Democratic Republic of the Congo
Gabon
Cote d'Ivoire
Brazil (Tocantins)
&Green is interested in investing in all jurisdictions that contain tropical forest biomes. The following list of jurisdictions has been positively reviewed by &Green’s proprietary assessment process testing for favourable regulatory frameworks for forest protection.
HOW WE INVEST
OUR FINANCING PROPOSITION
The &Green team assists borrowers develop credible landscape plans to generate economic, social and environmental value in geographies that hold critical importance for local communities, food security, biodiversity and the global climate.
Tailored financial terms
A long-term partnership
Supporting the borrower to be a climate champion
A transition strategy through &Green’s Landscape Protection Plan
Capturing the Environmental and Social integrity of the borrower
The &Green team assists clients develop credible landscape, plans to generate economic, social and environmental value in geographies that hold critical importance for local communities, food security, biodiversity and the global climate.
REPORTING AND MONITORING
IMPACT MANAGEMENT FRAMEWORK AND ENVIRONMENTAL & SOCIAL MANAGEMENT SYSTEM (ESMS)
&Green relies on a series of tools and processes to gauge transformation and to monitor impact in each transaction.
The Environmental and Social Management System (ESMS) outlines a systematic approach to integrating environmental and social considerations into the investment process. This ensures that each step, from initial screening to final investment exit, adheres to established environmental and social standards. The ESMS is tailored to the nature and scale of the fund’s activities, and the magnitude of environmental and social risks and impacts associated with each investment. It includes tools, templates, and guidelines that are cross-referenced and accessible digitally, ensuring that all stakeholders understand their roles and responsibilities.
The Fund’s approach to impact management follows the guidelines set by the UNEP World Conservation Monitoring Centre (UNEP-WCMC). Renowned for its expertise in biodiversity and the intersection of nature with society and the economy, UNEP-WCMC’s guidance underpins the robustness of this framework. Furthermore, the definitions, methodologies, and tools used in our ESMS are in sync with leading initiatives like the Taskforce on Nature-related Financial Disclosures (TNFD) and the Accountability Framework initiative (AFi). At the core of &Green’s approach to ensuring the integrity and consistency of its impact data is the sophisticated Measurement, Reporting, and Verification (MRV) system. This system plays a pivotal role in gathering, consolidating, and presenting high-quality data, which is integral to &Green’s Impact Framework. The process begins with data collection by the borrowers, followed by reporting to &Green, and culminates in an annual independent verification to validate the data’s accuracy and reliability. The MRV system is instrumental in providing the necessary data that reflect the effectiveness of &Green’s investments in achieving their environmental and social objectives.
Raw, verified data collected by &Green is aggregated at the portfolio level and translated into meaningful insights—Operational Performance Indicators (OPIs) and Key Performance Indicators (KPIs). These indicators serve as the key metrics through which &Green assesses and communicates its impact. While KPIs provide a high-level view of the fund’s overall performance, OPIs offer more detailed insights into operational aspects.
&Green also uses a real-time satellite monitoring system to track forest dynamics within the landscapes it operates.
&Green’s approach to understanding its environmental and social impacts involves comprehensive data collection. For environmental assessments, satellite monitoring is used to evaluate forests, woodlands, and peatlands, focusing on land use management—whether land is preserved, restored, or used for agriculture. The social impact assessment, on the other hand, concentrates on identifying the beneficiaries of initiatives, community services and training aligned with NDPE standards, improvements in land ownership security. These efforts collectively reflect &Green’s dedication to enhancing the area’s climate resilience.
KPI FRAMEWORK
For each investment, the most suitable indicators are identified to track the transformational change sought to generate evidence.
The identified indicators demonstrate progress towards the vision outlined in the Landscape Protection Plan, tracking both quantitative impact and its contribution to supply chain, sector, and business transformation.
STANDARD-RELATED ELEMENTS OF &GREEN’S ESMS
Click on the respective underlined elements to view more information:
PRINCIPAL ADVERSE IMPACTS STATEMENT
&Green considers Principal Adverse Impacts of its investment decisions on sustainability factors as part of its investment due diligence process and procedures. For sustainable investments, it means ensuring that the investments do no significant harm to any environmental or social objective.
LPP
The Landscape Protection Plan (LPP) is a comprehensive, long-term land use and management plan jointly developed by the prospective borrower, &Green, and key stakeholders. The LLP assesses the borrower’s operational baseline and evaluates the potential impact of the proposed transaction. In addition, the LPP plays a crucial role as part of &Green’s impact driven approach. The LPP sets impact targets and milestones for the loan duration, outlined in an Environmental and Social Action Plan (ESAP) that ensures compliance with IFC Performance Standards (and sustainable supply chain standards).
The LPP acts as the ‘overarching plan’ for borrowers to fulfill the NDPE , the Forest & Biodiversity Framework, E&S compliance and other sustainable supply chain standards.
Borrower LPP and ESAP commitments are published on the &Green website and rigorously monitored. These requirements mitigate risks and enhance long-term sustainability for investors and borrowers alike.
NDPE
The No Deforestation, No development of Peatlands, and No Exploitation (NDPE) is a public commitment made by our borrowers to ensure that their operations are sustainable. This commitment ensures that there is no deforestation, peatland destruction, or exploitation of Indigenous People within their business operations and supply chains.
A combined investment approach risk-and impact-based approach completes the NDPE policy:
- The risk-based approach ensures borrowers are aligned with &Green’s vision within the approved jurisdictions and throughout their global operations.
- The impact-based approach, looks forward, and delivers impact for both the borrower and sector. The building blocks include the financial and sustainability requirements applied to all transactions within &Green’ eligible jurisdictions.
TASKFORCE ON NATURE-RELATED DISCLOSURE (TNFD)
&Green Fund is an early adopter of the Taskforce on Nature-related Financial Disclosures (TNFD), reflecting our commitment to leadership in transparency and sustainable investment practices. We have produced a comprehensive Climate and Biodiversity Report following the TNFD recommendations, which details how we integrate nature-related considerations within our operations. The report provides an overview of our Sustainability Governance as well as details of our advanced systems for monitoring and managing nature-related risks and impacts.
Gender Framework
In 2023, a gender framework was developed to apply a gender lens in the investment process. All deals will be categorized as either ‘Gender Sensitive’, or, where we see an opportunity, ‘Gender Transformative’.
Gender sensitive approach
Makes part of the risk-based approach of &Green, verifying that borrowers are committed to avoiding activities that are opposed to the Fund’s vision. This approach is streamlined through the IFC Performance Standards compliance, NDPE considerations and Exclusion List alignment. The gender screening aims to scope future due diligence that will:
- Identify the different roles, circumstances, and opportunities of female and male farmers/workers/managers
- Identify the different stakeholders in the value chain/landscape and how they influence the existing gender dynamics
- Identify how these roles, circumstances, and opportunities contribute to transaction’s impacts
- Identify how &Green’s transaction itself may improve or deteriorate these circumstances and opportunities
Gender transformative approach
Contributes to achievement of Transformational Change. If there is a potential to its application, during the screening it is important to scope the future due diligence that will:
- Conduct a gender analysis study
- Establish the gender baseline for the LPP
- Deep dive into potential gender issues such as representation in value chain, leadership positions, capacity to leverage gender issues, financial literacy
- Integrate gender-specific targets, outcomes, and activities into the ESAP
The gender framework has been integrated into the Fund’s investment process and will be fully operationalized in January 2024. To prepare for the implementation of the Gender Framework, the team received Gender Lens training by gender experts from Ibis Consulting. The training delved into essential gender concepts, regulatory frameworks, and the practical application of a gender lens within the investment landscape. Crucially, discussions also encompassed Gender-based Violence (GbV) and Sexual Exploitation, Abuse, and Harassment (SEAH), reflecting the Fund’s commitment to mitigating associated risks. Moreover, the consultant crafted detailed gender profiles, furnishing pertinent data tailored to each of the Fund’s focus countries and their respective supply chains. These profiles not only offer insights into relevant policies and regulations but are also slated for integration into the JECA process moving forward, ensuring a holistic approach to gender considerations in the Fund’s operations.
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The Investment Advisor
SAIL Investments
Sail Investments (SAIL) is a global private markets asset manager headquartered in the Netherlands. SAIL finds transformational opportunities for investors seeking to drive positive change and achieve attractive, long-term total returns.
The investment firm integrates environmental and social returns into the investment strategy to build asset portfolios at scale. Our portfolios strive to generate compounding impact and economic returns by implementing our transformational change approach, exemplified in the &Green Fund.
SAIL is &Green’s trusted partner and advisor since July 2017 and identifies, prepares, structures, executes and monitors investments. SAIL is also responsible for &Green’s partnerships with co-investors, fundraising and investor relations activities.
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The Portfolio
OUR INVESTMENTS
With one new investment made in 2023, the &Green portfolio now comprises eight transactions:
The ‘hard numbers’ of &Green’s impact journey are in the Annual Impact Report of this report. We have purposely put all the numbers in one place, just before the financial numbers, so that there is one dedicated place where you can always find them.
This Portfolio section provides the stories behind those numbers. The &Green portfolio reflects the investment mandate, which focuses &Green on the major sectors and jurisdictions that are linked to deforestation – for example, cattle and soy in Brazil and Colombia, cocoa in Côte d’Ivoire, palm oil in Indonesia. This, and other transactions in the pipeline in other agricultural commodity supply chains and in different countries, provide excellent opportunities at scale to deliver &Green’s investment mandate.
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Fund Performance
2023 NET RESULT BRIDGE
However, the provisioning for impairment under the prudent Expected Credit Loss (ECL) method increased by USD 24 million, having a negative impact on the Fund’s financial performance for the year. The increase in the provision was primarily due to the increase in the credit risk with respect to the loans to Mercon, FS and Marfrig. This resulted in the loan to Mercon, which was in chapter 11 proceedings in the US bankruptcy court at the end of the year, being recategorised from stage 1 to stage 3, and the loans to HDL and Marfrig were all recategorized from stage 1 to stage 2 in accordance with the Fund’s ECL Impairment policy and model. As a result, the provisions for potential impairment of the Mercon, FS and Marfrig loans increased from their respective 12 month ECLs to their lifetime ECLs. This resulted in an increase in the Mercon provision by USD 12.6 million, the HDL provision by USD 1.0 million, the FS provision by USD 7.0 million and the Marfrig provision by USD 3.4 million. There was also a 32% increase in financing costs due to the further draw down from FMO in April 2023.
The negative Net Result for 2023 of USD 18.1 million was skewed by the increase in the ECL provision discussed above and slightly offset by the unrealized FX gains primarily relating to the Fund’s Norwegian krone (NOK)-denominated grant contribution (which further depreciated in value by USD 2.5 million over 2023 due to the weakening of the NOK). Operating Costs were well managed to amount to 9% lower than the budget as set by the Board.
This resulted in a negative net asset value of USD 5.4 million at the end of the year. Other than Mercon, the relevant impairment provisions are expected to be sufficiently released in the short term, given the improved business performance of the relevant borrowers. Therefore, it is expected that the Fund’s commitment to preserve contributor’s grants will again be met.
EXPECTED CREDIT LOSS (ECL) IMPAIRMENT METHOD
2023 marked the third year during which the Fund implemented the more prudent ECL method to estimate allowances for expected credit losses and impairments of &Green portfolio investments, and the first year in which it recognized any stage 2 and stage 3 investments. The ECL method categorises investments as either:
Stage 1
Which are Performing Investments with no significant increase in credit risk since investment, and for whom the provision for impairment is equal to the 12 month ECL.
Stage 2
Which are Investments for which the credit risk has significantly increased and the provision for impairment is increased to the Lifetime ECL for the investment.
Stage 3
Which are Credit Impaired Investments for which the Lifetime ECL has been written off.
As at 31 December 2023, four (4) of the investments (Roncador, DSNG, ETG and HSJ) were assessed to be Stage 1. The Marfrig, FS and HDL loans were assessed to move from stage 1 to stage 2 and the Mercon investment was assessed to move from stage 1 to stage 3.
2023 ECL APPLICATION
CASH GENERATION
The net cash inflow generated by &Green’s operations increased by 21% to USD 3.1 million which is now available for further investment into the portfolio. The cash returns that were generated by the investment portfolio comfortably financed the operating expenses and financing costs in 2023. The USD 14 million investment facility that was drawn down from Contributors was primarily used to finance the USD 18 million invested in ETG during 2023 (and the further USD 12 million invested in ETG as a subsequent event in early 2024). The further USD 1 million development finance capital that was drawn down from Contributors was used to finance the development capital facility to Belterra.
CAPITAL
During 2023 &Green drew down the second USD 14 million of the USD 31.5 million concessional debt facility from the British government’s Mobilising Finance for Forests fund (MFF) managed by the Dutch development bank, FMO. The financing costs, including the interest and monitoring fees, increased the cost base of the Fund, but were comfortably covered by the investment income from the portfolio of &Green. An additional USD 1 million was drawn down from the development capital facility also made available by MFF, which does not bear any financing costs.
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Funding
CURRENT CONTRIBUTORS
The total contributions made to &Green as of December 2023 amount to
USD 360 million
USD 100 million
USD 58 million
USD 25 million
USD 2 million
USD 180 million
PARTNERSHIPS AND ALLIANCES
&Green has fostered strategic partnerships which elevate its mission and add critical safeguards to the underlying &Green portfolio. Ultimately the &Green approach and investment process can be quicker, smarter and more inclusive if strong field-level and global partnerships and alliances are built.
&Green is continuously building an active network of partners in the areas where it is investing. Partners such as IDH Sustainable Trade Initiative, The Nature Conservancy, and the World Wildlife Foundation are often our first call in a new region or when dealing with a new supply chain. By building strong, trusting relationships with these and other similar partners &Green: gains valuable market intelligence from the field, is steered towards opportunities, can learn from the past, and often finds a partner willing to engage in its transactions. An example of this is how IDH partnered with &Green and Marfrig.
Furthermore, &Green’s landscape approach requires participation from more than just the &Green borrower and its supply chain. To safeguard the broader landscape, &Green works and commits borrowers to working in close collaboration with existing initiatives and local organizations. Although &Green does not engage local government or regulators itself – our role is to be a frontrunning investor in these landscapes, but not a convenor or lobbyist – our partners are often working together with these actors within a landscape, and &Green helps them in approaching and navigating the stakeholder universe in their respective landscapes. The primary goal for &Green is to make sure that borrowers are supported by strong partnerships that increase the likelihood of delivering on ambitious commitments and therefore to reduce the risk of our investments.
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Governance
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Investment Outlook
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ANNUAL IMPACT KPIs
KPI REPORTING
| KPIs 2023 | DSNG | RONCADOR | MARFRIG | HSJ | FS | HDL | TOTAL |
|---|---|---|---|---|---|---|---|
| Forest Protected (ha) | 9,452 | 64,366 | 2,259,589 | 2,302 | 847,779 | 960 | 3,117,013 |
| Climate Benefits (tCO2e) | 53,380 | 354,798 | 9,975,240 | 59,186 | 2,775,969 | 17,227 | 13,235,800 |
| Ecosystems with Improved Resilience (ha) | 86,564 | 116,351 | 2,259,589 | 13,981 | 862,960 | 6,188 | 3,345,634 |
| People with Increased Resilience (#) | 26,533 | 441 | 6,008 | 1,016 | 2,097 | 26,557 | 62,652 |
| People Benefitting (#) | 29,008 | 441 | 7,275 | 1,016 | 2,097 | 28,380 | 68,217 |
| Capital Mobilized (USD Million) | 623.7 | 106.7 | 10,655.6 | 0.9 | 571.1 | 1.0 |
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&Green Vocabulary
AFi
Accountability Framework initiative
Aval GANSO
The Aval GANSO is a Colombian certification programme developed by GANSO in collaboration with the International Center for Tropical Agriculture (CIAT).
Blueprints
Blueprints are sustainable practices that our clients adopt to create impact and which are replicable by other participants in the same market, thereby leading to Transformational Change. Replicable means that the Blueprints can be implemented by other participants in the same market/sector as our clients (and possibly other similar sectors), i.e. once our clients have shown it can be done, others will replicate. To be replicable, projects must also be commercially viable.
CPO
Crude Palm Oil
Cancun Agreements
The Cancun Agreement is a global agreement that was signed in 2010 at the 16th Conference of the Parties (COP16) in Cancun, Mexico. It aimed to strengthen the global response to climate change by taking a range of actions, including setting up a Green Climate Fund and making commitments to reduce emissions.
Center for Tropical Agriculture CIAT
The International Center for Tropical Agriculture (CIAT) is a not-for-profit organization that conducts socially and environmentally progressive research aimed at reducing hunger, poverty and preserving natural resources in developing countries
Deforestation
Deforestation means the clearance of natural forests, including through fires, typically for the purpose of taking commercial advantage of the cleared land. Although Deforestation is often illegal, it can, in some cases, be in compliance with local law.
E&S
E&S is a term used often in the development finance space referring to Environmental & Social
E&S risk category
&Green categorizes its investments into one of three categories: A (high potential for adverse social or environmental impacts); B (adverse social or environmental able to be mitigated); or C (minimal or no adverse social or environmental impacts). It uses a categorization process that identifies and scores potential environmental and social risks and is aligned with the categorization of projects under the IFC Performance Standards. The Facility’s full categorization process for projects is set out in the &Green Environmental and Social Guidelines available on the &Green website.
ESAP
An Environmental and Social Action Plan (ESAP) is a detailed plan implemented by our clients to address gaps in their practices which, when closed, will mean they comply with international standards, specifically the IFC PS. This ensures that the project’s E&S risks are identified and well managed.
ESMS
Environmental and Social Management System (ESMS) is an internal system which we require from our clients to manage their E&S risks and to develop approaches to mitigate these risks.
Ecosystem Solutions
Ecosystem Solutions are the benefits that humans derive from the world’s stocks of natural assets (Natural Capital). The most obvious Ecosystem Solutions include the food we eat, the water we drink and the plant materials we use for fuel, building materials and medicines. There are also many less visible Ecosystem Solutions such as the climate regulation and natural flood defenses provided by forests, the billions of tonnes of carbon stored by peatlands, or the pollination of crops by insects.
Eligible jurisdictions
Eligible jurisdictions are those jurisdictions in which &Green may invest because they have met the Fund’s Jurisdiction Eligibility Criteria (JEC) and have been approved by the Advisory Board.
Extractive production
Unsustainable production of agricultural commodities.
FFB
Fresh Fruit Bunches
GHG
Greenhouse Gases
GIS
Geographic Information System
HCV/HCS
High Conservation Value (HCV) / High Carbon Stock (HCS) means areas that are important for conservation (environmental values) and livelihoods (social values) and for which it is important that no-deforestation commitments apply in order to protect biodiversity.
ICL
Integration Crop and Livestock model.
IFC PS
The International Finance Corporation Performance Standards (IFC PS) set out international standards for managing environmental and social risks and are recognized as the gold standard by many international investors and development banks.
IP
Indigenous People (IP) means the communities that are considered indigenous to a Landscape in which a client operates.
JECA
Jurisdictional Eligibility Criteria Assessment
Jurisdiction
Jurisdiction means a country, region or province which &Green would consider investing in.
LPP
A Landscape Protection Plan Is a roadmap to Transformational Change contractually agreed with our clients to achieve Environmental & Social compliance and create impact.
Land Acquisition
Land Acquisition means the expansion of the land area on which a client operates through the purchase of new land from others.
Landscape
Landscape is the Project Area from which &Green’s Environmental and Social Return are to be derived and includes areas with direct and indirect influence from the client.
MRV
Monitoring, Reporting and Verification
NDPE
A No Deforestation, No Peat and No Exploitation (NDPE) commitment is a public commitment by our clients in order to make their operations sustainable. The commitment should pledge to have zero-deforestation, peatland destruction or exploitation of indigenous people in the operations and supply chain of their business.
Natural Capital
Natural Capital can be defined as the world’s stocks of natural assets which include geology, soil, air, water and all living things. It is from this natural capital that humans derive a wide range of services, often called Ecosystem Services, which make human life possible. The most obvious Ecosystem Services include the food we eat, the water we drink and the plant materials we use for fuel, building materials and medicines. There are also many less visible Ecosystem Services such as the climate regulation and natural flood defenses provided by forests, the billions of tonnes of carbon stored by peatlands, or the pollination of crops by insects.
Net Gain Framework
The Net Gain Framework (NGF) is a strategy developed by the International Finance Corporation (IFC) to address the sustainability of business investments. The NGF is based on the idea that any investment should generate economic returns, and have a positive environmental and social impact. The NGF encourages businesses to think beyond traditional financial returns and consider the broader impacts of their activities.
Peatlands
Peatlands are wetland ecosystems in which waterlogged conditions prevent plant material from fully decomposing. They have the highest store of global soil carbon.
Principal Adverse Impacts
Negative, material, or likely to be material effects on sustainability factors that are caused, compounded by, or directly linked to investment decisions and advice performed by the legal entity.
RSPO
The Roundtable on Sustainable Palm Oil (RSPO) aims to transform markets to make sustainable palm oil the norm. It is the leading global palm oil certification.
Regenerative production
Regenerative agriculture broadly refers to the adoption of production practices that, among other benefits, improve water and air quality, enhance ecosystem biodiversity, produce nutrient-dense food, and store carbon to help mitigate the effects of climate change.
SBTI
Science-based targets offer companies a clearly defined path to lower emissions in accordance with the goals of the Paris Agreement.
Technical Assistance (TA)
Technical Assistance (TA) is grant funding assistance provided to a (prospective) client for expert assessment. Assessments guide process and practice improvement.
Transformational Change
&Green’s Transformational Change entails a shift from a current system to a fundamentally new system that thereafter forms the mainstream. Transformational Change can be achieved by accelerating change, and/or inducing change which catalyzes further changes. It enables &Green to realize its vision of sustainable deforestation-free and socially inclusive agricultural commodity supply chains in the Tropics.
AFi
Accountability Framework initiative
Aval GANSO
The Aval GANSO is a Colombian certification programme developed by GANSO in collaboration with the International Center for Tropical Agriculture (CIAT).
Blueprints
Blueprints are sustainable practices that our clients adopt to create impact and which are replicable by other participants in the same market, thereby leading to Transformational Change. Replicable means that the Blueprints can be implemented by other participants in the same market/sector as our clients (and possibly other similar sectors), i.e. once our clients have shown it can be done, others will replicate. To be replicable, projects must also be commercially viable.
CPO
Crude Palm Oil
Cancun Agreements
The Cancun Agreement is a global agreement that was signed in 2010 at the 16th Conference of the Parties (COP16) in Cancun, Mexico. It aimed to strengthen the global response to climate change by taking a range of actions, including setting up a Green Climate Fund and making commitments to reduce emissions.
Center for Tropical Agriculture CIAT
The International Center for Tropical Agriculture (CIAT) is a not-for-profit organization that conducts socially and environmentally progressive research aimed at reducing hunger, poverty and preserving natural resources in developing countries
Deforestation
Deforestation means the clearance of natural forests, including through fires, typically for the purpose of taking commercial advantage of the cleared land. Although Deforestation is often illegal, it can, in some cases, be in compliance with local law.
E&S
E&S is a term used often in the development finance space referring to Environmental & Social
E&S risk category
&Green categorizes its investments into one of three categories: A (high potential for adverse social or environmental impacts); B (adverse social or environmental able to be mitigated); or C (minimal or no adverse social or environmental impacts). It uses a categorization process that identifies and scores potential environmental and social risks and is aligned with the categorization of projects under the IFC Performance Standards. The Facility’s full categorization process for projects is set out in the &Green Environmental and Social Guidelines available on the &Green website.
ESAP
An Environmental and Social Action Plan (ESAP) is a detailed plan implemented by our clients to address gaps in their practices which, when closed, will mean they comply with international standards, specifically the IFC PS. This ensures that the project’s E&S risks are identified and well managed.
ESMS
Environmental and Social Management System (ESMS) is an internal system which we require from our clients to manage their E&S risks and to develop approaches to mitigate these risks.
Ecosystem Solutions
Ecosystem Solutions are the benefits that humans derive from the world’s stocks of natural assets (Natural Capital). The most obvious Ecosystem Solutions include the food we eat, the water we drink and the plant materials we use for fuel, building materials and medicines. There are also many less visible Ecosystem Solutions such as the climate regulation and natural flood defenses provided by forests, the billions of tonnes of carbon stored by peatlands, or the pollination of crops by insects.
Eligible jurisdictions
Eligible jurisdictions are those jurisdictions in which &Green may invest because they have met the Fund’s Jurisdiction Eligibility Criteria (JEC) and have been approved by the Advisory Board.
Extractive production
Unsustainable production of agricultural commodities.
FFB
Fresh Fruit Bunches
GHG
Greenhouse Gases
GIS
Geographic Information System
HCV/HCS
High Conservation Value (HCV) / High Carbon Stock (HCS) means areas that are important for conservation (environmental values) and livelihoods (social values) and for which it is important that no-deforestation commitments apply in order to protect biodiversity.
ICL
Integration Crop and Livestock model.
IFC PS
The International Finance Corporation Performance Standards (IFC PS) set out international standards for managing environmental and social risks and are recognized as the gold standard by many international investors and development banks.
IP
Indigenous People (IP) means the communities that are considered indigenous to a Landscape in which a client operates.
JECA
Jurisdictional Eligibility Criteria Assessment
Jurisdiction
Jurisdiction means a country, region or province which &Green would consider investing in.
LPP
A Landscape Protection Plan Is a roadmap to Transformational Change contractually agreed with our clients to achieve Environmental & Social compliance and create impact.
Land Acquisition
Land Acquisition means the expansion of the land area on which a client operates through the purchase of new land from others.
Landscape
Landscape is the Project Area from which &Green’s Environmental and Social Return are to be derived and includes areas with direct and indirect influence from the client.
MRV
Monitoring, Reporting and Verification
NDPE
A No Deforestation, No Peat and No Exploitation (NDPE) commitment is a public commitment by our clients in order to make their operations sustainable. The commitment should pledge to have zero-deforestation, peatland destruction or exploitation of indigenous people in the operations and supply chain of their business.
Natural Capital
Natural Capital can be defined as the world’s stocks of natural assets which include geology, soil, air, water and all living things. It is from this natural capital that humans derive a wide range of services, often called Ecosystem Services, which make human life possible. The most obvious Ecosystem Services include the food we eat, the water we drink and the plant materials we use for fuel, building materials and medicines. There are also many less visible Ecosystem Services such as the climate regulation and natural flood defenses provided by forests, the billions of tonnes of carbon stored by peatlands, or the pollination of crops by insects.
Net Gain Framework
The Net Gain Framework (NGF) is a strategy developed by the International Finance Corporation (IFC) to address the sustainability of business investments. The NGF is based on the idea that any investment should generate economic returns, and have a positive environmental and social impact. The NGF encourages businesses to think beyond traditional financial returns and consider the broader impacts of their activities.
Peatlands
Peatlands are wetland ecosystems in which waterlogged conditions prevent plant material from fully decomposing. They have the highest store of global soil carbon.
Principal Adverse Impacts
Negative, material, or likely to be material effects on sustainability factors that are caused, compounded by, or directly linked to investment decisions and advice performed by the legal entity.
RSPO
The Roundtable on Sustainable Palm Oil (RSPO) aims to transform markets to make sustainable palm oil the norm. It is the leading global palm oil certification.
Regenerative production
Regenerative agriculture broadly refers to the adoption of production practices that, among other benefits, improve water and air quality, enhance ecosystem biodiversity, produce nutrient-dense food, and store carbon to help mitigate the effects of climate change.
SBTI
Science-based targets offer companies a clearly defined path to lower emissions in accordance with the goals of the Paris Agreement.
Technical Assistance (TA)
Technical Assistance (TA) is grant funding assistance provided to a (prospective) client for expert assessment. Assessments guide process and practice improvement.
Transformational Change
&Green’s Transformational Change entails a shift from a current system to a fundamentally new system that thereafter forms the mainstream. Transformational Change can be achieved by accelerating change, and/or inducing change which catalyzes further changes. It enables &Green to realize its vision of sustainable deforestation-free and socially inclusive agricultural commodity supply chains in the Tropics.
13
Annexes
ANNUAL FINANCIAL REPORT
Click on the icon to read and download our audited 2023 Annual Financial Report.
NATURE & BIODIVERSITY REPORT
Click on the icon to read and download our 2023 Nature & Biodiversity Report.
