Danone, Mars launch sustainability investment fund

by Jeff Gelski
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PARIS — Danone and Mars, Inc. have created the Livelihoods Fund for Family Farming (Livelihoods 3F), an investment fund designed to help companies learn how to sustainably source materials from smallholder farmers, the two companies announced Feb. 4. Livelihoods 3F aims to invest €120 million ($137.1 million) in the next 10 years to implement projects in Africa, Asia and Latin America.

The investments will focus on economic, social and environmental objectives. Economically, they will seek to increase yields and farmers’ incomes. Socially, they will seek to empower farmers, especially women, and improve the livelihoods of farming families. Environmentally, the investments will promote farming practices and technologies that sustainably use natural resources to help enhance the resilience of farms, particularly in the face of climate change.

Livelihoods 3F will provide upfront financing and technical support to non-governmental organizations (NGOs) and farmers’ organizations to implement projects in the field.

“Livelihoods 3F is based on the conviction that sustainable farming, climate change and poverty are closely linked,” said Bernard Giraud, president of Livelihoods Venture, a service company that will implement the fund. “It is an open investment fund. All businesses that want to source agricultural and natural goods in a sustainable and responsible way are encouraged to join us and increase the breadth of our learning and our impact.”

Livelihoods 3F will operate as a mutual investment fund with shared risks and results-based returns. A coalition of private and public third-party companies, public utilities, governments, development institutions, etc. will provide financial return for the fund’s investors. Those in the coalition will purchase the goods and positive impacts, including carbon credits and water savings, generated by the projects.

About 500 million family farmers produce 70% of the world’s food supply, according to Danone and Mars, as family farmers dominate the supply side of markets such as cocoa, coffee and rubber.

Danone in 2011 initiated a Livelihoods fund, a carbon investment fund that nine other companies, including Michelin and Firmenich, eventually joined. The new fund, Livelihoods 3F, will be dedicated to family farming, said Franck Riboud, chairman of the board of directors for Paris-based Danone.

“The challenges of sustainable agriculture can be met only if we are able to develop radically different approaches, combining economic, environmental and social objectives,” he said. “The best way to find adapted, innovative and concrete solutions is to join forces with other companies, NGOs, government agencies.”

Victoria B. Mars, chairman of the board for Mars, Inc., McLean, Va., said, “Delivering quality products that consumers love, and growth we can be proud of as a company, are dependent upon having a sustainable value chain that creates mutual benefit for the farmers that work so hard to produce our agricultural ingredients. Our collaboration with Livelihoods and Danone to kick off this fund is an investment in learning more about what we can do to improve practices and prosperity in small holder farming communities.

“The open fund also presents the opportunity to create real scale by engaging with others. Business has an important role to play in addressing environmental and societal challenges, and by focusing on such long-term investments we believe we can contribute.”
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