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Danone, Mars join to support sustainable sourcing

Danone and Mars have announced the creation of an investment fund aimed at helping companies to learn how to sustainably source the materials they need from smallholder farmers while at the same time delivering large-scale social and economic impact to those farmers and their communities. The Livelihoods Fund for Family Farming (Livelihoods 3F) will implement […]

Danone and Mars have announced the creation of an investment fund aimed at helping companies to learn how to sustainably source the materials they need from smallholder farmers while at the same time delivering large-scale social and economic impact to those farmers and their communities.

The Livelihoods Fund for Family Farming (Livelihoods 3F) will implement projects that will simultaneously restore the environment and put degraded ecosystems back on track while improving the productivity, incomes, and living conditions of small rural farmers in developing countries. Livelihoods 3F aims to invest 120 million euros in the next 10 years to implement projects in Africa, Asia and Latin America.

“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. Financial return for the fund’s investors will be provided by a coalition of private and public third party companies, public utilities, governments, development institutions, etc. that will purchase the goods and positive impacts (such as carbon credits or water savings) generated by the projects.

Investments by Livelihoods 3F will have a triple objective: i) Economic: increase both yields and farmers’ incomes ii) Social: empower farmers, especially women, and improve the livelihoods of farming families iii) Environmental: promote responsible farming practices and technologies that sustainably use natural resources to help enhance the resilience of farms, particularly in the face of climate change. It will provide upfront financing and technical support to NGOs and farmers’ organizations that will implement the projects in the field with farming communities.

“The challenges of sustainable agriculture can be met only if we are able to develop radically different approaches, combining economic, environmental and social objectives,” said Franck Riboud, Chairman of Danone’s Board of Directors. “The best way to find adapted, innovative and concrete solutions is to join forces with other companies, NGOs, government agencies. Besides, it is in this mindset that we created the first Livelihoods carbon fund in 2011. Today, we are launching with Mars, Inc., a second fund dedicated to family farming. It will enable us to work effectively with smallholder farmers in the field to contribute to our overall performance. We invite other companies to join us in these projects.”

“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,” said Victoria B. Mars, Chairman of the Board, Mars, Incorporated. “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. By coming together with Danone, we have a significantly greater chance of success and an opportunity to have meaningful positive impact that will endure.”