US SIF Foundation highlights investment options
to improve economic opportunities for women

Mars, Itau Unibanco, Glanbia Ingredients Ireland Ltd, PureCircle, Yes Bank and B&Q are among the 14 winners at this year’s Responsible Business Awards

On Monday, 29th September 2014, nearly 200 of the world’s leading responsible business experts gathered at Ethical Corporation’s Fifth Annual Responsible Business Awards ceremony in London’s Mayfair.

About 400 entries were received this year, covering a range of sectors and industries from all over the world, in itself reiterating the fact that responsible business is steadily becoming mainstream. The judges were looking for entries that clearly demonstrated how the company had incorporated responsible business and sustainability thinking into various areas of business, linking it back to commercial objectives.

Opening up the Awards Ceremony, chairman of this year’s judging committee Professor David Grayson said that the standard from this year’s entrants had been very high, and that it’s great to see and read about all the great sustainable work that’s being done around the world. More information on the judges’ feedback is available from Ethical Corporation.

This Year’s Winners were:

BEST B2B PARTNERSHIP

Nominees for this category:

Mars Incorporated – Mesquite Creek Wind Farm
Glanbia Ingredients Ireland Ltd (GIIL) – GIIL and Baileys Sustainable Cream Initiative
Agility – A Partner in Logistics Emergency Teams (LETs)
Zip Xpress – Haworth/Zip Xpress

In this category, the judges were looking for a clear commitment to a long-term, mutually beneficial collaboration that can demonstrate real commercial benefits and social/ environmental/governance gains for society.

The Highly Commended company was Mars Incorporated – Mesquite Creek Wind Farm. The judges commented on the entry as “inspirational, innovative, raising the bar for the sector and making a tangible difference on a potential global scale project. We’d like to see Mars incorporate mentoring/sharing of best practices and help other companies take on similar initiatives.”

The winner of this award was a partnership between Glanbia Ingredients Ireland Ltd (GIIL) and Diageo. The judges found the partnership to be “impressive long term, mutually beneficial… with the ongoing effort and wide dairy industry effects.”

BEST BUSINESS/ NGO PARTNERSHIP

Nominees for this category:

Marks and Spencer and Good World Solutions – Leveraging mobile technology for real-time supply chain transparency
Shell and the Global Alliance for Clean Cookstoves
Woolworths and WWF-SA partnerships: Sustainable business initiative
Barclays and Care and Plan UK – Banking on Change
Interface and Zoological Society of London – Net-Works: delivering social, economic and environmental benefits to the Philippines
Central England Cooperative and Saffron Lane Neighbourhood Council – The Saffron Acres Project
Starwood Hotels & Resorts and UNICEF – ‘Check Out for Children’
B&Q and BioRegional and The Sylva Foundation – Good Woods
Turk Telekom (TT) and Bogazici University GETEM and Assistive Technology and Education Laboratory – Books on the phone
SM Prime Holdings – Sensory Friendly Movies

The judges were looking to the same criteria as in B2B Partnership. The only difference here was that the partnership should have taken place between a company and other entities (i.e. NGOs, governmental body, charity or other).

Having perhaps, the longest list of nominees, this category was one of the hardest to choose from. Nevertheless, judges selected a partnership between Barclays, Care and Plan UK with their project Banking on Change as highly commended, stating:

“A unique savings rather than credit-led approach that allows increasing individual savings and financial literacy in undeveloped areas.”

The winner was Interface and Zoological Society of London – Net-Works: delivering social, economic and environmental benefits to the Philippines. The judges gave it the highest appraisals:

“It’s a real social business project, economically successful and one that creates a truly sustainable business model.”

BEST CONSUMER ENGAGEMENT CAMPAIGN (SOCIAL MEDIA AND TRADITIONAL)

Nominees for this category:

CVS Caremark – CVS Quits
Sky – Sky Rainforest Rescue
B&Q – Great British Bee Count – Smart Phone App (B&Q and Friends of the Earth)
Santander – Reduza e Compense CO2
Racold Thermo – Racold Switch2Green
Fashion Revolution – Fashion Revolution

The judges were looking to reward the company that demonstrated how it has chosen a particular issue and campaigned to promote pro-social/greener behaviour via traditional/new media channels. Key indicators were creativity, the importance of the issue(s) chosen and the effectiveness of the campaign through the measurements available.

Although this category wasn’t the longest one, the judges couldn’t limit themselves to selecting just two projects. They decided to pay a tribute to CVS Caremark with its project CVS Quits, justifying their choice by the fact that they were “struck by the boldness of the decision on a major consumer and national issue. It represents an “excellent personal consumer engagement campaign which brings in national leadership.”

Highly Commended in this category was named B&Q – Great British Bee Count – Smart Phone App (B&Q and Friends of the Earth). The judges said of it: “it’s truly a grassroots project, relevant to the business with clear metrics and measurement period. We look forward to learning about the results! Very consumer orientated.”

The Award however went to Santander Brazil – Reduza e Compense CO2.

“Original and tangible public awareness campaign, very much integrated on positive business opportunities, which is also replicable anywhere in the world. The project benefits investors and provides meaning awareness through engagement with citizens” the judges said.

BEST EMPLOYEE ENGAGEMENT

Nominees for this category:

Seventh Generation – LEAD w/Values
Procter & Gamble – Fabric Care
Dell – Dell’s commitment to Corporate Social Responsibility and employee engagement
Bacardi Limited – How Bacardi Limited engages its global employees in sustainability and CR
TD Bank – The 4Hs of Environmental Engagement
The Hongkong and Shanghai Hotels, Limited – Be an inspiration – HSH Group Corporate Responsibility Video-making contest
Anheuser-Busch InBev (AB InBev) – How AB InBev is empowering colleagues to reduce environmental impact across 25 countries and its supply chain
Itau Unibanco – Financial Education at Itau Unibanco: a challenge that begins at home

The judges were looking to reward a company that demonstrated how they engaged with and listened to employees around sustainability policies, and took those ideas on board to refine their sustainability plans, business opportunities and targets.

The Highly Commended company in this case was Seventh Generation. The nominated projects LEAD w/Values was named as “a truly integrated approach with strong learning and benchmarking pillars, also well incentivised by annual bonuses.”

The Winner of this award was Itaú Unibanco with their project Financial Education at Itaú Unibanco: a challenge that begins at home. The award winning project “showed a very clear link back to mainstream business practice. It is a truly integrated engagement on a very crucial issue such as financial literacy.”

BEST PRIVATE COMPANY

Nominees for this category:

Roshan – A Changemaker in 2014
Mars Incorporated
Bankinter – “Tic, Tac, Toe” Sustainability Project
Bacardi Limited – Bacardi Launches Good Spirited; Building a Sustainable Future
SC Johnson – SC Johnson’s journey to zero landfill

This award was aimed at acknowledging the privately-held, unlisted company which has best demonstrated their commitment to embedding sustainable business across. A comprehensive approach, targets across the board and a clear demonstration of top level leadership from the board was vital for this category.

The stakes were high in this category and it was hard to compete with the past Awards winners such as Roshan, Mars Incorporated and SC Johnson.

The Highly Commended was named Roshan – A Changemaker in 2014 as “Roshan is a major economic force in the country with a unique business model that has an effect against all odds.”

Beating all the records, the Award went again to Mars Incorporated for the second consecutive year. “An impressive commitment company, with a number of strong projects across the business” the judges said.

BEST SME

Nominees for this category:

The Mad Monkey Hostel – Social Responsibility As A Core Business Driver
GXT Green – GXT Green and ECOgrade Degradable Bags
Intex Solutions
MBA Polymers – Sustainable Polymer Technology
Elan Hair Design – The UK’s most eco-friendly hair salon

The judges were looking for companies who had created products or services with a clear social/environmental gain alongside a business case. Clear measurable gains rather than pledges to improve were key to winning. Only companies with under 250 employees, that have clearly innovated on sustainability, in 2013 were eligible to enter.

Given a diverse nature of the nominated projects, the judges found it hard to limit themselves on selecting only two nominees. Hence, when announcing the results, the judging committee remarked that “if there was a category for best social enterprise, The Mad Monkey Hostels should have won it. It’s scalable and inspiring.” So The Mad Monkey Hostels received a special mention for their project “Social Responsibility As A Core Business Driver.”

The Highly Commended in this category was Elan Hair Design – The UK’s most eco-friendly hair salon as it’s “a truly compelling business case.”

The Award was given to a company that showed that “sustainability is at the core of their business” and whose “commitment to sustainability is impressive”. In other words, MBA Polymers – Sustainable Polymer Technology.

BEST SUPPLIER ENGAGEMENT

Nominees for this category:

Nestlé – Responsible Sourcing at Nestle
Blackmores – Blackmores Fish Oil Sourcing
Glanbia Ingredients Ireland Ltd (GIIL) – Advisory Function Support of the On-farm Open Source Program
Woolworths – Enterprise development: Farming for the future
Vodafone – best supplier engagement
Lockheed Martin – Lockheed Martin’s Sustainable Supply Chain Management

The award was given to the company that showed clear engagement, both bottom-up and top-down, with suppliers, and was helping suppliers deliver on sustainability goals proactively, and against firm and clear targets.

The Highly Commended in this category was named Woolworths – Enterprise development: Farming for the future. “The project demonstrated a holistic mutually beneficial supplier engagement approach.”

Nestlé’s Responsible Sourcing at Nestlé took the main prize in this category. The judges praised the winning company for making programs very clear and scalable with well-defined standards and targets as well as tracking for now. They also found “Nestlé’s strong commitment to traceability back to source” impressive.

BEST SUSTAINABILITY REPORT

Nominees for this category:

Coca-Cola Icecek – Coca-Cola Icecek 2012 Sustainability Report
H&M – H&M Sustainability Report 2013
The Maersk Group – The Maersk Group’s Sustainability Report 2013
GE – GE Sustainability Report 2013
Legal & General – Housing, Health and Later life matters
Merck – Merck 2012 Corporate Responsibility Report
Nestlé – Nestle in Society: Creating Shared Value and meeting our commitments 2013
Nike – FY12/13 Sustainable Business Performance Summary
Deutsche Telekom – We take responsibility – CR Report 2013
The Co-operative – Sustainability Report 2013

The winner would have to show judges how they are communicating progress whilst being honest about the challenges they face and clear about the business wins their report has achieved for the company. Demonstrating critical stakeholder engagement was a must.

This was a truly hard decision as the judges were debating over the winners for a long time.

The Highly Commended in this category was H&M with their 2013 Sustainability Report. The judges were impressed by their “very clear, honest report. Accessible and easy to extract information.”

The Winner was The Maersk Group with their 2013 Sustainability Report. The judges said that the report showed “good transparency on challenges and achievements. Openly spoken about issues they face with good overview of 2013 performance as well as on their future strategy.”

MOST EFFECTIVE INTERNATIONAL COMMUNITY INVESTMENT

Nominees for this category:

Aviva – Aviva sets the standard for improving lives whilst tackling climate change
KPMG – KPMG’s BRIGHT Programme
Herbert Smith Freehills (HSF) – A fair Deal for Sierra Leone
Twinings – Improving Health, Nutrition and Promoting a Protective Environment for Adolescent Girls on Assam Tea Estates
HP – HP LIFE e-Learning
VimpelCom / Mobilink – Improving Literacy in Rural Pakistan
Monsoon – Barabanki Weavers Project
Tetra Pak – Supporting small holder milk farmers in Bangladesh through the Dairy Hub model
The Co-operative – going ‘beyond Fairtrade’

The judges were seeking a winner that demonstrated genuine commitment to vulnerable communities, and has responded to them meaningfully outside their home market. The challenges of measurement were taken into consideration, but the winning entry would have to have demonstrated measurements of effectiveness and the positive results of their community investment work. The Highly Commended in this category was Twinings, with the submitted project Improving Health, Nutrition and Promoting a Protective Environment for Adolescent Girls on Assam Tea Estates.

The judges recommended it as “quite original, innovative project on a very unique topic”. “Strong collaboration with local and regional government was also shown. Judges commended an integrated Phase I + II approach.”

The Awards in this category was given to Mobilink, which is VimpelCom’s operator in Pakistan for their project Improving Literacy in Rural Pakistan. The judges praised it as “a fantastic program, very scalable with tangible results.”

MOST EFFECTIVE DOMESTIC COMMUNITY INVESTMENT

Nominees for this category:

Sky Academy Skills Studios
Mondelez International – Health for Life
Pure Leapfrog – Pure Leapfrog Community Energy Fund – Moving IRR to SRR
TTNET – Internet4All
PT Bumi Resources – The Self-Reliant Villages Program
Turkcell – “Women Empowerment in Economy” (WEE) project
PT Pertamina EP – Community Investment as Competitive Advantage of PT Pertamina EP Subang Field
Tropicalia – The Accidental Girlfriends
Votorantim Metais – The Future in our Hands: a project with a focus on qualification and inclusion of the youth in the labor market

Being able to show how a community investment strategy to the “home” market has resulted in ‘win-win’ outcomes for both parties in the last two-five years was the main criterion for the judges in this award. The company should have clearly demonstrated how investment has benefitted local communities in a long-term and sustainable way.

Surprisingly, in this category both awards went to the Turkish companies. The Highly Commended was TTNET – Internet4All as “the project demonstrated clear benefits for local communities sustainably and in a long term.”

The Winner was Turkcell, for their “Women Empowerment in Economy” (WEE) project as it is “a project of a significant scale with country level outcomes.”

SUSTAINABILITY COMMERCIALISED

Nominees for this category:

B&Q – One planet home program
MBA Polymers – Sustainable Polymer Technology
Natura – SOU: Why do you need what you don’t need?
Wheelabrator – Green Steam Keeps the Linens Clean
Kebony – The Sustainable Alternative To Tropical Hardwood
Ecolab – Ecolab: Partnering to solve global challenges, sustainably
Net-Works – Net-Works: good for people, the environment and business
GXT Green – GXT Green ECOgrade Degradable, Sustainable, Carryout bags
PureCircle – Empowering the food and beverage industry to drive down impacts through sustainable “better-for-you” ingredient choice

The winner needed to have shown how they created a definitive new product or service from sustainability/CR thinking, but also demonstrated exactly how it has been incorporated into mainstream business thinking across the company.

B&Q seemed to be the judges’ favourite as they were named The Highly Commended in this category as well with their project One planet home program. The judges called it a “unique program offering considerable environmental and commercial benefits.”

The Award went to a stevia producer PureCircle for their project which empowers the food and beverage industry to drive down impacts through sustainable “better-for-you” ingredient choice. “A commercially successful project, important nutrition wise with strong environmental performance” – the judges said.

HEAD OF SUSTAINABILITY OF THE YEAR

Nominees for this category:

Wembley Stadium,  James Huartson
B&Q,  Matt Sexton
YES BANK,  Namita Vikas
Natura Ecoparque,  Denise Alves
PureCircle,  Ajay Chandran

This award would go to the head of sustainability or corporate responsibility who has effectively managed risk, and has also shown how sustainability/CSR related opportunities can be seized by companies and integrated into their business offerings and operations.

This year Head of Sustainability Award was given to Matt Sexton at B&Q. The judges said “Matt Sexton has done the work that everyone is encouraged to do. A very comprehensive approach to sustainability has been demonstrated.”

CEO OF THE YEAR

Nominees for this category:

Seventh Generation,  John Replogle
ITC Hotels,  Nakul Anand
Roshan,  Karim Khoja
Yes Bank,  Rana Kapoor
Zip Xpress,  Dina McKnight
Southwest Airlines,  Gary Kelly

The judges were looking for the business leader who has clearly shown they have led their company effectively in the last 12-18 months on sustainability/CSR issues. The winner needed to demonstrate a clear grasp of both the issues and the need to commit to managing the unknown towards real targets, which demonstrates both sector and individual leadership.

CEO of the year was awarded Rana Kapoor from Yes Bank as “Mr Kapoor has been very vocal about promoting responsible banking in India. This is an excellent model for CEOs today across all industry sectors.”

THE LIFETIME ACHIEVEMENT

This award is for the individual that has dedicated their long career to sustainability/CSR and has a considerable track record of success. They have have been a catalyst for real, proven change. This award was non-entry. This year the Award was given to Mary Robinson.

“Throughout her lifetime, Mary Robinson has embodied the entire spectrum of sustainability, championing economic, social and environmental issues, whether during her time served as President of Ireland, as the UN High Commissioner for Human Rights, or as recently nominated UN special envoy for climate change.”

Ethical Corporation would like to thank the winners and all nominees in participating in this year’s Responsible Business Awards and serving as a great example of making responsible business possible.

For more information about the awards, the judges, the shortlist or the dinner ceremony, contact Elina Yumasheva in London at  elina.yumasheva@ethicalcorp.com  or on +44 (0) 207 375 7573 or visit www.ethicalcorp.com

US SIF Foundation highlights investment options
to improve economic opportunities for women

The US SIF Foundation announced in early October that it has published a new guide for investors seeking to help women achieve parity with men on a number of socioeconomic measures, ranging from access to capital to representation on boards of directors of major corporations.

The guide, Investing to Advance Women ( ), highlights practical strategies that investors can use to increase economic opportunities for women in the United States and around the world.

Investing to Advance Women, written for both institutional and retail investors, outlines options in stocks, mutual funds, fixed income and cash instruments. The guide also provides information on other tools available to investors.

The guide focuses on a variety of areas including:

US SIF Foundation CEO Lisa Woll said, “Nearly 20 years after the Fourth World Conference on Women, women have not achieved parity with men on a wide range of socioeconomic measures. Women’s voices and opportunities are often stifled by societal stereotypes and harmful social norms and beliefs. But a growing body of evidence suggests there is not only a moral argument for investing in women, but a business case as well.”

“This guide is intended to help make investors more aware of their ability to help advance opportunities for women through a range of financial products and through shareowner engagement,” Woll said.

Investing to Advance Women is the fourth publication of the “How Do I SRI” series of practical guidebooks (www.ussif.org/howdoisri ). Each guide focuses on a social or environmental challenge and the strategies through which investors can address it. The series is made possible through funding from the Wallace Global Fund.

About US SIF and US SIF Foundation

The US SIF Foundation, a non-profit 501(c)(3) organization, supports the educational and research activities of US SIF: The Forum for Sustainable and Responsible Investment (US SIF). The US SIF Foundation publishes the biennial Report on Sustainable and Responsible Investing Trends in the United States, as well as topical reports on subjects such as foundations and impact investing, community investing, alternative investments, and the impact of sustainable and responsible investing (SRI). The US SIF Foundation also operates the Center for Sustainable Investment Education, which produces online and live courses, including the Fundamentals of Sustainable and Responsible Investment, and other educational resources to help advance SRI. Details at- www.ussif.org/courses

US SIF: The Forum for Sustainable and Responsible Investment is the US membership association for professionals, firms, institutions and organizations engaged in sustainable, responsible and impact investing . US SIF and its members advance investment practices that consider environmental, social and corporate governance criteria to generate long-term competitive financial returns and positive societal impact. US SIF’s members include investment management and advisory firms, mutual fund companies, research firms, financial planners and advisors, broker-dealers, banks, credit unions, community development organizations, non-profit associations, and pension funds, foundations and other asset owners. Learn more at www.ussif.org

Portfolio 21 has many criteria that we use in our research effort to find the companies that are global leaders in environmental, social, and governance performance.

Periodically, we conduct in-depth topical research to test and update broad sets of our criteria. Portfolio 21 has always had a policy to not invest in agricultural biotechnology companies, and we seek food manufacturers and retailers that demonstrate strong support for the localization of food supplies and promote sustainable farming techniques and organic certification.

Over the past few months, we took a deep dive into genetically modified organisms (GMOs) in global agricultural and food systems in order to evaluate our policy. Our inquiry into this subject led to our new white paper, “The Case Against GMOs: An Environmental Investor’s View of the Threat to our Global Food Systems.”

Portfolio 21’s President, John Streur, made the following comments on what motivated the firm to share this research:

“As we got into our background research, we read of an industry that bullied its critics, overwhelmed government regulators and used the global agricultural and food systems as a source of profits at the expense of many participants. It was disappointing, disturbing and even a little hard to believe. Then, we got a small taste of this treatment ourselves when we were denied permission to use certain data for our report that we had obtained from a pro-GMO public website.”

“The underlying premise of GMOs may actually hold some positives for society, but the way the companies that control this technology use it prevents the potential benefits from being achieved. We are left with many negatives. Portfolio 21 will continue to avoid these companies and our current research strengthens our long held position.”

The report is designed to provide an informative overview of this controversial issue and profile the key findings that support Portfolio 21’s anti-GMO position. Topics covered include the history of industrial agriculture, the regulatory framework of the United States and Europe, and global context for the rapid rise of GMO crops in the developing world.

The Case Against GMOs White Paper – Introduction

Genetically modified (GM) crops have been surrounded by controversy since their first deployment nearly twenty years ago, but have still become the fastest-adopted crop technology in recent history.

In 2012, GM crops were planted on over 420 million acres, and for the first time over half of this area was in developing countries. To give a sense of the scale of this area, all of the 2012 GM crop fields would cover nearly all of the state of Alaska. Over the course of the twenty years since they were introduced, GM crops have been planted on a cumulative 4 billion acres of land, an area roughly the size of Russia.

The steady upward trend of global GM crop adoption is well documented by the International Service for the Acquisition of Agri-biotech Applications (ISAAA), an industry trade group, in its yearly research brief “Global Status of Commercialized Biotech/GM Crops” however, ISAAA denied our request to publish their data in this report.

The adoption rate of these crops is astounding. Tens of thousands of farmers are now reliant on the agricultural biotechnology companies responsible for the sale and development of GM seeds. The GM food produced reaches hundreds of millions of consumers.

And production impacts almost every part of the global food system, from small, independent farmers in South America to the regulatory bodies of the European Union.

The question remains, what exactly are these impacts?

Purveyors of transgenic products claim that GM farming boosts yields and farming incomes by saving on fossil fuels, pesticides, and labor. Another claim arising from this assumption is that GM farming represents a step toward environmental sustainability by decreasing emissions and the use of agricultural chemicals. GM advocates also maintain that these products pose no health risks to either the farmers or consumers.

None of these arguments have held up over extended periods of use or in the face of independent testing. Pesticide and herbicide-resistant crops (by far the most widely used GM varieties) actually lead to an increase in pesticide and herbicide use over time horizons of as little as four years.

Financial gains, which farmers make through increased yields, are offset by increased spending on patented seeds, fertilizer, and herbicides or pesticides, leading to a net decrease in income for all but the largest mega-farms.

These higher input costs are especially damaging when small, more marginal farmers experience crop failure. Elevated levels of bankruptcy and consolidation have frequently occurred following the deployment of GM crops.

Perhaps the most pervasive argument for GM crops is centered on the message that these crops are needed to “feed the world.” The underlying assumptions of this argument, however, are simply incorrect. At current levels of global production, there is enough food for every person on earth to have 3,000 calories per day.

The problem lies with distribution, income, and food waste. GM crops can actually exacerbate hunger issues by pressuring farmers in marginal areas to grow cash crops for export or extensive processing. Farmers who make the switch to GM products usually get an initial increase in their yields, but this can be attributed to the varieties used as a base for the commercially available transgenic varieties. Furthermore, in repeated tests, conventional breeding has been just as or more successful at delivering “climate-ready” crops that incorporate drought or flood resistance.

For environmental, social, and governance (ESG) focused investment strategies, agricultural biotech represents an unacceptable level of risk across a wide range of factors. The problem lies less with individual companies or products, but rather with how GM agriculture in its current iteration jeopardizes the whole agricultural system. Just as these risks are system-based, the consequences would manifest themselves by changing the very biological, economic, and social framework of food systems.

Almost twenty years into the GM experiment, a range of these risks (Environmental, Social, Governance/Regulatory, Reputational, and Financial) have become clear.

When taken together, these risks form a very clear basis for exclusion from an ESG investment strategy. It is important, however, to distinguish between the systemic risk and the risk presented by the technology of genetic engineering. Genetic engineering, in and of itself, is simply a tool. Indeed, it represents an opportunity to change the parameters of agriculture, which could be beneficial if given the proper regulatory framework and directed toward health and sustainability.

In the current market, however, developing genetically modified organics (GMOs) demands massive investments, which then drives the need for massive returns. When looking at the small number of transgenic technologies in use today, it becomes apparent that the nature of selection favors a certain set of corps that are best suited to large-scale, mechanized cultivation. This is amplified by the leveraging of intellectual property rights over seeds, planting materials, and tools used for genetic engineering. In its current state, the main goal of GM agriculture is to increase sales of seeds and certain agro-chemicals.

From Portfolio 21

All investments include risk and have the potential for loss as well as gain. Our investment strategy generally includes investments in foreign securities, which are subject to the risks of currency fluctuations, differing accounting standards, as well as political and economic instability, particularly when investing in emerging markets. Our environmental, social, and governance (“ESG”) policies could cause us to make or avoid investments that may result in underperforming similar portfolios that do not have an ESG policy. Diversification does not assure a profit or protect against a loss.

Portfolio 21 (www.portfolio21.com ) provides this message to convey general information about our firm’s investment philosophy and not for the purpose of providing investment advice. You should consult an advisory representative of Portfolio 21 for investment advice regarding your specific situation.

Rockcastle County, KY – Iroquois Valley Farms, LLC, a food and farmland Company investing in organic and local agriculture, has purchased its first Kentucky farm. That makes Kentucky the sixth state in which the Company owns farms. Healing Ground Farm is 120 acres of pasture and tillable fields on which brothers Fred and Michael Lewis, also U.S. Veterans, are using organic practices to produce healthy foods, including pastured livestock and a diversified vegetable operation. They share Iroquois Valley Farms vision of returning the soil to a naturally healthy and productive state.

“We have two distinct things we work on,” says Mr. Michael Lewis, “sustainability and nutrition.” Healing Ground Farm will train Veterans and others, including the disabled, to be sustainable farm entrepreneurs. They do this in conjunction with Growing Warriors, a non-profit whose mission is to equip, assist and train military Veterans with the skills they need to produce high quality, organically grown produce for their families, community and country.

David Miller, Iroquois Valley Farms Co-founder/CEO stated, “Returning veterans that have served our country are now serving their local communities and are a powerful voice in this battle to protect our environment and foods. We are excited to announce the purchase of Healing Ground Farm and support the Lewis brothers and Growing Warriors in this important mission. This purchase fundamentally supports our commitment to restoring healthy farming practices.” The Lewis brothers themselves have worked across the country on behalf of farm communities, advocating scalable local economies centered on local food production. From Healing Ground Farm, they will foundationally impact future development of Kentucky’s local and organic foods infrastructure.

Supporting that infrastructure is the capstone leadership development program of the Leadership Louisville Center, The Bingham Fellows. Through the Fellows 2013 project “Building a Smarter Food Culture for Louisville”, was born the Louisville Barn Raising, designed to bring local food system stakeholders together. At their very first event last January, resident Andy Loving met Michael Lewis, Executive Director of Growing Warriors. Mr. Loving is President of Just Money Advisors and an Iroquois Valley Farms board member. He set the Iroquois Valley wheels in motion leading to the purchase.

Barn Raising participants identified increased access to land for young and beginning farmers as one key strategy to meet demand for local food. Louisville Metro Government published results of a survey of demand for local food in 2013 showing the potential for up to $600 million in annual sales of local food in Louisville. “Building on these results, it only made sense to convene stakeholders in the local food system to see how we could work together to meet that demand,” said Theresa Zawacki, manager of Louisville Metro’s Local Food Economy division of the Department of Economic Development, and also a 2013 Bingham Fellows participant.

Individuals seeking financial stability and participation in the growing business of producing local and healthy foods are able to invest in Iroquois Valley Farms. According to Mr. Miller, the investment theme is simple, “We’re offering a unique growth opportunity supported by an appreciating and renewable real asset. Focusing on soil health and local and organic foods will naturally grow revenues and enhance the long term value of these farms.”

Iroquois Valley Farms LLC is a food and farmland company making impact investments in local and organic agriculture using triple bottom line principles. Formed in 2007, Iroquois Valley Farms became the first socially responsible farmland company in the United States focused on supporting sustainable food production and the mid-size family farmer. The Company is committed to preserving farmland, facilitating organic land management practices, supporting local food markets, providing land access opportunities to family farmers and creating values-based agriculture investment opportunities. Offering a uniquely corporate and indefinitely scalable opportunity to benefit from the production of healthy and nutritious foods, the Company has purchased over 2,100 acres of farmland, all of which is certified organic or in transition to organic production. The owned farmland is leased through long-term tenancies to farmers independently operating their family farm businesses. Corporate revenues and profitability are directly connected to the growing businesses of these farmers.

Recent purchases include farms in Michigan, Maine, New York, Kentucky, Illinois and Indiana – all for young farmers expanding their local and organic foods and dairy production. Twelve of the last 13 farms acquired have been purchased as part of its nationally acclaimed Young Farmer Land Access Program. Consequently, the Company and its member investors are well positioned to benefit from the growth of organic and specialty crops produced by an expanding base of mostly young farmers. According to Co-Founder, Dr. Stephen Rivard, the prescription for success is simple, “Healthy food is good medicine and good business.”

The Company is committed to the triple bottom line – social responsibility, environmental soundness, and economic viability – and is pleased this commitment has been recognized: Iroquois Valley Farms obtained Certified B Corporation status in 2012 and has been chosen by Impact Assets as a participant in its Impact 50 (IA50) listing of worldwide impact investments for both 2012 and 2013.

About Iroquois Valley Farms

Iroquois Valley Farms LLC was incorporated in Illinois in 2007 to connect investors with local and organic farmland and family farmers. For more information, please contact John Steven Bianucci, Director of Impact at 847-401-6050; jsbianucci@iroquoisvalleyfarms.com  and  visit-  www.iroquoisvalleyfarms.com

With the purchase of a 200 acre Maine organic dairy farm, Iroquois Valley Farms, a socially responsible food and farmland company, jumpstarted organic yogurt leader Stonyfield’s initiative to purchase milk directly from local farmers. It started in late 2013 when Stonyfield introduced Iroquois Valley Farms to Caleb Harris, a 30-year old farmer intending to start his own dairy. Mr. Harris was in the process of acquiring the herd of a retiring Maine dairyman and had arranged to sell the milk to Stonyfield. In a terrible turn of events, the barn Caleb was using burned down. The cows were safe, fortunately, and needed to be moved to a new farm immediately.

While Caleb wasn’t financially prepared to buy a farm of his own, Stonyfield knew he had the experience, skills, drive, and dedication to run a farm, as he was already involved in their newly launched direct sourcing initiative. Stonyfield also knew that Iroquois Valley Farms, with its Young Farmer Land Access Program, might establish Caleb on a farm through a long-term tenancy arrangement. A mutually beneficial three-way organic partnership was born! Each played essential roles (Stonyfield – sourcing contract, Caleb – milk production, and Iroquois Valley Farms – land access) leading to Iroquois Valley Farms purchasing Union Fair Farm, a 200 acre organic farm in Union, ME, at the end of March. Caleb signed an indefinitely renewable lease with Iroquois Valley Farms, one which encourages multi-generational tenure. His young family and herd moved onto the farm. Open for business and already producing milk for Stonyfield, Caleb is the first farmer in Stonyfield’s new project to directly source milk from farmers.

Stonyfield’s milk sourcing project is the latest of many commitments to lead the food industry in transparency and sustainability. Yet, young agricultural entrepreneurs find it very challenging to access land and capital, especially on the scale needed to start a dairy farm. Iroquois Valley Farms, which currently owns 18 farms in six states, is an invaluable partner to local and organic agriculture. Both Stonyfield and Iroquois Valley Farms know that organic dairy farming better supports dairy farm viability and profitability because organic dairy farming provides a higher and more stable price to farmers for their milk.

This sustainable partnership is a real-life success story, where collaboration, community and environmental health are key drivers of business decision-making, leaving “profit at any and all costs” behind. Kevin Egolf, Managing Director of Business Operations further highlights the cooperative nature of the partnership, “Stonyfield, with their enduring commitment to expand organic dairy in the Northeast, was a natural partner. Their support for, and commitment to, Caleb Harris was essential for making the deal work.” Union Fair Farm exemplifies Iroquois Valley Farms unique ability to promote lasting, healthy change in our emerging local and organic food system. A Certified B Corporation, Iroquois Valley Farms has established itself as a trusted provider of local and organic farmland access.

About Iroquois Valley Farms

Iroquois Valley Farms LLC was incorporated in Illinois in 2007 to connect investors with local and organic farmland and family farmers. Contact Kevin Egolf, Managing Director of Business Operations, at kegolf@iroquoisvalleyfarms.com  or John Steven Bianucci, Director of Impact, at jsbianucci@iroquoisvalleyfarms.com  or for more information visit-  www.iroquoisvalleyfarms.com

Article by Daniel Fireside,
Capital Coordinator, Equal Exchange

For hundreds of years, Coffee was grown “organically,” without synthetic fertilizers, pesticides, or herbicides, creating a rich and biodiverse ecosystem. A few decades ago, this changed. Synthetic inputs led to booming production, but the cost to the soil, water, and a warming planet have been paid most steeply by the farming communities. A growing number of small-scale farmers are trying to shift production back to its organic roots, but the expenses and barriers can be insurmountable for farmers on their own. In order to put coffee back on the path of sustainability, they need coffee drinkers and businesses in consuming countries not only to pay the costs of going organic but also to support the farmer’s most critical ally, the cooperative. This is the heart of Equal Exchange’s business model, although it’s one that has taken on a growing urgency as our natural environment faces increasing jeopardy.

Coffee, the most widely consumed beverage after water, is a fascinating case study for environmentalists. Most high quality Arabica coffee (the good stuff) thrives under a canopy of fruit trees that create a leafy playground for birds who help keep harmful insects in check. When grown without synthetic fertilizers, as it was for centuries, coffee groves capture carbon and help keep our planet cool. But several decades ago, all this changed. Clever agricultural engineers discovered that by adding synthetic fertilizers and by monocropping the coffee trees in full sun, yields would spike. Without the birds and shade trees though, farmers also needed pesticides and herbicides to keep the bugs and weeds in check.

As an intrepid teenager studying Spanish in Guatemala during the late 1980s, I spent most of my off hours riding the rehabbed U.S. school busses that have a second life in Central America as the lifeblood of the rural transport system. I loved exploring the country villages where the majority of Guatemalans still live, many speaking not just Spanish but also one of two dozen Mayan languages and dialects. Farming isn’t just a job there. Growing corn, beans, and other crops from the fertile volcanic soil is a deeply ingrained part of Mayan culture. Every inch of land, no matter how impossibly remote or inaccessible, seemed to be farmed with one crop or another. Among the patchwork quilt of traditional crops, I quickly learned to spot the dark green leaves of coffee trees, usually laid out in neat rows soaking up the sun. Instead of tractors and mechanical harvesters, I watched the indigenous farmers, often in the traditional Mayan dress of their villages, carefully tending the postage stamp-size plots of land. Quite often I would see them with a strange backpack device, which I learned was used to spray pesticides and herbicides. The winds would carry the distinct chemical smell for long distances, and it is an odor I still associate with that time.

I returned to Guatemala many times over the years, first as a grant officer for a human rights organization working to help refugees who had been displaced by the U.S.-backed army’s scorched-earth tactics during the country’s decades-long civil war, and then again as a graduate student doing field research on the coffee sector. Even today, you will see farmers carrying backpacks full of pesticides, spraying them indiscriminately on their crops. Agricultural extension experts I spoke with explained that the technical warning labels were usually ignored, both because farmers rarely received any formal training and because they lacked the resources to purchase protective gear like masks and gloves and or follow safety practices that are required on U.S. farms.

I now work at Equal Exchange (www.equalexchange.coop ), where I’m responsible for bringing in mission-aligned outside capital via investments and loans. The company is a worker-owned co-operative that first introduced Fair Trade coffee to the United States back in 1986, and now buys its coffee, bananas, chocolate, nuts, and other products from small-farmer co-operatives on Fair Trade terms from over 40 countries around the world. Virtually all of our products are also grown under certified organic conditions. For those Guatemalan farmers with an acre or two of coffee trees, Fair Trade means that they can count on always receiving prices that show respect for their hard work and careful tending of their crops, as well as a strong co-operative that gives them vital technical support and market access. Growing under certified organic conditions means that they can get rid of those backpacks, leading to strong improvements in the health of residents, the quality of groundwater and soil, greater carbon capture, and many other benefits.

Buying Fair Trade and organic might seem to be two separate good things to do, and indeed there is no requirement that the two be practiced together. But there is a deep connection. If you want to support organic farming globally, you need to support small-farmer cooperatives. To understand why, it helps to go to the start of the coffee supply chain.

About three quarters of Equal Exchange’s revenue comes from coffee. Most specialty-grade Arabica coffee is grown by millions of family farmers who own just a few acres or land or less. In normal times, it’s a good cash crop that supplements subsistence farming. Because top-quality coffee needs to be grown at high elevations, usually in mountainous terrain, you won’t find tractors. And because the coffee “beans” (seeds) grow inside cherries that ripen at different times on the same tree, they must be harvested by hand. What this means is that small farmers can be just as efficient, and therefore competitive, with large plantations, at least when it comes to that labor-intensive first step in the process that ends up as your morning brew. As a result, there are an estimated 25 million small family farmers who earn their living by growing coffee around the world. But how environmentally sustainable is it?

During most of coffee’s history farmers grew coffee in what we would today consider “organic” conditions. Coffee grows well in shaded areas, so it was usually grown under a canopy of fruit trees, providing multiple benefits to the farmer like diversifying their crops, keeping down weeds, and bringing in birds and other wildlife that would keep pests in control and help nourish the soil. Farmed this way, coffee trees are a valuable carbon sink helping to keep our planet cool.

Much of this changed with the Green Revolution of the 1960s [1]. International experts showed farmers the benefits of synthetic fertilizers, herbicides, and pesticides, as well as how mono-cropping coffee trees in full sunlight could dramatically boost yields. These techniques spread fast, as any farmer who hesitated to adopt them quickly fell behind his neighbors. Of course, when supply skyrockets while demand stays flat, prices fall. As they earned less per pound produced, farmers raced to increase the productivity of their trees. Prices for the farmers did not collapse entirely thanks to a global agreement between the major coffee exporting and importing countries, enacted in 1961 mainly to keep poor countries from siding with the Soviets. With the Cold War winding down, the United States abandoned the agreement in 1989, and coffee prices quickly sank, rebounded briefly and then crashed a few years later to pennies on the pound when new players like Vietnam flooded the market with cheap beans. The old landed elites in coffee growing countries realized that the big money wasn’t in growing the crop, but in processing and exporting it. Many rural farmworkers began rebuilding their communities in the wake of the civil wars only to find that they were on the losing end of the global supply chains.

In the aftermath of the civil war in Guatemala, returning refugees leapt at the chance to purchase the fertile volcanic coffee lands that the plantation-owners were letting go. Between the 1950s and today, the share of coffee land held by small farmers went from less than 2% to over half. But the processing and export for the most part stayed in the hands of the former oligarchs. Many farmers began forming co-operatives—a move that during the war was considered a subversive act and would have put them in the crosshairs of the military.

Coffee co-operatives offer several well-known benefits to small farmers, including milling and processing, global market access, technical training, affordable loans, and of course much higher prices than a small-scale farmer could get on their own. Equal Exchange partners with the co-operatives, offering them not only above-market prices, but also access to low-interest credit, marketing support, and long-term partnerships through good times and bad. Less appreciated, however, is that without the co-operative, those small-scale farmers could never go organic.

Although organic farming methods are constantly improving, conventional coffee farming yields are about 70% higher, although this output requires an average of 250 pounds of synthetic fertilizers per acre [2]. Farmers need training and support from the cooperative’s experts to keep pace with the latest organic farming methods. For agricultural products sold in the United States as “certified organic,” farmers must navigate the complex rules and regulations of the USDA and pass costly inspections. Even when a farmer follows all the rules, they cannot sell their crops on the organic market for the three years when they are transitioning from conventional to organic production. So yields plummet, certifiers have to be paid, regulations have to be followed carefully, and the farmer can’t even sell their crop as organic for three years. These additional burdens on the farmer and the co-operative are why Equal Exchange and other Fair Trade companies gladly pay an additional premium for organic food. Without the commitment of concerned coffee drinkers and roasters to cooperatives, the farmers would never be able to afford the higher cost of organic farming.

The return to organic and sustainable coffee farming is still making slow progress. Even though coffee drinkers are increasingly looking for organics, most retailers and consumers are still reluctant to pay the farmers for the transition. Although 99% of Equal Exchange’s coffee is organic, Starbucks, the world’s largest coffee chain, reports that only 3% of its coffee is organic.

Farmers in the global South are on the frontlines of global climate change. Our coffee buyers are constantly on the road meeting with farmers and cooperative leaders in coffee regions. They hear a steady stream of reports about changing weather patterns that can wreak havoc on crops. These past two years we’ve seen the devasting impact of the coffee rust fungus, or roya as it’s known in Spanish. Roya has spread rapidly from Central to South America, helped along by unusual weather patterns with too much rain followed by dry spells and heatwaves. Once infected, roya cuts off the tree’s nutrient supply, the tree loses its leaves and ability to reproduce. The bright red coffee cherries turn black, and the tree will usually die.

Although some communities have escaped the disease, many communities in Central America have been devastated, including a cooperative of indigenous farmers in the remote Guatemalan village of Chajul.  The nearly 1,600 members of the Chajul co-op and their families saw their coffee output—and their income—fall by 80% last year. Farmers are using organic-approved methods to save what trees they can, including spraying a liquid from the compost of more resilient trees, putting those backpack sprayers to a more beneficial use. Replacing lost trees is no easy task, as it takes a healthy seedling four years to come into full production. For a site visit report on Chajul by coffee buyer Carly Kadlec visit  http://equalexchange.coop/blog/coffee-leaf-rust-devastates-coffee-farms

Equal Exchange is working closely with our co-operative farmer partners to help them get through the rust crisis, and to become more resilient in the face of a rapidly changing climate. There are few quick fixes, although by supporting farmers who are making the switch to organic, and also supporting the co-operatives that make it possible, we hope to see coffee once again become part of the climate solution.

Article by Daniel Fireside, the Capital Coordinator at Equal Exchange (www.equalexchange.coop ). He has traveled frequently to Guatemala since 1988.

Article Notes:

[1]  Carey Jr., David. “Guatemala’s Green Revolution: Synthetic Fertilizer, Public Health, and Economic Autonomy in the Mayan Highland,” Agricultural History, Summer 2009. Agricultural Historical Society. Link – http://digitalcommons.usm.maine.edu/cgi/viewcontent.cgi?article=1009&context=history

[2]  Fieser, Ezra. Dec 29, 2009. “Organic coffee: Why Latin America’s farmers are abandoning it,” Christian Science Monitor. Link – http://www.csmonitor.com/World/Americas/2010/0103/Organic-coffee-Why-Latin-America-s-farmers-are-abandoning-it

by Theodosia Hamilton Ferguson,
Founder, Vital Systems

I am actively concerned that industrial agriculture is dependent on fossil fuels, requires heavy natural resource inputs, drives international land grabs and increases the disparity of healthand income and I am sharing actions I have taken to inspire you to action.

There are many voices holding up agroecology as the solution for global farming practices. Agroecology employs traditional ways of farming that are less resource oriented, and which work in harmony with society. New research in agroecology allows us to explore more effectively how we can use traditional knowledge to protect people and their environment at the same time.  Agroecology offers environmentally sustainable methods that can meet the rapidly growing demand for food.

Hilal Elver in her first public speech since her appointment to the United Nations as the Special Rapporteur on the Right to Food says,

Elver points out, “currently in the European Union about 80% of subsidies and 90% of research funding go to support conventional industrial agriculture.” The US subsidies and research funding are likely higher.  Elver is among the representatives of governments advocating for reallocation of money, subsidies, and policies to small local sustainable farmers. We investors need to step up and invest our money directly in local agriculture. Why should we depend on our governments to solve how we eat in this “crowded and hot world of tomorrow” if it’s clear that “small farmers are the key to a healthy future”?

Why are these farmers the key? Because they are great land managers, they understand that good tilth clumps soil that holds water, have extensive farm knowledge—possibly also agroecological knowledge, and the list goes on.

Doesn’t it make sense for local investors to invest in local food?  Global issues embedded in the food and agricultural systems of concern to this investor community are divesting from both industrial agriculture and fossil fuels and ceasing international land grabs. Therefore, we must examine how our current agricultural systems are both susceptible to and perpetuate climate instability–low hanging fruit being biomass and Confined Animal Feed Organizations (CAFOs).

We can invest in agroecological practices through direct relationship-driven investing, also known as Slow Money or Local Impact Investing. It is patient capital that allows an investor to build a relationship with the entrepreneur. I would argue it’s one of the only ways we can truly invest in a food system that delivers sustainably healthy food in equitable ways. The concerns of this investor community are closely linked to the Slow Money Movement that invests as if “food, farms, and fertility matter.”

When Woody Tasch published his book, Inquiries into the Nature of Slow Money, I immediately joined the Slow Money Movement and have invested $2 million in 12 local relationship-driven investments. Some among GMJ readers have written about investing locally as well:

 
Direct relationship-driven investments has another dimension—the growth of democracy. Elver called on governments to support a transition to “agricultural democracy”. I am calling on community members to support a transition to full on democracy—personal, agricultural, social, and financial through direct local relationship-driven investing. You live in your community—invest where you live! You know that your and your family’s well being depends on your community’s quality of life. Your local relationship-driven investments are interconnected with every other person in your community since your small farmers, your local food and farming enterprises create the health and resilience in your community that all community members seek.

Do you eat fresh, organic food? Do you go to the gym, ride a bike, hike by the ocean? You got your energy from eating your local fresh, organic food. You then have vision, mentation, endurance, and musculature to undertake whatever else in your life. Investing is like any other exercise. Why not trust yourself? You know your full universe of community connections. These connections can help you exercise that due diligence musculature in projects you care about. The relationships you have built up over the years could well translate into great investment partners, networks of intentional allies, and good food bounty. Time to get down to work with steady income as well as amazing community benefits!

This is investing, you say, this is my income. Start with 15 percent of your portfolio, cash it out, and put it into a local direct relationship-driven investment account. That’s what I did in 2011.  Start looking for your great partners—your community connections that support healthy food–good, clean, fair, and affordable–in your community. Form working groups. For example, Slow Opportunities to Invest Locally (SOIL) is an investor committee of the Slow Money NoCal Chapter. Then start looking for entrepreneurs in whom to invest. We have had various ways of encouraging entrepreneurs to let us know they need money and to think about Slow Money as a source of investment capital.

One of the common observations from members of the SOIL group is, “As individuals we know only certain aspects of investing, and many of the entrepreneurs know very little about investing and do not know how to present to investors”. There is no one-process-fits-all for food and farming direct relationship-driven investing. I, myself, am only beginning to learn the questions to ask such as: Does this entrepreneur have the fire in the belly and the knowledge and expertise to stay in business?  Will the contract be complete and fair? And many more. Together with your associates you begin this due diligence and grow your investments when all parties are ready.

Well, are you beginning to consider taking this on?  And what about the food and farming entrepreneur? Is she ready to pitch at the next Slow Money Chapter meeting? Probably not. Don’t stop now!

My most significant investment step was to form Vital Systems, Inc. Vital Systems is the result of that wonderful renewable resource—systemic thinking. It helps answer the question: What are the issues that every direct relationship-driven investor faces when s/he realizes that “small farmers are the key to a healthy future”?  Some among the issues are: Can farmers find the help they need to actually adopt agroecological practices? Can food and farming entrepreneurs find services that help them raise capital? How do we reduce climate instability in agriculture? How do we increase community land trusts that are now sprouting eco-villages of young agro-ecological farmers, who had been struggling to access land and are our next generation of food producers?

Vital Systems works with clients through three interrelated services designed to support direct relationship-driven investors by reducing the obstacles for both the investors and entrepreneurs.

Our lead product, GoodFoodWeb, is an online educational marketplace composed of peer expert advisors in food, farming, and finance. Every entrepreneur works through challenges and develops methods they may use one time and never need to employ again in their own business, but that are useful for entrepreneurs at the onset of a similar challenge. For example, Hannah Kullberg, the “Bean Queen” of her family’s company, Better Bean Co. supports fellow entrepreneurs on the GoodFoodWeb as a peer expert advisor. On her profile she describes, “I shepherded the company through HACCP, Non-GMO Verification and B Corp Certification.” Therefore, an entrepreneur who knows they want to become B-Corp Certified can contact Hannah and glean from her experience.

Consider another case study that shows how someone uses all three products in our toolset:

Vital Systems was formed to enable investment in living systems. We seek to serve the investment community by providing services that support food and farming entrepreneurs to become funded and investors to invest locally. So don’t stop now. Settle down and THINK!  How am I going to invest in local food and farming entrepreneurs—the key to a healthy future? I can take this on; Vital Systems has my back. Open up your browser and go to vitalsystemsca.com and check out the technical support we have been developing for you, for all of us who feel in our guts that food entrepreneurs in our own communities grow our health and resilience.

Article by Theodosia Hamilton Ferguson, Founder and CEO, Vital Systems, Inc.

By Rob Dietz, Special Project Manager and
Erin Roach, Vice President,
Investor Relations & Marketing,
Farmland LP

As the rising sun takes the chill off an early autumn morning, the new daylight illuminates the fields of two Oregon farms. A quick glance at each farm reveals clear differences. Several hundred head of sheep roam one farm’s lush, green pastures along a riparian corridor of big leaf maple and white oak trees. These sheep are all ewes, putting on weight and gaining strength for the upcoming breeding season. The other, a conventional farm, bears the signs of heavy machinery — tractors have pulverized the soil into fine bits and spread a batch of synthetic fertilizer after a recent wheat harvest. A breeze kicks dust into the air as a wheel line crawls across the field’s surface to irrigate the bare dirt in preparation for next year’s crop.

The differences between these two farms run much deeper than what’s readily visible. The sheep pastures on the first farm provide only a small indication of Farmland LP’s model of farm ownership and management — a model that stands in contrast to the soil depletion and importation of chemical inputs on conventional farms. Investors, the broader business community, scientists, and proponents of sustainable agriculture are taking notice.

Farmland LP (www.farmlandlp.com ) is an investment fund that buys conventional farmland, converts it to organic using a pasture and crop rotation, and then manages the farmland for an optimal mix of environmental health, food production, and financial returns. It’s a surprisingly simple model with far-reaching effects. The Fund began in 2009 and purchased its first property in 2010, starting with a 150-acre farm in Oregon’s Willamette Valley between the Cascade and Coast Range Mountains. The fund quickly attracted interest, and today owns and manages a $50 million portfolio of farms with 6,750 acres in both the Willamette Valley and the Sacramento Delta fifty miles east of San Francisco. Craig Wichner, one of Farmland LP’s two cofounders, says, “Our first step was to scale up to a size where we could generate higher returns from using sustainable farming best practices.” With proof-of-concept in hand, the fund is taking the next step—a much bigger step—by establishing a $250 million real estate investment trust (REIT).

A REIT is an innovative structure that lets investors own part of a portfolio of professionally managed properties in the same way that investors buy shares of a company. REITs have achieved a solid financial track record over the last 35 years, consistently outpacing the S&P 500. Historically REITs have targeted commercial real estate, such as office buildings, but the structure works equally well with agricultural properties. Farmland LP has applied know-how from the commercial real estate business not only in using the REIT structure, but also in its overall approach to managing land. For example, a company that needs office space today doesn’t typically purchase its own office building. Instead, it leases space in a building owned and managed by a professional real estate company. The real estate company brings in the best combination of tenants to ensure full utilization of the building, generating solid returns for the investors. Similarly, Farmland LP acts as a professional real estate manager, entering into leases with a variety of farmer-tenants who produce food in rotations of organic pasture, livestock, specialty crops, and grains. These rotations, which are designed to enhance soil fertility and ecological health, also produce more revenue and profits per acre than conventional mono-cropping practices. Both farmers and investors prosper from improved farmland management.

Sheep and cattle may not care about REITs or financing mechanisms, but they’re direct beneficiaries of Farmland LP’s choices. The pastures owned by the fund provide a healthy habitat. As ruminants, sheep and cattle have guts designed to digest a variety of grassland plants, rather than the diet of grain pellets they might get on a feedlot. But the pastures do more than produce sustenance; they offer livestock the space to live natural lives. Lambs and young cattle often behave like hyperactive children at recess, sprinting, bucking, and jumping across fields. And for food connoisseurs, the first bite of grilled lamb or beef instantly reveals another benefit of pasture.

Just as pasture is a key to meat quality, it’s also a key to Farmland LP’s organic conversion process and long-term management strategy. According to Jason Bradford, Farmland LP’s other cofounder who holds a Ph.D. in Biology, the perennial plants that make up a pasture build long-term soil fertility. Plants such as red and white clover, forage plantain, chicory, and assorted grasses, when cultivated together, can achieve impressive results. For starters, a healthy pasture lasts between 4 and 7 years, meaning that once planted, the soil experiences less disturbance than conventionally farmed land that is tilled, planted, and harvested annually. Conversion of conventional cropland to pasture also adds key nutrients to the soil, both from nitrogen-fixing plants and from the manure of grazing livestock. Bradford says, “In natural ecosystems, perennial plants tend to dominate annuals. Their deeper roots give them an advantage, and the deep root structures help build soil.” Farmland LP leases its organic pasture to farmers and ranchers who raise premium livestock. At the end of a pasture’s life cycle, the land will have stored enough nutrients so that it can be planted in specialty crops, such as organic squash, without the need for expensive fertilizer inputs. After growing specialty crops for two or three years, the land is replanted in a pasture mix to continue the process of regenerating fertility.

Farmland LP’s management methods make ecological sense, but they also make financial sense. Farmer-tenants who can lower their input costs and get price premiums for pastured and organic food are able to pay higher lease rates to the landlord. And as the landlord, Farmland LP strives to align its goals with those of its tenants by cultivating close relationships and establishing revenue-sharing leases. This model is proving to be especially effective because of what’s happening in the organic food market.

The $35 billion-per-year organic market has grown by an average of 14 percent each year since 1990, and now represents about four percent of the U.S. food budget. The main factor holding back this market from even more rapid growth is the limited supply of land used to produce organic food. Only one percent of U.S. cropland has been certified organic, and the pace of conversion is only eight percent per year, meaning there’s a substantial shortfall. Farmland LP has estimated that the supply gap equates to $80 billion worth of U.S. farmland, far exceeding the REIT’s initial fundraising goal of $250 million.

The shortfall of organic land in the U.S. has arisen at a time when concerns are mounting about environmental problems caused by conventional management of farmland—problems such as loss of soil fertility, impaired water quality, and emission of greenhouse gases. The Union of Concerned Scientists and researchers at many universities have reported the need for agriculture to adopt sustainable practices. Scientists and the market agree: more land needs to be converted to organic, but two high hurdles stand in the way. First, the average commodity crop farmer owns $4 million to $8 million in land, equipment, and structures — any new or expanding farmer needs access to some serious capital to compete. Second, it takes organic farmers three years to convert conventional farmland to organic, creating a large financial disincentive and slowing down their ability to respond to increased demand. Farmland LP addresses both obstacles by raising the capital to purchase farmland and infrastructure, managing the organic conversion process with perennial pastures, and providing affordable leases to access organic land.

Bill Niman is a rancher and a pioneer in the business of humanely and sustainably raised meat. His company, BN Ranch, grazes Angus beef cattle on Farmland LP’s pastures to produce premium meats. Niman says, “My life’s work has been to change the way food is produced and animals are treated in our country. Through partnerships like the ones between Farmland LP and the farming and ranching communities, we can restore a more sensible way of feeding people and help preserve our nation’s most precious natural resources — water and topsoil.” Maintaining two-thirds of its acreage in pasture may have a calming effect on Farmland LP’s lands, but it has an energizing effect on business. Companies such as BN Ranch can expand operations and meet the market demand for organic and pastured meat without having to find the considerable capital needed to buy land. Niman found the Farmland LP model so sensible that he became an advisor to the fund.

Just as Farmland LP’s model provides BN Ranch with access to raise cattle on organic farmland, the REIT structure provides investors with unique access to own high quality, sustainably managed farmland. The average age of farmers in the U.S. is 58 years old, and as they retire an estimated one to four percent of farmland is expected to change hands each year over the next decade. Based on these estimates, $240 billion to $1 trillion worth of U.S farmland (out of a total of $2.4 trillion) will be sold in the next ten years. This massive transition provides an unprecedented opportunity for the REIT to acquire farmland and manage it for long-term financial and ecological health. Although the REIT will initially be private and require investments from accredited and institutional investors, Farmland LP plans to take the REIT public as soon as revenues and distributions reach a sufficient scale. Such a public offering would open access to people of all income levels who are interested in owning shares of sustainably managed organic farmland.

The business community is taking notice of the fund’s combination of financial returns, environmental benefits, and social impacts. Fast Company named Farmland LP one of “The World’s 50 Most Innovative Companies.” ImpactAssets named it one of top 50 fund managers worldwide who create positive social and environmental impacts while generating strong returns. B Corp, the organization that certifies Benefit Corporations, has awarded Farmland LP “Best for the World” status two years in a row.

Farmland LP is sowing the seeds of an agricultural system that builds soil fertility and supports ecosystems while providing farmers with access to in-demand organic land and consumers with access to premium local food. It’s a unique model that cares for people and planet while generating profits. What could be a better investment than that?

For more information on Farmland LP please contact- Erin Roach  (erin@farmlandlp.com )  or Craig Wichner (craig@farmlandlp.com ).

Article by Rob Dietz, Special Projects Manager and Erin Roach, Vice President, Investor Relations & Marketing, at Farmland LP

Mr. Dietz is a leading expert on the economics of sustainability. Before joining Farmland LP, he coauthored the bestselling book, “Enough Is Enough: Building a Sustainable Economy in a World of Finite Resources”. As Special Projects Manager, he puts his multidisciplinary background in environmental science, economics and conservation biology to good use. He analyzes potential farmland acquisitions and develops models to optimize productivity, ecological health and financial returns. Mr. Dietz was the first executive director of CASSE (steadystate.org), taking it from an unfunded start-up organization to an internationally respected leader on new economic thinking. He is a former Presidential Management Fellow, with an appointment to the U.S. Fish and Wildlife Service. He received a master’s degree in environmental science and engineering from Virginia Tech and an undergraduate degree in economics and environmental studies from the University of Pennsylvania.

Ms. Roach is VP of Investor Relations and Marketing and is responsible for marketing strategy, public relations and investor communications. Prior to joining Farmland LP, Ms. Roach was Director of Marketing and Recruitment of Social Venture Network, the nation’s premier membership organization for CEOs of socially responsible business and impact investors. She formerly ran the Experiential Learning program at Presidio Graduate School, was a co-founder for an online parent community called GoCityKids.com, (acquired by Viacom in 2005) and was a member of the West Coast management team for Work/Family Directions, a consultancy assisting multi-national corporations develop a new generation of employee benefits and services that especially addressing the needs of working families. Most significantly, Ms. Roach was a member of the start-up team for Bright Horizons Family Solutions, a widely recognized model for socially responsible business, and, for nearly 10 years, helped grow the company to IPO stage. She received her B.A. in Sociology from the University of California at Los Angeles.

By Rebecca Baran-Rees
MoGro Project Director
at the Santa Fe Community Foundation

The challenge of local and healthy food access is a complex puzzle being addressed across the country, from pre-boxed home delivery companies like Good Eggs, to mobile farmers’ markets and healthy produce vans.

In rural America, however, few organizations have taken up the mantle. With a greatly dispersed geography, small numbers of residents, and predominantly low-income families, our rural communities are in desperate need for something other than a bag of Hot Cheetos from the local gas station. But how, in an industry that survives on large volumes and low margins (think Wal-Mart), can a small, healthy food retailer serve low-income families?

That was the question MoGro wanted to answer.

MoGro (Mobile Grocery), a project of the Santa Fe Community Foundation, is a nonprofit mobile grocery initiative working to support sustainable local food systems and eliminate barriers to affordable healthy food. MoGro works in rural and Tribal lands, partnering with Pueblo communities, the Johns Hopkins Center for American Indian Health, La Montañita Co-op and Skarsgard Farms to address healthy food access in low-income and underserved regions of New Mexico.

With funding from Newman’s Own Foundation, the US Department of Agriculture and the W.K. Kellogg Foundation, MoGro has reached five Pueblos and three non-native communities in New Mexico and is planning to scale to 15 locations by the end of 2015.

MoGro was founded by former Sysco Foods CEO Rick Schnieders and his wife Beth. MoGro seeks to overcome barriers to affordability and access to healthy foods in economically distressed communities, starting with Native Americans. Mr. Schnieders recalls, “We started by initiating conversations with the elders and leaders in the Native American communities to get a sense of what they thought the problems were and what solutions should be explored. It became clear that families did not have ready access to healthy, affordable food.” With input from the partnering tribal communities, a mobile grocery store was born, bringing a full range of healthy affordable food to underserved rural areas.

More than just food access, MoGro facilitates community-based nutrition education, fitness classes, cooking lessons, technical assistance to new food retailers and community outreach to re-establish the vital link between local agriculture, nutrition and health. Recent surveys from the Johns Hopkins Center for American Indian Health highlight MoGro’s positive impact, not solely in providing ready access to healthy food in the short term, but effecting long term changes in culture, attitudes, and behaviors of participating communities for improved health, as well as informing local and national policy recommendations.

Healthy Food Access as a Public Health Program

Let us first consider, for a moment, the consequences of not addressing this need. Obesity has rapidly emerged as one of the most serious public health problems facing children in the U.S. For New Mexico, the disproportionate prevalence of obesity and poverty among American Indian children puts this group at greater risk for obesity-related illnesses and unhealthy food environments. One-fifth of American Indian children are obese and one-quarter of American Indian households are below the national poverty line. High rates of poverty in native and rural communities are particularly troubling, given the association between income and diet; as income decreases, so too does the likelihood of a good diet.

Furthermore, American Indians have food insecurity rates that are estimated to be two to four times higher than non-American Indians in the U.S. In these rural and reservation areas, the nearest grocery store can often be roughly 60 to 100 miles round trip.

Trial and Error: What does it take to improve food access?

Tim Harford, author of Undercover Economist, and expert on Why Success Always Starts with Failure states in his TED talk, “It’s very difficult to make good mistakes.” Hardly revolutionary, but seemingly hard to implement, trial and error, he argues, is a fundamental step in achieving unique solutions to tackle the complex problems we face.

Since its inception in 2011, MoGro has uncovered valuable lessons regarding sustainability, and faced challenges to helping more families access healthy foods. For one, (while yes, it’s beautiful!) a large 40-foot grocery trailer can only consistently visit a few communities within the week. How do we support more families, particularly considering rural New Mexico is predominantly small towns where MoGro’s reach in each location is relatively small? To do more, we needed to change the model.

As such, over the past three years we have built an intentional pattern of adaptation and change – with constant input from our Pueblo community leaders and other stakeholders. In starting a transition from a large grocery trailer to a lean fleet of mobile vans, in March 2014, MoGro initiated its first “Food Club” at La Familia Medical Center in Santa Fe. From our initial trial, we found two key benefits to the Food Club model:

1. More families and communities can receive healthy, affordable food at a lower price.
2. It can become economically sustainable and should reach self-funding within four years.

With fewer resource inputs, the MoGro Food Club allows groups of families, colleagues, neighbors or community members to purchase individual boxes of locally and regionally-grown fruits, vegetables, meat, dairy and value-added items, delivered to a common and convenient location. Along with the delivery, information on the local food source and farmer, nutrition and recipe materials are included in each member’s share. Food Clubs also bring valuable community connectivity and opportunities for sharing local food knowledge, histories, and recipes that support the collective dietary and behavior changes that lead to positive health outcomes and a stronger local economy. Much like the local quilting bees of years past, we want Food Clubs to support strong social networks – except this time, for healthy lifestyle changes.

With renewed funding from Newman’s Own Foundation and the USDA Local Food Promotion Program, MoGro is now embarking on an exciting new phase as it begins to introduce Food Clubs across the region.

Add to the Recipe, an Innovation in Philanthropy

In June of 2013, the Santa Fe Community Foundation assumed ownership and management oversight of MoGro, as long-term transition plans are made for potential tribal ownership. The Foundation is a natural home for MoGro. As Interim President & CEO Jerry Jones notes, “MoGro is an important initiative for the Santa Fe Community Foundation and an innovative model for philanthropy in our region. MoGro combines the dedication of a nonprofit focused on meeting a key community need with the drive of a devoted entrepreneur that is constantly “tweaking” the business model in an effort to get it just right ­– all of this while utilizing the financial expertise and organizational capacity of a Community Foundation as the backbone to incubate the initiative for future growth and ultimate sustainability. These three components, along with passionate donors and dedicated staff, make MoGro an exciting social venture for the future.”

What’s Next?

As MoGro builds community food access, we plan to double-down on the inspiring work of public health professionals. Through the prescription of healthy fruits and vegetables, local medical clinics, community health workers and nutritionists will integrate programming with MoGro to capture valuable information about the real work of making dietary changes and the benefits to be gained. The stakes are high, and there are very few easy answers. How do you make the food affordable long term? How do you scale and replicate the model to serve hundreds, maybe thousands, of communities? What’s the large-scale plan for healthy food access? Thankfully for MoGro, if we’ve learned anything, we’re sure there are great innovations to be made just around the corner.

For more information on MoGro go to-  www.mogro.net

Article by Rebecca Baran-Rees who currently works as the Project Director for MoGro, a mobile grocery initiative that partners with the John’s Hopkins Center for American Indian Health, La Montanita Co-op and Native American and Tribal communities to support sustainable local food systems, and eliminate barriers to affordable healthy food. Before moving to Santa Fe, she worked with low income and underserved communities in California and New York. Prior to graduate school, she worked to reform and monitor mental and medical health care in California State Prisons, and as a legal advocate for low-income families experiencing homelessness and the loss of their public benefits. She received her graduate degree from Cornell University in City and Regional Planning with an emphasis on community development, alternative service delivery models and participatory planning. Born and raised in San Francisco, Rebecca moved to Santa Fe with her husband and son in 2012.