USAID is partnering with Rabo Foundation to accelerate the foundation’s ability to invest sustainably by designing and conducting carbon monitoring of the foundation’s investments. Beginning with its pilot efforts in Indonesia, this partnership will enable Rabo Foundation to make more climate-conscious investments.
“Investing in companies that have a direct impact on land use is a powerful lever to mitigate climate change,” said Angela Hogg, USAID’s Regional Development Mission for Asia’s Environment Office Director. “We are excited to partner with Rabo Foundation, which belongs to one of the world’s top sustainable agribusiness finance groups, to leverage its investments to mitigate climate change and reduce carbon emissions.”
Together with USAID Green Invest Asia, a platform helping to scale sustainable agriculture and forestry businesses in Southeast Asia, Rabo Foundation, the corporate foundation of Rabobank, is setting greenhouse gas emission benchmarks as part of its strategy to monitor and assess resources allocated toward climate-smart agriculture investments.
This partnership aims to test and demonstrate a carbon methodology that may be scaled up across Rabo Foundation’s global portfolio. Rabo Foundation’s investments are spread over 22 countries, including seven in Asia. In 2018, the foundation invested $37 million in 369 organisations globally, including small and medium-sized enterprises.
“We invest in the growth and resiliency of smallholder farmers. To achieve ecological sustainable businesses, it helps to understand the inner workings of carbon footprint measurements,” said Diva Tanzil, Rabo Foundation’s sustainability specialist in Indonesia.
“The outcome of the pilot with USAID Green Invest Asia will inform our investment decisions, and ultimately assist us in developing innovative financial support that is better tailored to address and mitigate the impact of climate change on the agribusiness value chain,” said Mark Koppejan, the foundation’s Asia Program Manager.
This effort builds upon earlier partnerships with Rabo Foundation. In India in October 2018, USAID launched a ten-year partnership with the foundation, in collaboration with the Ananya Finance for Inclusive Growth and the Samunnati Financial Intermediation and Private Services, to make available up to $15.3 million of local financing to small and medium private enterprises engaged in sustainable and low emission land use in India.
Indonesia, despite reductions in deforestation, remains one of the world’s top five greenhouse gas-emitting countries primarily due to forest/peatland conversion. This makes Indonesia a suitable test ground for Rabo Foundation to start assessing carbon emissions and recommending climate mitigation policies for the loans it provides to selected cooperatives and small- to medium-sized partner organisations.
“Measuring carbon emissions can be a difficult science that is still making its way into the finance world. ‘Will this investment harm people or the environment? How can it be profitable without doing so?’ That’s where we come in with tailored carbon measurements and business feasibility planning,” said Yohann Formont, who is the Senior Finance Advisor for USAID Green Invest Asia.
The foundation is using carbon methodology recommended in a recent USAID Green Invest Asia assessment of 78 greenhouse gas accounting tools that used multi-criteria analysis covering output, resourcing, rigor and scope to select the most appropriate, adaptable tools for agriculture and forestry sectors in Asia.
The assessment determined tools that effectively measure carbon emissions at project, enterprise and portfolio levels in USAID Green Invest Asia’s business pipeline, which includes timber, rice, rubber, palm oil, cacao and coffee businesses.
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About Rabo Foundation
Established in 1974, Rabo Foundation is Rabobank’s corporate foundation. The Foundation invests in the self-sufficiency of farmer organisations in Africa, Asia and Latin America, by sharing the cooperative, banking and agricultural expertise that the Rabobank has built up over many years. This helps organisations to achieve their goals of offering smallholder farmers access to finance, savings opportunities, knowledge and new markets. In addition, new technological developments and digitisation solutions are deployed to help serve smallholders farmers even more effectively.
About USAID Green Invest Asia
Launched in 2018, USAID Green Invest Asia is a platform leveraging blended finance to connect companies with capital providers that invest in sustainable agriculture and forestry businesses in Southeast Asia, as well as supporting corporations with sustainable sourcing of food and forestry products. USAID Green Invest Asia is mobilising $400 million of investment with an aim to reduce 25 million metric tonnes of carbon emissions.