Investment Rationale
The project aims to deliver the creation of a blueprint for sustainable business practices that demonstrate a vision which balances sustainable production and the protection of the environment on approximately 150,000 hectares.
Implementing the model at such scale is operationally and technically ambitious, as it targets investing in the improved rotation of agriculture with cattle raising on most of the productive farm area. It thus serves as an example to the market of effective and large-scale intensification, while still protecting natural forest and meeting the Forest Code.
In addition, the purpose of the project is to ensure, through the Landscape Protection Plan (LPP), the promotion of this model to peers, to the market and via credible industry institutions. As &Green’s first investment in Brazil, this sends a message about supporting players that operate beyond “business-as-usual” from a production and protection perspective.
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Environmental Return & Social Inclusion
The targeted Environmental Returns for the project are displayed below and represent the aggregate of the impacts of Roncador’s actions (i.e. ER) within its farm gate (e.g. forest conservation and restoration, as well as land to be sustainably intensified), and the potential results of Roncador’s actions outside its farm gates (e.g. engagement with 3rd parties such as suppliers, farmers and coordinating agencies, that in turn generate ER). Roncador’s commitments to &Green as part of the financing relate to directly attributable actions: achieved ER on-farm and activities implemented off-farm.
&Green takes an active role in advising companies such as Roncador in order to define their role as a key stakeholder within their industry and with their peers, and to disseminate best practices and encourage the adoption of their sustainable production blueprint by others. The key documents which &Green uses to manage its relationship with Roncador are:
The Landscape Protection Plan (LPP)– a fundamental document for &Green that establishes and anchors the long-term vision for the sustainable development of the borrower’s production and conservation model within and outside the farm gates.
The LPP:
- Establishes a shared understanding of the project area and business as usual of the landscape.
- Defines the additionality of the programme and target for each ER, including impact on greenhouse gas (GHG) emissions.
- Determines the ER plan, budgeting, delivery milestones and MRV strategy.
The Environmental Social and Action Plan (ESAP) is a plan which defines actions that Roncador will implement, was developed based on a gap analysis of Roncador’s practices against the IFC Performance Standards. The gap analysis has been carried out by an independent E&S consultant, with inputs from &Green’s Investment Advisor, SAIL Ventures.
An independent third-party firm will assess Roncador’s progress with the LPP, ESAP and other internal environmental and social policies and plans on a yearly basis. A summary of the assessments’ conclusions will be published here annually.
Environmental Return
The rationale for generating the three key ERs (forest conserved, land intensified and forest restored) in Roncador’s “landscape” is centred on the company’s production strategy and state of the art farming practices. By focusing on areas that can demonstrate high levels of soil health and productivity, Roncador applies improved soil management; cattle ranching; and agricultural practices to generate above state average productivity levels and increased production volumes for both soy and cattle (60,000 ha of land intensified). In turn, these practices demonstrate sufficient returns to guarantee the protection and restoration of forested areas (~66,595 ha of forest conserved, and 200 ha of forest restored). The sheer size of Roncador’s farm (150,000 hectares) means that it has a direct and material influence on the landscape.
Additionally, the project demonstrates a strong case for reducing overall GHG emissions while increasing production and productivity. Impact on GHG emissions will be included in Roncador’s reporting and will be tracked.
To promote its business philosophy outside its farm gates, and support off-farm environmental returns, Roncador is taking an active stance to disseminate its knowledge and share its vision via various channels and for different communities. From the farmer’s movement, Liga do Araguaia, to studies and through its own information dissemination activities, Roncador will enable others to understand and replicate the model and create a market for rewarding and incentivizing sustainable products in the cattle industry.
SOY PRODUCTION UNDER ICL MODEL (TONS OF FOOD PRODUCED):
