Brazil is the world’s top producer of soy. Industrial soy farming is one of the biggest causes of deforestation.
To help Brazil’s soy farmers finance more sustainable production methods, UK-based Sustainable Investment Management is gearing up for a fourth round of loans through its Responsible Commodities Facility.
The facility raises capital to lend to soy farmers by issuing Agribusiness Receivables Certificates, or CRAs, a type of securitized agriculture financing in Brazil. Farmers who commit to growing soy with zero deforestation of native vegetation and maintain a specified level of forest cover on their farms are eligible for seasonal, low-interest loans.
The new round of funding will be the Responsible Commodities Facility’s fourth and is expected to support 280 farmers and produce nearly 265,000 tons of zero-deforestation soy.
The Responsible Commodities Facility was incubated at the Global Innovation Lab for Climate Finance in 2018. It was launched in 2022 with backing from three UK supermarket chains, Tesco, Sainsbury’s and Waitrose. All three reupped in the latest round of CRAs.
Other investors include Rabobank, AGRI3 Fund, IDB Invest, and the UK and Dutch-government backed Mobilising Finance for Forests program. WWF Brasil, The Nature Conservancy, Conservation International, IPAM, Proforest and UN Environment all contributed to the design of the facility’s eligibility requirements for farmers.
