Sustainability as a Key Factor for Mitigating Risk in Agricultural Supply Chain Finance
The Rainforest Alliance and Citi Foundation have hosted two Sustainable Value Chain Finance Workshops in order to establish a dialogue with agricultural value chain participants regarding ways to expand and improve the financing available for sustainable producers. In the second meeting of this group, held on January 30, 2012, the discussion was focused on risk mitigation in agricultural supply chains. Seventy-nine participants discussed the working hypothesis that adopting and certifying sustainable practices can reduce risk. Participants were asked to share their related experiences and observations, which are summarized in the report: Sustainability as a Key Factor for Mitigating Risk in Agricultural Supply Chain Finance. The workshop aimed to have participants agree on which risks in the agricommodity supply chain were likely to be mitigated by certified sustainable practice, as well as to discuss a priority set of metrics to collectively adopt to help gather data on sustainability, its business benefits and risk mitigation. Working groups focused on two supply chains (coffee and cocoa) in order to determine the most appropriate approach for integrating the proposed metrics, discuss how to scale up financing in the chain and develop a framework for ongoing and expanded collaboration.