Grounded Investment Cooperatief U.A. Sustainability Disclosure

The Grounded Investment Cooperatief U.A. is currently a “dark green” Fund, in accordance with article 9 of the Sustainability Finance Disclosure Regulation. The following disclosures are required in terms of the aforesaid Regulation.

Sustainable Investment Objective

The sustainable investment objective of Grounded Investment Cooperatief U.A. (“GIC” / the “Fund”) is to make farming more profitable for producers and facilitate their transition to regenerative farming systems. This objective is achieved by investing in mission-aligned agri-businesses (investees) committed to creating fair, transparent, and honest value chains.

Investing in, and working together with mission aligned agri-businesses creates the economic underpinning needed to drive the adoption, scaling and success of regenerative agriculture. When agricultural land is managed regeneratively to restore soil, water and biodiversity, this results in carbon sequestration, climate change mitigation and the halting of biodiversity loss, which ultimately leads to restoration of degraded farmland and preservation of the environment. Regenerative production, in turn, results in improved product quality and reduced input costs (which increases farmer income and market access), and thus improves the resilience of rural farming households. Honest and transparent value chains lead to transfer of a fair share of the value to the farmer.

How the objective will be met

To meet the sustainable investment objective, the Fund’s manager, Grounded International B.V. (the “Manager”) selects farmer allied, regenerative agri-businesses as investees and supports them to scale. The funds impact goals focus on enabling African entrepreneurs’ business scaling, integrating sustainable sourcing practices into investee operations, and supporting farmers’ transition to regenerative farming.

Screening criteria and Governance Integration Process

All investees align with the Fund’s core impact principles, outlined in GIC Impact Approach. Sustainability is embedded in the investment process of the GIC. Screening criteria and Governance Integration are implemented through the investee selection, alignment, portfolio management processes described below.

a. Initial selection: Assessment of the vision and mission of the investee, investee governance and the alignment of the investee’s existing operations with GIC’s sustainable investment objective, or potential for the investee to contribute to this objective. The Manager applies two selection approaches:

  • Positive screening: An investee must make a positive contribution to promoting regenerative agriculture and supporting farmers, or hold the potential and intention to make a positive contribution, while also offering financial reliability for the investors. Each investee aligns itself to the Manager’s core principles, outlined in the GIC Impact Approach with regard to a) regenerative agricultural practices (such as no-till, intercropping, crop rotations, composting, and the rotational grazing of animals), b) sustainable wild harvesting (context-specific and including access and benefits sharing), c) sharing risk and value (including traceability, equitable distribution of value to farmers, employee relations and adherence to labor laws), and d) quality and compliance (including management systems, international standards, tax compliance and responsible health and safety practices).
  • Negative screening: In order to ensure that the Fund does not invest in investees that are involved in harmful activities, all investees must meet strict exclusion criteria set out in the (GIC) Investment decision making process including (a) no structural violation of international human rights laws, environmental laws, or anti-corruption laws. (b) no use of prohibited pesticides, herbicides, fungicides or chemical fertilizers, (c) no negative impact on high-value conservation areas, and (d) no discrimination or coercive behaviour regarding staff opportunities or remuneration.

b. Research: The Manager performs a thorough sustainability, financial and risk analysis (including but not limited to the MVO Nederland CSR Risk Check aligned to the OECD guidelines), preferably on site. The comprehensive analysis verifies the outcome of the initial selection phase.

c. Investment decision: The Manager’s investment decisions are based on a thorough assessment of the outcomes of the research process.

d. Integration of impact commitments: Investees commit to the core principles, formulating a company objective and related commitments. and integrating these into governance documents. The objective and commitments are safeguarded by including them in the shareholders agreement.

e. Portfolio management: Investees submit annual operational plans, aligning with our impact goals and commitments, for shareholders’ approval. The manager supports investees to achieve these goals through their board position as well as through the managers regenerative agriculture support function.

f. Monitoring and reporting: Investees annually report about their performance with regard to their impact goals as well as the GIC’s impact indicators; . The GIC also carries out annual Impact assessments under the IIC, which include both socio economic impact assessment and soil health impact assessments. The outcome of these activities is published in the annual Impact Report.

Sustainability indicators

Quantitative progress indicators include the number of farming households that are provided access to market for their regeneratively grown products, and the number of hectares of regeneratively farmed land. The achievement of these indicators is a natural outcome of our investment strategy rather than a result of targeting specific indicator results.

For further details, visit the Manager’s website at www.groundedinvestmentcompany.com.