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Farmer ploughing his farmland and compliant with responsible investment practices.

Case Study: Food Security & Nutrition

The Responsible Agricultural Investment (RAI) Tool for Agribusiness

International Institute for Sustainable Development (IISD) International Institute for Sustainable Development (IISD)

Investors and businesses can be critical in driving the transition to more equitable, resilient and sustainable food systems. The Responsible Agricultural Investment (RAI) Tool for Agribusiness offers a practical framework for business leaders to understand what responsible investment practices look like, identify gaps and prioritise improvements as they seek to align with international principles.

The tool has been developed by the International Institute for Sustainable Development (IISD), Cerise+SPTF and partner organisations with support from the Swiss Agency for Development and Cooperation.

“Responsible investment can play a transformative role in fostering innovation and inclusivity in agricultural value chains,” said Hafiz Mirza, Lead of Responsible Agriculture Investment Research at IISD. “I would encourage any business leader in this sector to try the new tool, discover opportunities for improvement and start thinking about how to take action.”

The RAI Tool for Agribusiness can be used by a wide range of stakeholders engaged in promoting sustainable agricultural investments such as agribusinesses, financial investors and industry associations. It shows how to create a clear and actionable plan towards more responsible business practices in line with existing international principles and standards. 

The tool has been tested by agribusinesses in Africa and Asia and refined based on their feedback and is designed to be compliant with internationally recognised best practices of sustainable business conduct, such as the principles of responsible investment in the agricultural and food systems (CFS-RAI Principles) and the International Finance Corporation (IFC) Performance Standards.

Enhancing compliance in small and medium-sized agricultural enterprises in Rwanda

Mahembe is a representative of small and medium-sized agricultural enterprises operating as a cherry producer, green bean processor and exporter, selling green beans to specialty coffee roasters in Rwanda. They face challenges such as accessing high-paying markets for specialty beans, managing adequate and reliable supply with an ageing farmer population and assuring quality for niche coffee sectors.

Using the RAI Tool for Agribusiness, IISD measured Mahambe’s compliance with principles for responsible investment across seven key dimensions and it was determined that Mahembe has a high level of compliance. The seven dimensions included, strategy and accountability on responsible agriculture, inclusive and transparent structure, safe and responsible agriculture and food systems and operations, environmentally sustainable processes and products, responsible treatment of stakeholders, responsible human resource development and financial transparency and benefit sharing.

This resulted in the development of recommendations such as adopting a more formal approach to recording its policies and procedures to ensure ongoing compliance with responsible agricultural investment standards.

Responsible investment: prioritising compliance in highly competitive markets in Ghana

Cocoa is a major export crop in West Africa. In Ghana, the cocoa industry faces an array of challenges, from climate-related disruptions in production to declining profitability and limited finance and resources. Traders in the country also often have to compete with larger firms whilst grappling with restrictions established by authorities that govern the industry. 

The RAI Tool for Agribusiness was used on an agribusiness that represents small and medium-sized traders in the cocoa industry and measured compliance with principles for responsible investment across the seven key dimensions used in the case of Mahembe in Rwanda.

Results from the compliance analysis showed an acceptable level of compliance but noted that significant action is required in areas in which it is weak. For example, the company is a small business in a very competitive environment and tends to focus on operational matters for survival, neglecting strategic matters and dealing with responsible business conduct in an ad hoc way.

Recommendations from the compliance analysis included establishing a more rigorous strategy building and formalisation of processes, including those related to responsible agricultural investment.

“This innovative tool not only helps businesses plan to become more sustainable, but it also promotes transparency and accountability—both of which are essential for sustainable development,” says Marion Allet, Head of Environment and Impact at Cerise+SPTF.

You can find out more about the RAI Tool for Agribusiness here.

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