“Sustainability is at the heart of ofi. The IIS gives finance and business teams the needed numerical link between actions on the ground, as well as their impact and dependency on the Capitals. This will help in both improving the understanding of the Capitals and in taking necessary steps towards increasing the long-term value for the company.”
Taking the initiative forward
F4S will uncover hidden costs and benefits not previously reported, support the leveraging of sustainable financing to address the most pressing supply chain sustainability issues and help support the business to “be the change for good food and a healthy future”. Our vision is to be a best-in-class business partner, responsible for maximizing long-term intrinsic value for all our stakeholders using non-financial drivers of value.
In 2021, we performed a monetary valuation of material natural capital (NC) impacts and dependencies by assigning an approximate monetary impact value. The outcomes are illustrated in our NC Profit and Loss statement (NC P&L) and NC Balance Sheet (NCBS) under the IIS.
F4S will internalize externalities via ourproduct platforms, supporting strategic financial business decisions and influencing significant stakeholders, bringing finance and sustainability concepts together.
With no formal framework for measuring these capitals, we needed a better way to measure, quantify and report our long-term “invisible” value. F4S will create partnerships and collaborations to grow this mindset.
We use a common numerical language – where applicable – that everyone can understand, evaluate and articulate. IIS allows ofi to explain the impact of our actions on the ground to all internal and external stakeholders.
F4S in the News
At ofi, we believe our finance teams are well-positioned to help businesses embed sustainability issues into a company’s risk and performance management. Our work aims to re-imagine the valuation approach and integrate the positions of key non-financial capitals in our business decisions. Find out more on how we are driving conversations across different platforms and sharing more about our work.
FAQs
The Capitals drive Long-Term Value and underpin a significant portion of a company’s market value. The Integrated Impact Statement (IIS) is a decision-making tool, which allows ofi to manage Long-Term Value. This tool will help embed sustainability concepts – such as multi-capital accounting – into the heart of our business, through finance.
The IIS tool is made up of 3 elements: Profit and Loss; Balance Sheet; and Risk and Opportunity Statement; and covers three Capitals;
Natural Capital: The land, water, biodiversity and other ecosystem services required for food, feed and fibre production. This includes the accounting for renewable and non-renewable environmental resources which ofi depends on for its long-term sustainable operations and associated externalities.
Social Capital: The relationships we forge and nurture for long-term commercial success. This includes the accounting for external stakeholders in society – community, institutions and ofi’s contributions to those relationships through its community-based programmes.
Human Capital: The talent, skills, dedication and inspiration of our workforce and management, and our responsibilities towards them. This includes the accounting for all internal stakeholders, our workforce and management – which ofi relies upon and contributes to, through training and capacity building – and safe and healthy workplaces where rights are respected.
Like a control tower, the IIS decision-making tool effectively reports and allows ofi to manage long-term value.
The IIS leverages existing frameworks by Accounting for Sustainability, the Capitals Coalition and The Economics of Ecosystems and Biodiversity for Agriculture and Food (TEEBAgriFood).
Source of framework: Capitals Coalition (https://capitalscoalition.org/)
F4S in 2019 developed the IIS for the Cocoa business. A summary of some insights from Cocoa’s IIS on key aspects of Natural Capital is presented in Olam’s Annual Report 2019.
The insights from IIS can positively change and differentiate the way we operate and with whom we operate. We are now better informed about our Natural, Social and Human Capital impact, and can provide actionable management information to enable our Business Units to better understand their key impact areas (by Farmer Group level, by country, by commodity), and devise more appropriate plans. This way ofi endeavours to become a resilient and more reliant partner for all our stakeholders by ensuring the creation of Long-Term Value.
The IIS Natural Capital valuation scope is detailed in the table below.
Indicator | Valuation Scope | Main Data | Valuation | Cost / | ||
Country | Watershed | Biome | ||||
Land Use |
|
| Y | Farmed | Gain in biome specific benefits (Ecosystem | Benefit |
GHG | Y |
|
| Total GHG | Social cost of carbon | Cost |
GHG | Y |
|
| Carbon Sequestered | Benefit of sequestered carbon | Benefit |
Water |
| Y |
| Water | Human and ecosystem damage cost | Cost |
Water |
| Y |
| Fertiliser | Human damage cost | Cost |
Read ofi news
Author | Andrew Brooks | Head of Sustainability, Cocoa, ofi
World Chocolate Day, a day to not only indulge, but to remember the people and landscapes that grow the cocoa that goes into our favorite products. Both are vital to help maintain a sustainable future for cocoa production. That’s why as part of our Cocoa Compass sustainability ambition, we collaborate with our customers and partners on multi-stakeholder partnerships to drive collective action and lasting impact.
Climate change is among the biggest challenges in growing cocoa. In Indonesia, for example, intensive rainfall, drought, rising temperatures, and an increase in related pests, threatens farmer yields and erodes their livelihoods, including those of women and indigenous groups that depend on their crops for subsistence. Yet many farmers struggle to access the support they need to adapt and become more resilient.
A climate-smart agroforestry system is key to addressing and mitigating climate change risks, which is why we co-created the Landscape Approach to Sustainable and Climate Change Resilient Cocoa and Coffee (LASCARCOCO), a three-year partnership with USAID, non-profit Rikolto, the Hershey Company, and the Indonesian Government, to help 6,500 farmers increase yields by 25% and conserve 14,000 hectares by late 2025.
Through the partnership, we have developed a new curriculum to train farmers in Good Agricultural Practices and climate adaption, promoted sustainable agroforestry – where forest and shade trees are planted alongside cocoa and coffee to restore forest covers – and provided farmers with seedlings. It’s already making a difference – in year one of the project, approximately 8,600 individuals were reached directly or indirectly via the program. The LASCARCOCO USAID ofi project has successfully bridged a constructed collaborative action with stakeholders involved in the project such as farmers, forest communities, government, and forest authorities to deliver an agroforestry program.
Good landscape governance is also critical to protect the land and the incomes of the farmers who work it. In Ghana and Côte d'Ivoire, we’re working with the Rainforest Alliance and USAID on the Resilient Ecosystems and Sustainable Transformation of Rural Economies (RESTORE) project. This not only promotes regenerative and sustainable cocoa production; it also aims to strengthen Landscape Management Boards (LMBs).
These boards are important because they bring key stakeholders together – community members, local farmers, the Ghanaian Forestry Commission, and COCOBOD – and give the local community a say in how the land is managed. We provide ongoing support and training to LMB members on everything from management and financial literacy to climate-smart farming and forest-friendly enterprises such as beekeeping and piggery.
Whilst we’re proud of the impact we have made so far, there is still much more to do. We remain focused on working with customers, civil society, national governments, and other stakeholders to support farmers and to protect landscapes across origins – so when consumers pick up their chocolate bar or cocoa-flavored treat, they can be confident that it’s been produced in a way that supports people and helps protect the planet.
Author | Billie Elmqvist Thurén | Human Rights ofi Sustainability & Cocoa Lead
Accessible education is an effective way to reduce the risk of the incidence of child labor as well as providing a foundation for protecting children’s rights. Through our Child Labor Monitoring and Remediation System (CLMRS), we monitor and identify the specific needs of communities across our nine global sustainable sourcing regions.
From providing access to schools closer to home to initiatives that empower cocoa households to be more economically resilient, here are a few ways we are removing barriers for children in our cocoa supply chain to attend school and develop their future potential.
- New 2030 social and environmental targets set for ofi’s global operations which span ~50 countries, building on the existing product-specific strategies for cocoa, coffee, dairy, nuts, and spices.
- Strong focus on supply chain excellence to enhance supplier engagement, mitigate supply chain risks, and give customers more rigorous, verifiable data for sustainability decision-making and reporting.
- Impact will be achieved in partnership with farmers, governments, civil society and ofi’s customers, backed by clear action plans and methodologies outlined by ofi.
ofi, a leading supplier of naturally good food and beverage ingredients, today unveiled a new sustainability strategy – ‘Choices for Change’ and ambitious 2030 targets.
Global food brands and retailers are facing growing consumer demand for sustainable products, with increasing weather related and other challenges in the food supply chain and significant new sustainability linked legislation coming up. With ‘Choices for Change’, ofi will provide these companies and their consumers with specific choices to deliver long-term impact across four critical pillars: Prosperous Farmers, Thriving Communities, Climate Action, and Regenerating the Living World.
Every 2030 target in the Choices for Change strategy delivers on key customer needs, including:
- Delivering enhanced livelihood support to one million farmers, helping them to be more productive and deliver better quality ingredients.
- Cutting scope 3 emissions by 30% to offer customers verifiable, low-carbon products and ingredients and contribute to net-zero commitments.
- Bringing 2 million hectares of land under regenerative farming practices to create long-term farm resilience and products with verified positive natural impact.
To give customers more rigorous, verifiable data for sustainability decision-making and reporting, the strategy incorporates a focus on supply chain excellence. This brings traceability, data insights, risk mitigation, verification, and in-depth supplier engagement together to enable the right choices and includes ofi’s suite of award-winning tech tools like AtSource - the sustainability management system and its built in Carbon Scenario Planner for planning and costing climate action.
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