Soy and cattle farming are perhaps not immediately called to mind when investors consider where to invest for positive environmental and social impact. However, SAIL Ventures saw an opportunity to incorporate sustainability targets into its lending to such companies in order to prove that financing sustainable and deforestation-free commodities is commercially viable and replicable.
It has linked environmental and social commitments to its loan covenants in these sectors in emerging markets, combining this with innovative financial structures enabling sector transformation at scale, it says.
Winner of the IMPACT Private debt provider and asset manager (small) awards, investment firm SAIL Ventures is focused on transforming emerging market commodity supply chains. Chief investment officer Johnny Brom and Head of Impact and ESG Michael Schlup explain
SAIL is the investment advisor to the &Green Fund, a $100 million sustainable agriculture fund launched in 2017, with the aim of securing $400 million in committed capital by 2024. SAIL currently has approximately $127 million in assets under management.
After the onset of the coronavirus pandemic SAIL and the &Green fund were able to secure a $30 million loan to Indonesian palm oil company PT Dharma Satya Nusantara (DSNG), which SAIL claims has committed to a level of transparency and accountability as yet unseen for a palm oil grower.
In addition, during this time, &Green Fund secured a $10 million debt investment into Brazilian soy farmer, Agropecuária Roncador to upscale its farming production. The project includes the recuperation of degraded pastures and aims to lower absolute emissions despite increased production.
"We are delighted to be recognised by Environmental Finance as the Small asset manager of the year," said Michael Schlup, head of impact and ESG at SAIL. This is a welcome recognition of our holistic approach to investing by integrating commercial, environmental and social considerations to achieve the best outcomes for our investors."