Environment

Climate change presents an existential threat to smallholder producers and artisans across Shared Interest’s portfolio. From diminishing cocoa yields in Ivory Coast to unpredictable honey harvests in Mexico, our customers face mounting environmental challenges requiring significant knowledge, expertise and financial support. 

Recent data from the Climate Policy Initiative (CPI) confirms a persistent, severe funding gap: climate finance for the agri-food sector remains critically insufficient, with only 4.3% of global climate finance directed towards agrifood systems. More concerning still, less than 1% reaches smallholder farmers, small-scale producers and agricultural micro, small and medium enterprises (agri-MSMEs) - precisely those most vulnerable to climate impacts.    

Our Research

To better understand the role in building climate resilience, we conducted comprehensive research focusing on two critical sectors: coffee production in Peru and cocoa farming in Ivory Coast, selected due to the high volume of our lending exposure in these regions. 

This research included mini-surveys carried out in January 2024 with customers in these commodity and country pairings, as well as research into the activities of organisations working alongside producers, such as CLAC (Latin American and Caribbean Network of Fair Trade Small Producers and Workers), Earthworm Foundation and IDEF (Initiatives for Community Development and Forest Conservation). 

Summaries of these research papers can be found in Appendix 14 and 15.

Supporting Climate Adaptation and Mitigation Activities

As a result of this research we are now exploring how we can best support key adaptation and mitigation strategies used by customers such as agroforestry and organic fertiliser use. This exploration includes identifying suitable strategic partners with whom we can collaborate.

Our broader Customer Social Impact Survey revealed significant insights into climate adaptation efforts across our portfolio. Notably, 91% of respondents reported contributing to organisational development projects, though only 9% specifically focused on climate initiatives. This gap between climate awareness and action reflects the multiple challenges these organisations face. More encouragingly, 80% contributed to community development projects, with 64% incorporating environmental components.

Climate impacts are increasingly visible: 57% of customers reported climate-related challenges, including reduced yields, disrupted weather patterns, and increased pest and disease prevalence. In response, 65% have implemented climate resilience training over the past year, covering agroforestry management, EUDR compliance preparation, good agricultural practices, and carbon credit initiatives.

In West Africa, customers face particularly acute challenges. Ivorian cocoa customer CADESA, reported significant yield and quality reductions affecting contract fulfillment and producer incomes. In response, Shared Interest has extended their repayment terms.

CADESA noted: “Shared Interest has been a reliable and serious partner who tries to understand its farmers, if we continue to borrow from Shared Interest, it is its values of support and assistance to farmers that keep us in the portfolio.”

We recognise that our activities have a local, regional and global environmental impact and we are committed to continuous improvements in sustainability. Based on this conviction, Shared Interest created an Environment Team in 2008, to act as internal sustainability champions and support colleagues’ engagement with these issues.

The guiding principles of our Environment Team, also highlighted in our ‘Green Policy’ (Appendix 11), are:

• To encourage environmental responsibility amongst our colleagues, volunteers, contractors and suppliers.
• To conduct our operations in a manner which minimises our consumption of natural resources and manages waste through responsible disposal and the reuse and recycling of materials where economically feasible.
• To include environmental considerations in our purchasing and procurement processes.
• To regularly review our Green Policy and keep the team up to date on changes to policy and procedure.

Our Environmental Focus

We remain mindful of the environmental impact of our operations worldwide. As members of the World Fair Trade Organisation (WFTO), we adhere to their 10 Principles of Fair Trade, with particular focus on principle 10, ‘Climate Action and Protection of the Environment’, while connecting with WFTO’s Environmental Solutions Hub.

Environmental responsibility is encouraged throughout our organisation from colleagues and members to volunteers, customers, contractors and suppliers. Our operations prioritise conservation of natural resources, responsible waste management, and material recycling where economically viable. These considerations are fundamental to our purchasing and procurement processes. We now also undertake a full evaluation of new value chains before providing finance to a customer.

The appointment of a Partnership Manager has strengthened our strategic climate initiatives, leading to a focus on building relevant partnerships in this sector and analysis of climate effects on coffee production in Peru and cocoa farming in Ivory Coast.

Climate change technical assistance has become integral to the Foundation's project delivery, with environmental considerations now embedded in all future project development.

Our internal Environment Team held meetings throughout the year, discussing carbon offset, communication with colleagues and relevant issues such as EUDR. The team also updated our Green Policy and Checklist, which is shared with colleagues.

A variety of activities aimed at environmental action and awareness raising were carried out in the past year. Our colleagues in Kenya participated in the nation’s tree planting initiative with their families, particularly poignant during periods of severe flooding. This government-led programme, which provided locally adapted seedlings, forms part of Kenya's long-term strategy against climate change impacts.

Click here to read the full Social Accounts document.