The International Institute for Sustainable Development (IISD), Cerise+SPTF and partner organizations have developed the Responsible Agricultural Investment Tool (RAI Tool) for Agribusiness. This tool offers a “practical framework” for investors and businesses in the food, agriculture and forestry sectors to understand and recognize responsible practices and prioritize improvements toward sustainability.

The organizations have developed the RAI Tool to assess the responsible business practices of agribusiness and value chain actors that work directly with smallholder farmers to produce, process or trade food and agri products and impact local communities with their operations.

Hafiz Mirza, responsible agriculture investment research lead at IISD, speaks to Food Ingredients First about the tool’s development and relevance in the agri-food industry.

“While there has been a proliferation of principles, guidelines, frameworks and tools supporting the private sector — specifically agribusiness — to develop more responsible practices (and related performance indicators) in how they engage with vulnerable stakeholders (farmers, communities, women and the environment itself), these often lack a common framework and miss crucial aspects,” he says.

Compliance and economic viability
The primary objective of this reference tool is to help agribusinesses gauge how compliant their practices and operations are with international principles, such as contribution to food security and nutrition and promoting safe food systems.

IISD notes that these principles can be “generic and difficult” for agribusinesses to adopt in their management and operations routine.

“The RAI Tool uses the ‘language of business’. For example, the key dimensions are essentially Business Functions (strategy, HR, finance etc.). We found that company executives found it very easy to understand while testing the tool,” says Mirza.

“It was developed by taking existing frameworks and tools into account. In many cases — in the tool itself — we indicate how it is consistent with specific frameworks. By taking an umbrella approach, evolution is built in and practices can be added, dropped or modified. We already expect to do this to some extent by, for instance, adapting elements of the Tool for use in different industries.”

The data/information required to use the RAI Tool will already be collected for existing purposes, such as environment-related emissions, which highlights that it is not meant to “reinvent the wheel but instead build on tested indicators on RAI-related business practices and performance.”

For the agri-food sector, the tool could increase economic viability.

“During our fieldwork, some of the most important discussions were about moving toward better practices, often with the support of other stakeholders. A systematic framework can sometimes facilitate a fruitful discussion between a company, farmers and other stakeholders.”

Several food and beverage players recognized that better RAI practices led to more commercially viable operations. “Several companies we spoke with were established with RAI principles (or similar approaches) baked into their operating practices. These were among the more successful.”

Even though the framework incorporates “best practices,” it doesn’t “undermine” agri-food businesses’ profitability due to its flexible structure.

Involving stakeholders
The RAI tool is available for various stakeholders engaged in sustainable agricultural investments, including agribusinesses, financial investors and industry associations.

“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,” adds Marion Allet, head of environment and impact at Cerise+SPTF.

Financial investors committed to supporting responsible business conduct in agricultural and food systems can use it for due diligence, including screening, monitoring and reporting on the best business practices of their agribusiness investees.

Several agri-food businesses in parts of Africa and Asia have tested the tool, and the researchers have fine-tuned it to incorporate feedback. The think tank partnered with the Smallholder Safety Net Up-Scaling Programme (SSNUP) to conduct seven case studies in the regions to analyze how well their investees perform and comply with the Committee on World Food Security’s Principles for Responsible Investment in Agriculture and Food Systems (CFS-RAI).

“The field testing led to an understanding of gaps and issues with several ASEAN companies, and we prepared an action plan for the next steps. We have also produced case studies as learning tools based on findings. A next step is to start working with industry associations to ‘mainstream’ the use of the RAI Tool,” concludes Mirza.