In 2015, Unilever, Acumen, and the Clinton Giustra Enterprise Partnership (?Enterprise Partnership?) launched the ELII with the objective of dramatically improving the livelihoods of over 300,000 smallholder farmers by scaling businesses and linking them to global supply chains and distribution networks while creating a new model for development that catalyzes economic growth.
In the 3-year lifetime of the ELII, Unilever, Acumen, and the Enterprise Partnership aim to: 1) Invest in and jointly create at least six privately-held enterprises supporting low income communities and link them to Unilever?s supply chains. Demonstrate that such integration will result in faster profitability for the investee enterprises or farmer while fostering the development of an ecosystem of viable businesses and more efficient supply chains; 2) Using the models developed by the partners of ELII, create enterprises that aggregate smallholder farmers into supply chains where Unilever, or one of its large suppliers, is an ?anchor? customer. In addition, ELII will also create distribution enterprises that impact the lives of low-income women entrepreneurs and link them to Unilever?s distribution networks; 3) Demonstrate the financial viability of impact investing and its ability to create transformational change by scaling or creating innovative business models to meet the evolving demands of global supply chains; 4) Include additional partners with complementary supply chains, technical expertise, and grant-making or investment capacity to support enterprise development and impact measurement work; 5) Attract additional investment to further leverage and expand enterprises with a clear business case for investment; and, 6) Proactively disseminate the lessons learned from ELII to magnify the impact and support the development of new industry best-practices with the intention of catalyzing others, particularly corporations, to act.
Unilever has committed US million to this initiative and will partner with the Enterprise Partnership and Acumen to identify additional investments and partners aligned with the goals of the ELII that can provide more capital for investment as well as technical assistance and impact measurement. The Enterprise Partnership will also invest or facilitate US million to jointly create supply chain and distribution enterprises aligned with the goals of the ELII. Acumen will provide technical and management support to the investee enterprises. With operations in over 190 countries and over half their footprint is in developing and emerging markets, Unilever is able to bring the scale, influence, and resources to make this commitment transformative on a systematic level.
The Initiative will run over a 3 year period from 2015-17.
Unilever, Acumen, and the Enterprise Partnership will:
Form an investment advisory committee to foster collaboration and provide strategic advice regarding contemplated investments, aiming at overseeing the deployment of the million in funds committed as part of ELII.
Form a working group with a representative from each party that will facilitate development and evaluation of opportunities and collaborate in the identification of opportunities and oversee the process to develop and assess relative feasibility of the opportunities;
Start deploying the capital in identified opportunities in 2015, and ultimately invest in several impact companies (all having a positive social or environmental impact and viable commercial business model) over the duration of the ELII.
Develop goals and processes for monitoring, measuring and evaluating the impact of the collaborative activity and proactively disseminate the insights from the ELII to magnify the impact and support the development of new industry best-practices with the intention of catalyzing others, particularly corporations, to act.
According to the International Fund on Agricultural Development, 2.5 billion people are involved in smallholder agriculture globally, accounting for an estimated 500 million small farms producing 80 percent of the food consumed in emerging markets, from Southern Asia to sub-Saharan Africa. Smallholder farmers represent mass markets of potential suppliers, consumers, and employees. In addition, the increasing trend in global demand for food, driven in part by population growth and responsible sourcing of agricultural products by corporations, has created opportunities for the expansion of smallholder agriculture. Unfortunately, the key challenges and constraints of many farmers have been low productivity stemming from the lack of access to skill training, seeds and fertilizer, working capital, technology, affordable logistics solutions, and lack of access to the global market, which have led to the production of low-value crops, lower incomes, and lack of food security. Likewise, for corporations, responsible sourcing depends on tackling these key constraints to enable farmers to run viable, profitable farms that can guarantee a reliable supply of raw materials while incorporating sustainable and ethical farming practices. Many organizations, like the three represented here, are recognizing the enormous opportunity in rural markets and the need to help rural communities to move out of poverty; however, we also see critical gaps in the market ecosystems and key bottlenecks preventing a profitable presence at scale. While some constraints are unique to each country, most are of a similar nature, implying that if common solutions were available for each constraint these issues could be addressed across geographies. Therefore, the Enhancing Livelihoods Investment Initiative (ELII) will invest in agricultural enterprises and rural communities, remove these key bottlenecks, strengthen all preconditions for the transformation of smallholder agriculture from subsistence to commercial viability and a critical step to addressing food security and poverty, while building more inclusive and sustainable supply chains.
Acumen and Unilever are seeking 2 to 4 additional partners to contribute additional funds to support the ELII with a specific commitment by Acumen to identify another million for its investments in support of the ELII. These partners will ideally bring technical expertise within the sector, experience working in smallholder agriculture in emerging markets, and strong values alignment on serving the poor and linking global supply chains to smallholder farmer networks.
The ELII offers a new model for strengthening the ecosystem of social and agricultural enterprises as the long term sustainability of global supply chains. The commitment participants each bring broad networks of enterprises, experts, and a strong interest in sharing best practices that others can apply in enhancing livelihoods and strengthening global supply chains. With the emphasis of the ELII on impact measurement, the ELII will also offer data and lessons on how to support local enterprise development, and more effectively address the critical needs of low-income communities.