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October 04, 2014
$50 Million to be Invested in Sustainable Agriculture
    by Robert Kropp

Community Capital Management commits to investing $50 million of fixed income investments in sustainable agriculture initiatives.


In 2012, RSF Social Finance produced a forward-looking report entitled Bridg ing the Gaps: Funding and Social Equity Across the Food System Supply Chain. “Innovative financing solutions that meet the needs of businesses and that support social and environmental solutions are required to create positive change in the food system,” the report concluded. “a variety of funding mechanisms, including grants, from aligned individuals and organizations will be needed to support this work.”

An example of funding occurred in 2011, when the Community Development Financial Institutions Fund (CDFI Fund) awarded 12 CDFIs a total of $25 million to increase access to affordable healthy foods in underserved areas.

Recently, the Florida-based fixed income investment adviser Community Capital Management (CCM)—which has invested $8 million in bonds that benefit sustainable agriculture to date—announced a commitment to increasing its investments in sustainable agriculture to $50 million.

"The sustainable agriculture movement is growing and as a result, impact investors are increasingly able to add it to a menu of mission choices that align with their social and financial objectives," said Barbara VanScoy, chief impact investment officer at CCM. "While still relatively new, there are opportunities for market-rate investors to direct capital to opportunities that support and nurture a local, sustainable agricultural economy."

In a five-page report, CCM defines the goals of sustainable agriculture as “environmental health, economic profitability, and social and economic equity. This includes stewardship on both natural resources and human resources.” The advantages over the current corporate system, in which produce is transported by an average of 2,000 miles, are pronounced. “Local food systems reduce the transportation and energy costs of food production,” the report states. “It links consumers and local farmers, contributing to individual and community health. In addition, food dollars are more likely to stay within the local economies.”

Fixed-income investment vehicles described in the report include municipal bonds, issued by state and local governments. Municipal bonds have helped fund such projects as Red Sun Farms, in Pulaski County, VA. The Minnesota Rural Finance Authority extends affordable credit to eligible farmers through a number of financing programs.

Government-related securities, issued by federal agencies such as the US Department of Agriculture (USDA) and the Small Business Administration (SBA), have helped fund the development of Firefly Farms, a Maryland-based goat cheese producer, and Rooster Valley Farm School, a pre-school based in Washington state that emphasizes hands-on learning through farming activities.

 

 
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