Article: Entrepreneurship as a pathway out of poverty

Written by: William Saab (Senior Consultant), supported by Jennifer Morton (Analyst).  Also posted on LinkedIn.

Thinking Differently: Farmer Entrepreneurship in the Cocoa Sector

The need for a more sustainable sector where farmers and their communities can prosper and thrive is a broadly shared conviction within the cocoa sector. To bring this situation about, efforts within the sector have mainly focused on enhancing farm productivity, and in turn, farm incomes. However, perceptions about how best to support smallholder farmers are rapidly changing. I believe that the question we should be focusing on is how to put farmers at the heart of the system as empowered actors who are central players in the sector’s development. In short, how can farmers fully realize their potential as entrepreneurs?

Recently, I was asked to share my ideas during the plenary session of the 2018 Chocoa Conference on 23rd February, entitled “Sustainability beyond cocoa production: supporting farmers to become entrepreneurs”. What follows here is an outline of my vision: an ideal future state in which farmers in the cocoa sector are entrepreneurs in a thriving and inclusive market.

Cocoa Farming and the Market 

Like my colleagues at NewForesight, I believe there are market-based solutions to many sustainability challenges. This is because many of the issues we are addressing are caused by the market in the first place, most often market failures or distortions.

When thinking about how to support farmers, in cocoa and other commodity sectors, to become entrepreneurs, a few questions immediately come to mind:

  • How can cocoa farmers be entrepreneurs if they have no—or limited—choices?
  • How can there be choices for entrepreneurs without a functioning market for goods and services?
  • How can there be a functioning market when the providers of services and goods do not treat farmers as customers, but as (often passive) recipients of aid?

I believe that there are four key elements for creating a functioning market where farmers act as autonomous and thriving entrepreneurs: better data and insights, evidence-based approaches, service delivery as a business, and systemic solutions.

In this article, I want to touch on each of these, giving examples of promising trends, before sharing my vision of how these elements ideally all come together.

1. Better data and insights

In my work, I deal a lot with data, as I focus on supporting clients to evaluate the business case of their sustainability interventions at the farm- and company-levels. Crucial to my work is having the ability to make informed analyses and decisions based on quality data. The more quality data we have, the better our understanding will be of the actual situation of cocoa farmers. And the better our understanding of cocoa farmers, the more we are able to consider these farmers as individuals who have different characteristics, challenges, wishes, needs, and opportunities and who require and desire different things from those who are trying to support them.

Until now, especially on the level of smallholder farmers, data is typically scarce, not accessible or shared, and if available, often of sub-optimal quality. Yet, there are very promising recent developments in the cocoa sector which are driving availability of, and access to, better data at various levels. For example, organizations such as KIT (research forthcoming) and CGAP have come out with excellent data at the farm and household levels, and best of all, have made this data public—an invaluable resource for practitioners in the field. I believe the opportunities opened up by these recent trends in data availability can be transformative in shaping how we approach sustainable economic development at the farm level.

2. Evidence-based approaches

Sustainability thinking in the cocoa sector and beyond has evolved towards looking at impact and outcomes much more than in the past. Now, we are asking questions such as: which interventions will work and how? Under which conditions do interventions make sense? And what type of farmer will benefit from these interventions?

The cocoa sector is clearly moving more in this direction. Traditionally, the focus of interventions has mostly been increasing farm-level productivity through training and providing access to inputs such as phytosanitary products and fertilizers. Yet, this situation is evolving, and organizations are looking beyond productivity. The CocoaAction Farmer Economic Model began to drive this kind of thinking a few years back with a tool that allows users to project the expected farm-level business case under various assumptions using adjustable variables, including and beyond productivity. More recently, Fairtrade has published a living income strategy, which focuses on looking at a broader range of variables, including non-cocoa income and the cocoa price, as a necessary means to achieve sustainable cocoa farming across economic, social and environmental dimensions. The Living Income Community of Practice has similarly been set up as an open platform to drive new ways of measuring living income and identify strategies to close existing income gaps.

By looking beyond productivity, intervention design can be better tailored to actual conditions. As a practical example, cocoa trees have declining yields as they age, and so at a certain point, the positive impact from using expensive inputs will no longer be worth the investment cost. These kinds of insights are only possible by looking at cocoa farming in a holistic manner and designing interventions around outcome-based thinking.

3. Service delivery as a business

I strongly believe that for cocoa farmers to become entrepreneurs, they need to be served by a professional market which delivers in-demand goods and services, for example training and knowledge, inputs, equipment and financial products. Providers of goods and services in such a market need to view farmers as customers rather than as recipients of aid. A necessary corollary of this requires that the providers of goods and services see their service delivery as a business. They must focus continually on improving the efficiency, effectiveness, and sustainability of their models. When service providers start to compete on these three factors, the landscape becomes competitive and only those models which outdo their competitors on these elements will thrive. Such a thriving market creates the foundation for the necessary replicability and scalability to achieve transformational change in the cocoa sector. By necessity, performance is naturally driven upwards over time as different service providers are forced to innovate in order to stay afloat, meet the (evolving) needs of their customers (i.e., farmers) and remain competitive in the market.

I get the most energy from working on sustainability challenges with the private sector, and I see more companies—both inside and outside the cocoa sector—now viewing service delivery as a business, and no longer as a cost center. A fascinating piece of work is the Service Delivery Models work that IDH has been driving for the past few years—with the support of NewForesight—in which they are using a common methodology to analyze the service delivery models of dozens of organizations across different sectors, commodities and geographies. The Smallholder Insights Report released in December 2017 summarizes the exciting, overarching findings from a comparative analysis of the 30 different service delivery models that have been analyzed so far.

4. Systemic solutions

Most of the challenges in the cocoa sector are systemic in nature. Their causes are often linked to forces at the sector, national, regional and global levels, and are always intricately linked to a broader context. These causes are beyond the power of any individual actor to resolve.

Like the systemic nature of the challenges, the solution will likewise need to be systemic in nature. In cocoa, the private sector, governments, civil society and others must work together to create a sustainable system and sector. Perhaps most importantly, a truly sustainable and inclusive cocoa sector must have at its heart its key stakeholders: autonomous, entrepreneurial and empowered farmers, who take their own decisions and have a real say in designing this ideal system.

Can we move towards such a system? I think we can, and landmark partnerships and initiatives are pushing in this direction. One recent example which is bringing together various types of stakeholders in an inclusive way is the Partnership for Productivity Protection and Resilience in Cocoa Landscapes in Ghana and the Cocoa and Forests Initiative which focus on tackling deforestation issues in the sector in a multi-stakeholder way. Another key partnership is the International Cocoa Organization (ICCO) which seeks to be an inclusive forum bringing together all stakeholder groups, including farmers and farmer organizations, who all agree to a single vision for the sector and commit to joint action to bring this about. The upcoming ICCO Global Cocoa Agenda Monitoring Framework, developed by NewForesight and to be introduced at the April 2018 World Cocoa Conference, is an example of an integrated approach to developing a shared vision and common monitoring framework, committed to by a broad range of stakeholders, to assess progress towards commitments and impact at a sector level.

An Ideal End-State

So, what does my view of an ideal end-state which I have outlined above, look like?

(1)  The sector is composed of entrepreneurial farmers, and all stakeholders in the sector respect the autonomy of, and difference between, various types of farmers, including their different characteristics, desires, and ambitions;

(2)  Services are available to farmers based on their specific needs and desires, rather than one-size-fits-all solutions which are only focused on one dimension such as increasing productivity;

(3)  These goods and services are offered to farmers as part of a functioning market, in which farmers are seen as customers rather than passive beneficiaries who must be helped, where service providers gain business from their customers by competing and continuously improving on impact, efficiency and sustainability;

(4) Finally, this functioning market brings together a multitude of stakeholders, including, at the core, farmers, each of whom recognizes their own limits while seeking synergies and complementarity with others to bring about shared opportunities and lasting sustainable change.

In this article, I have shared my thoughts on a pathway towards a more resilient and empowered cocoa sector, with entrepreneurial farmers at its heart. I hope to have shown that at least part of the solution can be found through market interventions, and that a (considerate) business approach to sustainability has the potential to empower and improve lives.

Have I succeeded in sparking your interest? Please let me know what you think of this article, through  

William Saab is a Senior Consultant at NewForesight Consultancy, where he loves analyzing the business case for sustainability at the farm, company and sector levels. He leads NewForesight’s work in economic and quantitative analysis, which includes building dynamic models to measure the impact of sustainability interventions at various levels.

Jennifer Morton is an Analyst at NewForesight Consultancy where she focuses on systems thinking, sustainable development and transformative change. At NewForesight, she has played a key role in the development of the Organic Cotton Accelerator (OCA)—a market-driven sustainability partnership among major fashion brands driving systemic solutions to farm-level impact in organic cotton.

NewForesight is looking for Strategy Consultants

Are you ready to tackle the toughest sustainability challenges of our time with the world’s leading multinationals and public organizations?

In a time where we are confronted with increasingly complex and global sustainability challenges, the question is not whether you will deal with them, but how. At NewForesight we turn these challenges into shared opportunities and sustainable value on the intersection of business transformation, global value chains, and local realities. Since 2008 we have been supporting the world’s leading multinationals, multistakeholder platforms, and public and not-for-profit organizations to turn their vision into real-world impact.

As a NewForesight Consultant you will be in the lead for the development and realization of strategies, partnerships, programs, governance, and business models designed to deliver structural, positive impact in global sectors.

You will join a dynamic team of passionate consultants and experts with a varied background ranging from strategy consulting for Fortune 500 companies to international development at the World Bank. As a team we’re proud to have built a culture of constructive feedback, delivering industry-leading results, and finding creative solutions to complex problems.

Our long-term clients include the world’s biggest commodity traders, cocoa grinders, and coffee roasters; leading multistakeholder platforms in nearly every major agri-commodity sector; governments; development agencies; donors; and standard setting organizations. A selection of our clients you can find here.

Our company is growing fast, our client base is expanding, and we see opportunities everywhere. And we want you to join us in taking our company to the next level.

Are you up for these challenges?

The Challenge: It is poorly understood what type of support structurally improves the livelihoods of producers in developing countries, and what the economic, social, and ecological return on investment of this support is.

Your assignment: Dive deep into the business model and strategy of a major multinational, and support them by developing an analytical model that will help to compare different intervention practices and improve the effectiveness of sustainability efforts. Go one step further by designing the model to provide complete financial statements that enable them to take well-informed investment decisions.

The Challenge: Certification of sustainable production of coffee, cocoa, palm oil, and other commodities is not delivering on its promise for structural improvement of livelihoods and tackling sector-wide problems. Organizations want to move ‘beyond certification’, but do not know what the alternatives are.

Your assignment: Develop an approach that ensures all producers in a region are incentivized to adopt responsible practices, whilst creating the right scale for tackling sector-wide problems with broad stakeholder buy-in, and offering a value proposition to involve both industry and local governments. Drive impact on a global scale by making the approach replicable in other regions and sectors, with an innovative financing structure that leverages new instruments such as (Social) Impact Bonds.

Enthusiastic? If so, you could be our new (Senior) Consultant.

NewForesight Consultancy is looking to expand its team with a (Senior) Consultant who:

  • Takes the lead in connecting to clients directly and advising senior-level counterparts, from the strategic to the practical;
  • Further develops NewForesight’s models and thinking;
  • Goes the extra mile to serve our clients and delivers industry leading outcomes, with a focus on building long-term partnerships;
  • Is seasoned in leading strategic consulting assignments, effectively managing the project, client relationship, and the growth and development of your team;
  • Plays an active role in the growth of the organization by taking ownership of further growing specific parts of our business and client base;
  • As a Senior Consultant you will help develop the company’s strategy, business development, acquisition, and design the future of NewForesight as part of our management team.

Convinced? Then convince us! Please apply with your cover letter and CV by 28 March 2018 through Breezy

Meet our Strategy Advisors

Recently, we welcomed our second Strategy Advisor Ted van der Put, who previously worked as Director and Executive Board member at IDH. NewForesight’s Strategy Advisors are like-minded, driven senior consultants that work in collaboration with our team to tackle sustainability challenges systemically. We interviewed Ted and our other Strategy Advisor Wouter-Jan Schouten, who carries over 20 years of experience in management consulting at The Boston Consulting Group, to learn about their reasons for joining NewForesight.

Why did you decide to collaborate with NewForesight?

Ted Van der Put: I think it is an honor to be Strategy Advisor of NewForesight. This new role indicates my appreciation for NewForesight’s systemic way of working. We have the mutual intention to work together more closely in the future and add value to one each other’s work.

Wouter-Jan Schouten: I appreciate NewForesight for being a mission-driven consulting company that works on the transition of Food and Agriculture systems. Together, we advocate the need for these transitions and shape coalitions to work towards our mission.

What do you aim to achieve by working with NewForesight?

Ted Van der Put: We are all in search of ways to effectively solve the main bottlenecks in agricultural chains, using a systems approach. Essential in a systems approach is the convening of senior parties. It is my mission to bring together existing – though fragmented – initiatives and to ensure that stakeholders have a shared vision. By working with NewForesight, in addition to my ongoing support to IDH, the sustainable trade initiative, I hope to address these challenges even more.

Wouter-Jan Schouten: The food system is in need of transition. This transition offers tremendous opportunities for value creation. We have to take landscape approaches that aim for achieving regenerative agriculture systems with neutral or positive impact on soils, water and biodiversity. These landscape approaches will only work if we transform value chains to generate pull for regenerative agriculture production. We have to take a landscape approach where regenerative soils and ecosystems are central. In collaboration with NewForesight, we do our utmost to bring together and support coalitions that can drive the transition of our food systems. The past 3 years of collaboration with NewForesight have been fruitful; we published the New Horizons paper, published an assessment of major FMCG companies, and a lot more. I am excited to continue our journey!

Upcoming publication on Market Transformation is looking for sector-experts

Do you want to contribute to a book about transforming sectors towards sustainability and expand your network with like-minded sustainability frontrunners within and beyond your sector?

NewForesight Consultancy and Nyenrode Business University are developing a new book on sustainable market transformation, to be published by Taylor & Francis and as a respected sector expert, we invite you to join us and (co-)author a chapter. It will apply systems thinking to sustainable market transformation, showing how sectors go through phases of market transformation before reaching “full” sustainability. The book will not only be sold internationally, it will also be used as curriculum at business schools and by international companies to drive their sustainability and CSR strategies.

Interested to join this publication? Then we invite you to a full-day workshop, closed with network drinks, at Nyenrode Business University on March 16, 2018.

What’s in it for you?

  • A high-energy workshop where you will be introduced to market transformation thinking by Lucas Simons, CEO, and founder of NewForesight and writer of Changing the Food Game as well as Andre Nijhof, Professor in Sustainable Business and Stewardship at Nyenrode.
  • Get a crash course in putting your thinking into writing as a potential (co-)author of a sector-chapter in the book.
  • Share learnings on sustainability progress with other sector-experts and expand your network

Sign up here to join the workshop

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About Changing The Food Game and the theory of Market Transformation

  • The book Changing the Food Game, published by Lucas Simons and widely used at business schools, presents a new set of models for how sectors transform towards sustainability in phases.
  • The phases provide insight into the dynamics dominating a given sector, and what approaches and alliances can catalyze the transition to the next stage of a sector’s sustainability
  • This cornerstone ‘phases thinking’ concept helps change-makers understand how a sector’s progress towards sustainability is not linear, but instead a complex process consisting of ‘maturity’ phases.
  • The first chapter of the Changing the Food Game can be downloaded here (PDF).


Frequently Asked Questions

Q. Which sectors can be covered in the book?
A. We are open for different sectors, but the main focus lies on: Agriculture, Automotive, Apparel/Textile, Consumer electronics, Health care, Mining Energy (Oil&Gas), Financial, Construction, Education, Tourism, Transportation&Logistics and Petrochemical.

Q. Will the transportation costs to and from Nyenrode be reimbursed?
A. For the workshop transportation costs to/from Nyenrode will not be reimbursed

Q. Will food and drinks be provided during the day?
A. Yes, as well as networking drinks following the workshop.

Q. If I attend the workshop, does it automatically mean that I will be a co-author of the book?
A. Not necessarily. During the workshop, the sectors will be confirmed, the next steps (planning of the writing process) will be discussed and you will be offered the opportunity to join the writing team.

Q. Do I have to be responsible for a whole chapter or can I be part of a sector-chapter team?
A. It is possible to co-write a sector chapter. You can either propose a co-author or we can help find a good match.

Q. What is the timeline after the Workshop on the 16th of March?
A. A specific timeline will be discussed during the Workshop. Sector-chapters are to be finished by November 2018 and the entire book finalized by March 2019.

Q. What is the contact information in the case of any questions?
A. You can direct any questions to and we will come back to you as soon as possible.

Five reasons why 2018 will be a great year for sustainability

1. Business-case thinking becomes the new normal for sustainability 

Through 2017 we saw a growing demand from clients to further integrate sustainability into core business functions, regarding investments in sustainable production and supply chains as de-risking and value-adding.

This takes sustainability further out of the sphere of ‘nice to do’ and into ‘need to do’, with fact-driven decision making and a business-mindset; the core of what we have been doing for our clients over the past decade—and we are glad to see it become the dominant approach. Read more in our blog post.

2. Effective partnerships in sustainability increasingly revolve around setting shared and measurable goals

Both public and private clients increasingly see the critical role of shared goals when effectively collaborating. The SDGs, whatever your opinion on them is, offer a great framework for supporting this discussion with clients, competitors, and partners. We have listed 4 steps to use the SDGs in business strategy here.

For us a great example here was the KPI Framework developed for the International Cocoa Organization (ICCO), unifying the global cocoa sector behind a common set of goals.

In 2017, we are proud to have supported the Organic Cotton Accelerator, the Global Coffee Platform, and the Green Protein Alliance in unlocking new levels of sustainability in their sectors through effective collaboration.

3. Collaboration is recognized as key to sector-wide impact

Experience shows that fragmented and isolated sustainability initiatives, no matter how good their intentions and approach, do not lead to structural change. The only way to address the systemic barriers to sustainability is a holistic, collaborative approach that broadly engages sector stakeholders, whilst connecting and strengthening current efforts.

4. Data and new technologies continue to offer new avenues to sustainability

Technological advances in areas such as machine learning, big data, remote sensing and Internet-of-Things are increasing, and their costs have dropped dramatically. One development that grabs our attention is blockchain technology, which we expect will turn the world of traceability on its head when real-world applications hit the market in 2018.

5. The younger generation steps up

We can all agree that as a global community, we have never faced bigger challenges than climate change, plastic soup, and nutrient collapse. Instead of this being discouraging, it has the ability to drive us. Through our teaching activities, presentations, and recruitment, we see the continuously growing ambitions and sense of urgency of young professionals wanting to create positive change on a large scale.

In April this year we organized our first Young agents of Change event to inspire and train over 30 young professionals to work on real-life cases for global sustainability change. And at the start of 2018, the NewForesight team is set to grow by more than 40%. Our new office is starting to fill up quickly!

Shifting sustainability focus from output to outcomes: Three examples from practice

A​t​ NewForesight​,​ we have been working strategically with sustainability frontrunners in many different sectors for almost a decade. We see sustainability thinking moving to new stages, we increasingly support our clients​ with the shift from ​output-focused approaches​​​​ to outcome-focused approaches (one of the three key trends that shape sustainability thinking, discussed in the blog post of our consultant Guus ter Haar), something that is supported strongly by our unique approach to market transformation.

The questions that rise mostly out of these recent developments are:

  • How ​can such a framework be implement​ed​ effectively?
  • W​hat does it mean to put outcome-focused efforts in practice both ​at ​the strategic and operational levels?

Below we share some of the highlights of our experience to answer these questions with our clients.

  1. Taking global priorities to local relevance with one of our corporate clients

For industry players, investments are now more than ever expected to bring returns in tangible, structural impact. Working towards their sustainability and risk management goals, certification and farmer training initiatives are no longer seen as enough and companies are restructuring their sustainability approaches beyond certification.

One of our corporate clients, a front runner in coffee sustainability, has taken the first steps in establishing an approach for advancing the development of sustainable coffee producing regions. Through alignment with global and national platforms, they are effectively translating global goals to local priorities. This approach, which we have designed with them, is the first of its kind in coffee, and focuses on co-creation with local stakeholders, working to strengthen local capacity and initiatives to create lasting impact.

  1. Working towards outcome-based standards together with ISEAL

Standards are recognized globally for catalyzing improvements and operationalizing sustainability, but are also pressured to rapidly adapt their systems in order to improve sustainability performance, become more efficient and deliver more value for users throughout the supply chain.

The ISEAL Alliance, the global association for sustainability standards systems, works to strengthen sustainability standards’ systems for the benefit of people and the environment. Now that a significant number of standard-setting organizations are undergoing a standard revision, many are exploring ways to design their standards to better achieve the sustainability outcomes of their system.

To support ISEAL in providing guidance to their members in this process, NewForesight delivers the insights into the system-level implications and key considerations for ‘outcome-based’ standards, both at the design as the operational level. Later this year ISEAL and NewForesight will publish a report for ISEAL members on those implications.

  1. Development of an outcome-focused international KPI framework for The International Cocoa Organization

Platforms are more and more expected to go beyond facilitation, driving real progress and delivering results. The International Cocoa Organization (ICCO) is a global organization, composed of both cocoa producing and cocoa consuming member countries and has set up of The Global Cocoa Agenda (GCA) in 2012. The GCA functions as a roadmap for the global cocoa economy and it is the most comprehensive definition of ‘shared responsibility’ for sustainable cocoa production globally to date. The GCA outlines roles, responsibilities and actions for all major stakeholder groups involved in a sustainable cocoa sector and sets a systematic and strategic approach to promote the production, trade, processing and consumption of sustainable cocoa.

In order to properly monitor the GCA, NewForesight supports the Consultative Board of ICCO in the development of a comprehensive KPI-framework, measuring outcomes and impact at an international scale.

Want to know if an outcome-focused approach fits within your organization, and would you like to know how? Contact our inspirational strategist and senior consultant Joost Gorter, for a consultation on the topic.

Beyond agriculture: sequel to ‘Changing the Food Game’ takes wide scope

Did you know that it has already been three years since​ NewForesight CEO Lucas Simons’ book​  ‘Changing the Food Game’ was published? The book that offers a game-changing solution to transform markets towards sustainability has been read by thousands, has been highly recommended by various industry leaders, and was even incorporated into the curricula of university business programs. André Nijhoff, Professor of Sustainable Business & Stewardship and coordinator of the MBA programs at Nyenrode Business University, regularly invites Lucas as a guest lecturer to discuss ‘Changing the Food Game’ with his students.

The lectures Lucas organizes within Nyenrode are accelerating the debate on systemic transformation towards sustainability. Finding the tipping points for sustainable change becomes a discussion with top managers from many different sectors beyond agriculture. According to André Nijhoff, “Both students and managers are always inspired by the vision of Lucas on sustainable market transformation, because he is able to make complex issues comprehensible. After his classes, they often use his models in their assignments and last year alone, seven participants wrote their thesis about market transformation and transition.”

At three different programs of Nyenrode, Lucas gives multiple lectures each year, and during these sessions it became inevitably clear: the market transformation strategies of ‘Changing the Food Game’ create significant value when they are applied to the sustainability issues of non-agricultural sectors as well. André commented:

“We discovered that Lucas’ models are also interesting and applicable for managers who are working in, for example, the financial or public sector. This is because Lucas’ approach goes beyond the scope of one company or organization alone. Lucas doesn’t start with the sustainable issues within an organization, but motivates others to think about how to change the system by telling a unique personal story that motivates everyone in the audience. This helicopter view gives organizations many insights into the problems they need to solve, and how they can work in collaboration with others. These insights show the same patterns for different sectors and organizations and are widely recognizable beyond food and agriculture.”

Speaking on sustainable transformation with many experts in a wide range of sectors at Nyenrode and beyond has inspired the development of a sequel to ‘Changing the Food Game’. This next edition will include cases on sectors beyond agriculture and André will support the set-up of the new edition together with NBU graduate students. Sectors included are, for instance, the financial, energy and seafood sectors. André says he is “looking forward to the outcomes of the different cases and the patterns and phases of change they will show.”

The book will mark a new phase in the debate on market transformation, leveraging a wealth of information that supports sustainable change. At NewForesight, we will keep you updated upon its arrival, but you can also keep an eye on the website of Changing the Food Game:

NewForesight invited at FMO for keynote talk on using finance for tackling complex sustainability challenges

Finance plays a huge role in the growth and development of smallholder agricultural sectors, and it is estimated that smallholder farmers around the globe represent a demand of $450 billion in agricultural finance. Regrettably, only a small fraction of around $10 billion of this demand is currently satisfied. This represents both a tremendous challenge to the development and professionalization of these farmers, as well as an opportunity for structural and positive change—if we are able to successfully unlock supply of and access to this remaining $440 billion.

Therefore, we were thrilled to be invited by the Netherlands Enterprise Agency (RVO) to address a group of agricultural professionals from Colombia, Iran, Saudi Arabia, India, Nigeria, South Africa, Vietnam and Kazakhstan to give a keynote talk on how finance can play a part in addressing the challenges that come with tackling complex sustainability challenges in agriculture. Hosted by the FMO, Netherlands Development Finance Company, the talk given by Hilde van Duijn (Senior Consultant) and Niko Wojtynia (Analyst) sparked a lively discussion between the foreign visitors, FMO staff, representatives of the Dutch government as well as organizations like IDH (the Sustainable Trade Initiative), and the presenters.

The presentation focused on the global challenges of agriculture and the importance of farmer organizations and cooperatives when working with smallholder farmers who are not conventionally considered ‘bankable’. Hilde incorporated examples of her experience in organic cotton, where payment of price differentials (or ‘premiums’) often do not reach the farmer, and showed how ‘factoring finance’ can offer an inclusive solution throughout the supply chain and at farm level. Niko demonstrated how securing access to finance has been found to be a key driver of successful Service Delivery Models (supply chain structures that provide services to farmers to increase their performance and profitability, see the image below); the result of 30 real-world case studies performed by NewForesight for partner IDH, comparing such services across the globe.

Hilde and Niko left the meeting both inspired and humbled: inspired by the visitors’ enthusiasm to drive change in their respective sectors, and humbled by their direct experience with many of the issues broached in the talk. We look forward to continuing this conversation with all frontrunner organizations that see the opportunities for positive impact contained in tacking this challenge.

Image: The FMO building (by FMO)

Image: Finance within Service Delivery Models (from FMO presentation)

Combining Ambition and Realism: 4 steps for business to leverage the SDGs and maximize their impact

By Jennifer Morton, Analyst at NewForesight

Companies today are looked to more than ever to drive the sustainability agenda, at a time when such challenges are increasing in complexity and scale. This leaves organizations which seek to lead in sustainability facing the balancing act of having to set ambitious goals while being mindful of the reputational risks that can make or break their business. Yet, solving tough sustainability challenges is not up to one company alone. Meeting the SDGs requires different sector stakeholders joining forces and aligning their resources and efforts to drive lasting impact together.

The UN Global Sustainable Development Goals (SDGs) have emerged as an essential tool for creating a common frame of reference for global sustainability efforts. Using the SDGs, different actors can set targets and track their progress and impact according to an internationally recognized sustainability framework, using collaboration and shared learning to create lasting change.

In this context, how can individual companies play their part in the collective efforts that are needed to achieve the global goals? Our experience working with clients across diverse sectors has shown us that following these 4 steps can help companies derive the most value from the SDGs–for the wider good and for their business:

  1. Aligning with the SDGs in focal areas of sustainability
  2. Translating SDG-aligned goals into quantifiable targets
  3. Implementing robust credibility frameworks to communicate real impact
  4. Collaborating to go further, together
  1. Align with the SDGs in focal areas of sustainability

The SDG framework is one of the most powerful tools companies have to ensure their sustainability efforts are aligned with, and understood as part of, a broader improvement agenda. Yet, the SDGs are often considered too high-level or generic for companies to engage with, and no company alone can solve all the global goals.

To uncover the value of the SDGs, companies should focus on select elements at the core of their sustainable business activities, and map (or even quantify) how these translate into progress towards specific SDG targets. Ensuring such linkages are communicated in the common language the SDGs provide is important for ensuring companies can more directly attribute any progress achieved to the result of their activities.

  1. Translate your SDG-aligned goals into quantifiable targets

To turn this mapping exercise into actionable progress towards the SDGs, the next step requires setting company-level goals. To be effective, such goals must be S.M.A.R.T—specific, achievable, realistic, timely—and, crucially, measurable. In a study by Bain & Company, setting quantifiable targets was found to be the most critical factor behind successful flagship corporate sustainability programs. Alongside galvanizing a sense of shared mission and ambition internally within the organization, quantifiable targets were found to instill a culture of transparency between these companies and their stakeholders. This helped to enhance the value of these firms’ sustainability impact, whilst an attitude of openness, learning, and improvement helped mitigate any reputational risks.

The challenge comes in ensuring any quantifiable targets set by companies are both relatable to the SDGs, as well as realistic for your company. This raises a number of crucial questions, such as:

  • On what topic does your company possess the capacity, know-how and resources to make a credible contribution to the SDGs?
  • What are realistic SDG-linked targets for your company given the wider enabling environment you operate in?
  • How can you secure internal alignment for these SDG-aligned goals and targets, as well as widespread external legitimacy and support for your efforts?

As many companies today operate in complex supply chains across many countries worldwide, it can be extremely complex to find answers to these questions. A standardized method for mapping, evaluating, and monitoring sustainability interventions in a supply chain, such as the Service Delivery Models (SDM) approach, can help companies assess the wider sustainability contexts they operate in, and gain concrete data and insights about the impact of their current sustainability efforts. By using this model, which we have developed in partnership with IDH, businesses are better able to articulate areas where they can credibly contribute to the SDGs, and focus their resources in areas where they can actually have tangible and structural positive impact. In doing so, companies have the tools they need to decide on realistic targets when setting S.M.A.R.T goals.

  1. Implement robust credibility frameworks to communicate real impact

Crucially, using the SDGs in a way that generates value and impact requires having the ability to make credible claims on impact. For this, credibility mechanisms are key. One powerful mechanism for driving this credibility is a ‘Progress Framework’ which is crucial for helping companies monitor sustainability progress, ensure credible data gathering, and provide concrete and verifiable data to communicate impact to stakeholders.

However, tracking progress without a solid Theory of Change (‘how do your activities lead to your vision of a better world?’) can lead to companies ‘disconnecting’ themselves in the process of communicating their impact. The way M&E data is communicated often has an unspecified or unclear connection to the wider landscape of sustainability. Such misalignment risks a company’s sustainability efforts not having the desired effect of engaging stakeholders and society in their initiatives, and blocks collaboration on sector-wide or global sustainability challenges.

The SDGs offer the ‘golden ticket’ for avoiding this common trap. Based on our experience designing Progress Frameworks for our clients, credibility mechanisms are most effective when SDG alignment is part of their design—starting with the initial indicator selection process, all the way to progress reporting tailored to the SDGs and their specific language. Such an approach ensures that companies can generate relatable and understandable results to ensure their sustainability efforts are part of a larger story, and that their impact is recognized accordingly.

  1. Go far, together

Acting alone, companies can move fast in addressing sustainability issues, especially those that are limited to their own supply chain. However, the old adage rings true, that going further requires going together. The final SDG17–’partnering for the goals’–recognizes that cross-sector partnerships are critical for tackling the root causes of tough sustainability challenges, which often require the involvement of stakeholders such as local industry and government. Such partnerships should thus not be seen as separate goals, but integral in the approach to tackling any of the SDGs.

From organizing governance in sectors from cocoa, to coffee, to cotton, we have experienced first-hand the importance of creating the right incentives for stakeholders to collaborate. On a multi-stakeholder level, SDG-aligned target setting and progress reporting is vital, and this involves sector-wide goals, targets and Progress Frameworks. The CocoaAction Roadmap which we worked on with the World Cocoa Foundation, one of our long-term partners, is an example of these crucial components put into practice.

For a sector-level initiative to make sense for individual businesses, companies have to see the value in being part of a multi-stakeholder sustainability solution. In implementing transformational sustainability programs, companies are often in unchartered waters. Yet, by working together and setting long-term commitments, the weight of such a significant undertaking no longer falls on one company’s shoulders. Instead, there is an alliance of companies who are in it together for the long run, working towards a common goal with a shared, actionable strategy and a framework for progress tracking. Only then are risks and responsibilities shared and distributed between the collaborators, and the impact of their individual efforts are increased through synergy. That way, they really stand stronger together.

Want to know more on taking steps to make the SDGs work for your company?

At NewForesight, we understand the pressures and opportunities that companies in the public limelight are facing. Contact us to find out how we can help you take the steps you need to leverage the SDGs and turn your sustainability challenges into shared opportunities.

New additions to the NewForesight team

At NewForesight, creating lasting impact is an important company value, but it is the people behind the company that drive the change. We are therefore happy to have added a talented combination of people to the team in the past months. Each of them has their own unique talent, and together they bring a broad range of perspectives to the team. Head to their bio’s to get know them.