RCF aligned to Green Bond Principles and Green Loan Principles

The Green CRAs issued to capitalise the Responsible Commodities Facility (RCF) has obtained a Second Party Opinion (SPO) from environmental advisory firm ERM-NINT.

The report concluded that the RCF’s Cerrado Programme is in alignment with both the Green Bond Principles (GBP) of the International Capital Market Association (ICMA), and the Green Loan Principles (GLP).

ERM-NINT conducted a complete review and assessed the four core components of the Principles in the category of ‘living natural resources and land use projects’ which includes environmentally sustainable agriculture and preservation of natural landscapes. 

In three of four components of the analysis, ERM-NINT allocated the highest rating of ‘Leadership’ and in the fourth ‘Comfortable’ owing only to the RCF’s specific focus on DFC actions, and not on wider low-carbon agricultural practices. 

The report also made mention of the RCF’s “well structured Environmental Eligibility Criteria.”

“We are very pleased to announce this achievement for the RCF, and to be able to offer this additional assurance of integrity to investors, as we rapidly scale-up operations to increase capital allocation to create positive environmental impact in the Brazilian Cerrado.” Pedro Moura Costa, CEO of SIM, the designer and coordinator of the RCF.


Read the full report

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Eligibility Criteria for Cerrado Programme 1

The following eligibility criteria are required for participation in the Responsible Commodities Facility for Cerrado Programme 1 (see full description here):

Land use

The area of cultivation must not have had any deforestation and conversion of native vegetation since 1 Jan 2020*. Preference will be given to areas converted from abandoned pasture land to soy cultivation after 2008.

Forest Code Compliance

Farm land must be registered with the Cadastro Ambiental Rural (CAR). The farm must contain and maintain areas of native vegetation equivalent to those required for Legal Reserve and Areas of Permanent Protection (APPs) determined by the Forest code or have formally adhered to a Programme of Environmental Regularization (PRA) established by the state environmental agency**. The farm area must not overlap with public protected areas, indigenous lands and other traditional people and community lands (including ‘quilombolas territories’).

Land title

Farmers must have unquestionable right to use the land, be it as land title, land lease agreement, or another legally recognised form of land tenure (e.g., ‘posse’)

Legal Compliance

Farmers must demonstrate that they and their farms do not contravene any environmental or legal requirements, such as embargoes, environmental irregularities, contraventions of the labour legislation (including slave and child labour), non-compliance with the Soy Moratorium (if applicable), and internationally-accepted rules for the use of agrochemicals.

*Farmers occasionally request the conversion of small areas of native vegetation to conduct farm improvements (building storage areas, water reservoirs, etc.). Provided that these areas are small and not for the purpose of expansion of the agricultural area, RCF analyses and considers them eligible. In order to do so, RCF uses the concept of Minimal Level (of deforestation or conversion) as defined by the Accountability Framework Initiative Terms and Definitions, which states “To be considered consistent with no-deforestation or no-conversion commitments, minimal levels must generally meet the following conditions: Not exceed cumulative thresholds that are small both in absolute terms (e.g., no more than a few hectares) and relative to the area in question (e.g., no more than a small proportion of the site).”

**The RCF analyses Forest Code compliance by looking at single farms (defined as the area covered by a CAR) or bundles of individual CARs that, in combination, result in the desired area of native vegetation put under the protective status of the RCF.  This bundling should not be understood as a means of compliance with the Forest Code requirements and is not intended to release the farmer of the regularization process committed under the Forest Code rules (enrolment in the CAR, engagement in a PRA, etc.). In order to differentiate its metrics from those of the Forest Code, the RCF refers to areas of Excess Native Vegetation (ENV) as opposed to Excess Legal Reserve, to avoid confusion with areas legally categorised under the Forest Code.