SIM and DFCD join forces to scale climate-resilient soy production in the Brazilian Cerrado

The Dutch Fund for Climate and Development (DFCD) intends to partner with Sustainable Investment Management (SIM) to support deforestation- and conversion-free (DCF) soy production in Brazil’s Cerrado biome through the development of the Responsible Commodities Facility (RCF).

The RCF Cerrado Programme was launched in 2022 and is financed through the issuance of Green CRAs (green bonds) and provides low-cost crop finance to soy farmers who commit to protecting native vegetation beyond legal requirements.

The RCF was put forward for the award by the World Wide Fund for Nature Netherlands (WWF-NL) as a new project within the Dutch Fund for Climate and Development. WWF-NL manages the DFCD’s Origination Facility together with SNV, a global development partner, to develop new projects for the climate investment fund.

WWF-NL intends to sign a €206,900 grant funding agreement with SIM. SIM will then carry out activities to design and implement a set of strategic upgrades to the RCF Cerrado Programme. These include the design of mechanisms to incentivise regenerative agriculture and restoration of degraded lands, improved traceability, and the development of gender and human rights policies. These efforts aim to align the programme with emerging supply chain regulations such as the EU Deforestation Regulation (EUDR) and to enhance its climate adaptation and biodiversity outcomes.

The Cerrado is one of the world’s most biodiverse savanna ecosystems and a critical agricultural frontier. However, it is increasingly vulnerable to climate change and land conversion. In the 2023–2024 crop season, El Niño-driven droughts led to severe yield losses for soy farmers, highlighting the urgent need for more resilient production systems.

In response, SIM is seeking DFCD Origination Facility (OF) grant funding to support the development of a set of mechanisms that will help reduce greenhouse gas emissions, improve soil and water health, and protect native vegetation.

The Origination Facility grant will be put towards the following activities:

  • Development of gender, human rights and stakeholder engagement policies
  • Design of regenerative agriculture protocols and blended finance structures 
  • Modelling of incentives for restoring degraded pastures 
  • Assessment of reforestation options 
  • Strengthening soy traceability systems 


These activities will enhance the RCF Cerrado Programme’s ability to deliver nature-positive, climate-resilient outcomes at scale.

By attracting further private financing, the programme forecasts the following impacts:

  • 107,968 tonnes of CO₂e sequestered annually 
  • 100,000 hectares of climate-resilient farmland 
  • 67,000 hectares of sustainably managed forest 

 

“The RCF has proven effective in promoting deforestation- and conversion-free (DCF) soy in the Cerrado, offering tailored credit to committed producers. With support from the DFCD, it can scale its impact, contributing to biome conservation, soil restoration, and the transition to regenerative agriculture. The initiative lays the groundwork for a systemic shift in Brazil’s commodity production, aligning agricultural development with environmental responsibility.” Fabrício de Campos, Senior Advisor LAC.

“We are very grateful for the support of DFCD, WWF-NL and WWF-Brazil in helping us to carry out these number of strategic upgrades to the RCF. These additional activities have been designed to further incentivize regenerative agriculture and restoration of degraded lands, improve soy traceability, and develop new gender and human rights policies. Pedro Moura Costa, CEO, SIM.

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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.