Responsible Commodities Facility

Supporting the production and trading of responsible soy from Brazil

Growing demand for soy is leading to the deforestation of large tracts of Cerrado vegetation in Brazil, with associated GHG emissions and loss of biodiversity.

However, it is possible for a robust soy sector to exist and even expand without further clearing of natural vegetation.

The Responsible Commodities Facility (RCF) is an initiative to promote the production and trading of responsible soy in Brazil, by creating a financially sustainable vehicle to provide incentives to farmers and help meet the growing international demand for zero-deforestation supply chains.

The Facility will structure a series of programmes to tackle this environmental challenge using different approaches and financial mechanisms.

RCF Cerrado Programme 1

The RCF Cerrado Programme 1 is the first programme of the RCF.

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Independent Monitoring and Verification

The Facility uses sophisticated technology to screen farmers for compliance with its environmental Eligibility Criteria.

Farms are continuously monitored and independently verified at the end of each crop cycle.

Compliance with environmental criteria and the impacts of the Facility’s operations are reported to an Environmental Advisory Board and investors.

RCF Environmental Governance

The operations of the RCF are guided by a set of Eligibility Criteria to ensure that the facility produces the impacts desired. The Eligibility Criteria were designed/developed in collaboration with many parties, including WWF Brasil, The Nature Conservancy, Conservation International, IPAM, Proforest and UN Environment. 

During the first two years of the RCF, these parties formed an Environmental Committee that reviewed and advised on the RCF operations, the farms selected for participation, and the impacts generated.

As it scales up, the RCF will engage ERM-NINT, a dedicated service provider to conduct independent verification of its activities and impact.

At the same time, RCF is a member of IFACC (Innovative Finance for the Amazon, Cerrado, and Chaco, managed by UN Environment, TNC, and the Tropical Forest Alliance) and operates in accordance with their criteria.

Members of the former Environmental Committee have joined the RCF Environmental Advisory Board.

Environmental Advisory Board

An Environmental Advisory Board provides strategic input to the RCF, with relation to its operations, expansion plans, and any amendments to its environmental governance or criteria.

Members of the EAB (and their alternates) and their organisations, are:  

Greg Fishbein – The Nature Conservancy

Ivo Mulder (Martin Hallé) – UN Environment

Lilian Vendrametto – Conservation International

Fabrício de Campos – Sustainable Finance expert

Isabella Freire Vitali (Jane Lino) – Proforest

André Guimarães – IPAM

Beto Mesquita (secretariat of the board) – BVRio

Statements of Environmental Impact

The environmental impact of its programmes will be independently verified and discussed with the Environmental Advisory Board, to be reported to financial supporters.

Statements of Environmental Impact will be issued with the pro-rata impact of individual investments, stating, for instance:

  • The amount of Deforestation and Conversion-free soy produced

  • The area of native vegetation conserved in the production areas financed by the RCF

  • The amount of carbon stored in these farms.

Partnerships and supporters

The Cerrado Programme 1 complements other responsible soy production initiatives such as the UK Soy Manifesto, the Consumer Goods Forum’s Forest Positive Coalition, and is a member of the Innovative Finance for the Amazon, Cerrado, and Chaco (IFACC), managed by UNEP Finance, TNC, and the Tropical Forest Alliance.

The Facility has received financial and institutional support from other organisations, including:

Awards

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.