Climate Change and Coffee

To close out 2021, we want to thank all our friends and colleagues for their continued support and commitment to impact.  It has been a shift from the year before, where COVID-19 led to isolation, uncertainty and introspection.  We continue evolving towards a new normal.  The new normal may not yet be crystalized, but sentiment indicates an energized commitment to climate action, diversity and inclusion, and sustainable innovation. We see more private capital flowing into climate tech, particularly in venture capital and growth equity.  Sustainability managers continue to see inflows, with ESG funds hitting a record of 3.8T AUM in Q3. At imvest we continue to help investors and entrepreneurs build diversified investment strategies with a tilt towards climate action and mitigation. Traditional agriculture and land use account for 17-31 percent of global Green House Gas (GHG) emissions, as such it is critical that the private and public sectors commit to impact investment in solutions.   90 percent of the planet’s soil is at risk of degradation by 2050 due to traditional farming and industrial production.  The GIIN’s 2020 survey suggests only 9 percent of impact assets under management (AUM) are allocated to sustainable agriculture, though a majority of investors have signaled they will increase commitments. An important area within sustainable agriculture that needs protecting and attention is coffee.  Coffee is a drink that connects the entire world.  We drink over 500 billion cups of coffee per year and approximately 90 percent of coffee production happens in developing countries.  Coffee is also the second most traded commodity behind crude oil.  Unfortunately, the supply of coffee is increasingly at risk from the effects of climate change and as a result so are the livelihoods of all the farmers that cultivate the fruit. Fortunately, there are a growing number of impact finance players that are assisting farmers in preparing for a changing future including Root Capital, Finca Ventures, and Oikocredit.  Root Capital, for example, provides farmers with financing whose credit needs are too large for microfinance and perceived too risky for commercial banks. Kevin “Lucas” (our amazing teammate at imvest) co-founded Who Is Coffee to assist farmers in reaching the specialty coffee markets.  Lucas has traveled throughout Colombia speaking to many coffee farmers about the challenges of climate change and sustainable agriculture.  In the below video, coffee farmers Ana Maria and Alejandro speak about the challenges they face. In a future imvest newsletter we will be describing how these challenges mentioned by Ana Maria and Alejandro are being solved by governments and businesses in this sector.