Established in Switzerland in 2010, Clarmondial is an independent investment advisory company, working on mobilising investments for sustainable natural resource management. Their focus lies on agriculture, forestry and conservation projects, primarily in emerging markets.
Learn more about Clarmondial and their interest in and added value for SWISSCO in the below interview with Fred Werneck (co-founder of Clarmondial) and Soumaila Diakite (Clarmondial West Africa).
As an investment advisory company, what is your connection to the cocoa sector?
Clarmondial designs and implements funding solutions that contribute to rural livelihoods, biodiversity conservation, climate mitigation and adaptation and regenerative agriculture. One of these solutions is the Food Securities Fund, which has successfully financed cocoa value chains in West Africa. Clarmondial has a local presence in Côte d’Ivoire, Kenya, and Costa Rica, and is expanding its local presence globally.
Clarmondial is also designing a new fund, the Biosphere Integrity Fund (“Biosphere”), for longer-term investments in value chains with a landscape approach. Its investment pipeline includes cocoa transactions in Latin America, Africa, and Asia - e.g., to finance on- and off-farm climate mitigation, income diversification and biodiversity-friendly value chains.
From your perspective, what is the biggest obstacle to achieving a more sustainable cocoa value chain?
Achieving a more sustainable cocoa value chain is a nuanced challenge that varies across different regions, as we have seen in Ecuador, Côte d’Ivoire, and Indonesia, for example. However, access to finance is a consistent theme and the need for specialized private financiers to fund the adoption of local and market-appropriate practices is growing. This includes financing for climate resilience, improving farmer livelihoods, and addressing existing and emerging regulations, such as the European Union’s Corporate Sustainability Directive, Sustainable Finance Disclosure Regulation, and deforestation-free supply chains and green claims. This increase in demand for finance is exacerbated by a more challenging macroeconomic environment, which is constraining traditional financing sources. Therefore, we believe that access to finance is a crucial cross-cutting challenge in achieving a more sustainable cocoa value chain.
What are you expecting from a membership in SWISSCO?
We are looking to strengthen and build relations with partners who are willing to explore and jointly implement solutions where access to additional private finance can enable impact. This means partners that are also willing to share implementation risk, and where the solutions are based on creating value for farmers, businesses, and financiers.
How can you contribute to achieving SWISSCO’s goals regarding enhanced sustainability in the cocoa value chain?
Clarmondial has been successful in proactively developing and realizing new approaches that mobilize funding for sustainable value chains and landscapes. In addition to designing collective investment vehicles (funds), we have also helped mobilize direct funding for smallholder coffee value chains, climate mitigation (e.g., through upfront financing carbon credit and insetting projects), biodiversity conservation and sustainable fisheries. We bring first-hand experience in different funding approaches and instruments, networks, and interest to collaborate with SWISSCO members on tackling sustainability and business challenges in cocoa value chains.
You have been in partnership with various organisations that promote so-called landscape approaches. As this is the core topic of SWISSCO’s new project cycle from 2023 onwards, which advise and lessons learned can you pass on to our members?
There is no single definition of a “landscape approach”. From our perspective, this term means that investments must generate locally appropriate positive impacts in the sourcing region, beyond the direct value chain. For example, companies enable both on- and off-farm restoration, climate mitigation, adaptation and resilience measures, and biodiversity conservation activities in a cocoa sourcing region.
Implementing landscape approaches can be challenging due to the involvement of various interventions and partners. We have learned that not all landscape interventions can or should be funded with private capital.
We have also learned that, while multi-stakeholder approaches are important, realizing impact requires parties that have compatible business interests and that can share implementation risk.
Our advice is to first identify a small set of partners with aligned long-term interests and quickly test working together. Focus on the issues that you can feasibly address, hold yourself accountable based on outcomes, and build a solid foundation as a basis for scaling and adding new dimensions.
We look forward to engaging with the SWISSCO network and exploring action on cocoa landscapes together!