Seeing the impact of your investment is what really matters. In these uncertain and changing times, investing for impact has become increasingly important. At Lombard Odier, we have a long tradition of acting and thinking along the lines of sustainability and responsibility. As rethinkers, and over our long history, we have developed innovative investment vehicles so we can offer pioneering investment strategies to our clients.

We don’t just invest. We aspire to see the power of these investments and actively go behind the scenes to see the effect of our working capital. So we travelled to South America, to explore some of the companies where we use impact financing through LO Gateway Development finance¹. This is a fund of funds dedicated to development finance that we set up in 2014. The Impact Finance Fund (IFF) accompanied us on this trip and we have positioned this fund in our portfolios since 2015. From the bays of North Peru to the diverse landscapes of Colombia, we saw novel ways to farm sustainably, tackle waste issues and pioneering production of organic and fair trade produce.

Seacorp – ending the exploitation of our oceans

Starting in Sechura Bay, in the North of Peru, we met Seacorp. An established scallop fishery, their mission is to fight the battle against overfishing and ensure that ocean life continues to develop. They have established a ground-breaking laboratory where they grow scallop larvae in hatcheries and then replant them in the ocean. Not only are Seacorp creating more sustainable ways to fish, they offer their employees a good salary with social security helping to alleviate some of the unemployment and poverty that’s rife in their community.

Norandino – a fairer future

Global food production is unsustainable and many are looking for a way to responsibly feed the growing world population. We visited Norandino, in North Peru, a cooperative established in 1991, which is made up of 4,500 cocoa and coffee producers. Their mission is simple: To produce organic certified and fair trade products as well as managing the storage, processing and transformation of these products. The cooperative is tilted to improve the living conditions of the associated families and its social impact is huge in terms of employment, productivity gains, market access and education. Since the IFF has been financing them, the sales of the cooperatives have increased threefold.

Agrosol – improving lives

Agriculture is going through significant changes in today’s society. Agrosol, a cooperative in Piura, North Peru, focuses exclusively on the production of organic bananas. When we were there, it was clear to see that the coop plays a crucial role in enhancing the productivity and earnings of local farmers. They all share best practice and the coop is creating much-needed employment and making quality produce.

Villa Andina – the trend for organic

Organic is the fastest growing food sector in the US² and, according to Euromonitor International, foods and beverage offering health benefits, are set to hit a record high of $855 billion by 2021.³ Villa Andina, another SME financed by Impact Finance Fund, provides over 800 rural farmers in North Peru with technical assistance, seeds, organic and fair trade certification, logistics and project development. The goal of Villa Andina is to open up the international market of organic foods to these farmers. With the support of IFF, the farmers are able to process and export their production to the USA, Europe and Japan, substantially increasing their revenues. They have had a 14% uplift in sales since 2016.

Biolodos – waste not, want not

One of the by-products of modern-day society is the problem of waste. And it’s a threat to our waters. There are some true rethinkers in this space. And one of them is Biolodos. A waste water manufacturer in Fusagasuga, Colombia they have developed state-of-the-art technology based on natural eco-systems. Their technology decontaminates heavily polluted water and naturally transforms pollutants in the water into nontoxic dry earth residues. This completely natural process destroys 100% of the toxic substances and results in clean water that can be reused in industrial processes. Besides its obvious positive impact on the environment, Biolodos has a programme that supports and helps reintegrate recovering addicts in the community. Biolodos received a loan from the IFF, the funds will be used to build a new plant and will increase the waste water treatment capacity. 

Terrafertil – a golden opportunity

Native to Brazil, goldenberries are a nutrient dense superfood⁴, extremely healthy and full of vitamins. Terrafertil, based in Ecuador and Colombia are the biggest dry goldenberry producer in the world, with a 90% share of the market, and an annual turnover of $50 million.  Working with over a thousand small producers in Ecuador and Colombia, Terrafertil buys their entire harvest at a fixed and fair price, providing them with a secure income, which is substantially higher and less volatile than the harvest prices for crops like potatoes and corn. A safer and more stable source of income, goldenberries offer up an interesting alternative to the production of cocoa for small farmers. Their method for processing is sustainable and the high quality goldenberries are exported through Latin America, the USA and Europe. We have indirectly financed Terrafertil since 2015 with working capital.

What impact really means

It’s important for investors to see just how far their investment efforts in the responsible space go. Today investing isn’t just about ticking a box. It’s about measuring the real influence of an investment and going “broader” and “deeper” with analytics, metrics and measuring the consequences. The ability to make a tangible difference whilst receiving returns is where our expertise lies. We’ve been refining our approach to impact investing for decades and we continue to believe in its power and purpose.

¹ LO Gateway Development Finance is a compartment “Lombard Odier Gateway”, a SICAV authorized and regulated by the Luxembourg Supervisory Authority of the Financial Sector (CSSF) as specialised investment funds (SIF) in accordance with the Luxembourg Law of 13 February 2007 relating to specialised investment funds, as amended (the “Law”). An investment in a SIF is restricted to well-informed investors as described in article 2 of the Law.
² https://www.ota.com/resources/market-analysis
³ https://blog.euromonitor.com/2017/02/free-organic-becomes-fastest-growing-health-wellness-categories-2016.html
⁴ http://www.superlife.com/what-are-goldenberries/