Finance for Sustainability

One of the six principals of ofi and Olam’s Strategic Plan is to focus on Long-Term Value.

This depends in part on the active management of six non-financial capitals, which we report against in our annual reports. These capitals are not universally assessed in current reporting frameworks, despite driving a significant portion of a company’s market value, so we challenged ourselves to re-imagine business reporting.

 

Olam first began reporting against these capitals in its 2017 Annual Report. A task force has been setup since, to evaluate Olam’s approach to multi-capital accounting and establish a numerical link to sustainability using multi-capital accounting methodologies. This led to the development of the Integrated Impact Statement (IIS).

“Sustainability is at the heart of ofi. The IIS gives finance and business teams the needed numerical link between actions on the ground, as well as their impact and dependency on the Capitals. This will help in both improving the understanding of the Capitals and in taking necessary steps towards increasing the long-term value for the company.”

Rishi Kalra | Executive Director and Group Chief Financial Officer, ofi

Testing our methodologies

In 2018, Olam piloted the initial IIS tool with three business units – Dairy (Russia), Cocoa (Côte d’Ivoire) and Palm (Gabon) – covering Natural, Social and Human capital. The tool was also independently validated and shared with experts for their input and further refinement.

Making it business as usual

In 2019, a dedicated Finance for Sustainability (F4S) department was created to further develop the multi-capital accounting methodologies, to act as a centre of excellence and to help embed capitals accounting within the organisation. F4S will leverage the expertise of Finance and Accounting to help address the most pressing supply chain sustainability issues. To enhance business decision-making, the IIS is also being deployed at profit centre level.

Taking the initiative forward

F4S will uncover hidden costs and benefits not previously reported, support the leveraging of sustainable financing to address the most pressing supply chain sustainability issues and help support the business to “be the change for good food and a healthy future”. Our vision is to be a best-in-class business partner, responsible for maximizing long-term intrinsic value for all our stakeholders using non-financial drivers of value.

 

In 2021, we performed a monetary valuation of material natural capital (NC) impacts and dependencies by assigning an approximate monetary impact value. The outcomes are illustrated in our NC Profit and Loss statement (NC P&L) and NC Balance Sheet (NCBS) under the IIS.

Inspiring the Finance Leaders of Tomorrow

In collaboration with The Capitals Coalition, Ria Bakshi, Head of Sustainability Accounting, Reporting & Impact for ofi, shares more about the pathbreaking work the Finance for Sustainability (F4S) department has spearheaded in the Non-Financial Capital Accounting sphere, and how this is woven into the organisation’s business decision-making process in a simple, meaningful and transparent manner. This is all showcased in two courses that are free* to enrol on Coursera:

 

 

The objective of these courses is to transition from accounting for profit to accounting for business value delivered for people, the wider society, and the planet. It seeks to ignite businesses to contribute, collaborate and create methodologies which value impact from a lens that is not calibrated to just financial implications. 

 

*Coursera charges a fee to receive the course certificate for completion.

Internalization of externalities

F4S will internalize externalities via ourproduct platforms, supporting strategic financial business decisions and influencing significant stakeholders, bringing finance and sustainability concepts together.

Accountants’ culture and mindset change

With no formal framework for measuring these capitals, we needed a better way to measure, quantify and report our long-term “invisible” value. F4S will create partnerships and collaborations to grow this mindset. 

Common numerical language

We use a common numerical language – where applicable – that everyone can understand, evaluate and articulate. IIS allows ofi to explain the impact of our actions on the ground to all internal and external stakeholders.

Embedding multi-capital accounting

The IIS takes a systems approach that captures the complexity and reality of today’s diverse and intertwined “eco-agrifood” systems, providing a holistic picture to business decision-making, avoiding the risks and limitations inherent in simplistic metrics such as “productivity per hectare”, which ignores Natural Capital stocks, flows, outcomes and impacts. The IIS approach will increase business resilience, allowing ofi to make changes on the ground, to mitigate the risks associated with carbon taxes, biodiversity loss or procurement concerns. Uncovering these risks and opportunities will enable us to better prepare and respond to the challenges of tomorrow. 

 

We believe the IIS will positively change and differentiate the way we operate and with whom. We are better informed about our Natural, Social and Human capital impact and can provide actionable management information to better understand key impact areas (by farmer group, by country, by product, and devise more appropriate plans to address externalities and enhance positive impacts. ofi endeavours to become a resilient and more reliant partner for all our stakeholders by ensuring the creation of long-term value.

F4S in the News

At ofi, we believe our finance teams are well-positioned to help businesses embed sustainability issues into a company’s risk and performance management. Our work aims to re-imagine the valuation approach and integrate the positions of key non-financial capitals in our business decisions. Find out more on how we are driving conversations across different platforms and sharing more about our work.

A4S APAC Launch
Asia Pasific Chapter Of The CFO Leadership Network
F4S Sharing(Reuters)
How Olam, Natura & Co and Kering are taking a regenerative approach to their supply chains
Finance & Talent (FM)
Sustainability accountants: What do they do?
Insights On COP26(FM)
What COP26 commitments mean for accounting and finance
Natural Capital(BT)
Olam among first in Singapore market to report detailed natural capital accounts

How Olam is putting natural capital accounting into action 

In a new research paper by Eco-Business on the financial mechanisms to protect biodiversity, the Olam and ofi teams explain how we’re accounting for our impacts on the healthy future of our planetthrough our IIS. 

Better decision making by knowing the true value of food

The Olam team was pleased to contribute to the World Business Council for Sustainable Development’s (WBCSD) latest publication on the True Value of Food, aimed at guiding business leaders in accounting for the real value of food in their decisions and action.

FAQs

What is the Integrated Impact Statement?

The Capitals drive Long-Term Value and underpin a significant portion of a company’s market value. The Integrated Impact Statement (IIS) is a decision-making tool, which allows ofi to manage Long-Term Value. This tool will help embed sustainability concepts – such as multi-capital accounting – into the heart of our business, through finance.

 

The IIS tool is made up of 3 elements: Profit and Loss; Balance Sheet; and Risk and Opportunity Statement; and covers three Capitals;

 

Natural Capital: The land, water, biodiversity and other ecosystem services required for food, feed and fibre production. This includes the accounting for renewable and non-renewable environmental resources which ofi depends on for its long-term sustainable operations and associated externalities.

 

Social Capital: The relationships we forge and nurture for long-term commercial success. This includes the accounting for external stakeholders in society – community, institutions and ofi’s contributions to those relationships through its community-based programmes.

 

Human Capital: The talent, skills, dedication and inspiration of our workforce and management, and our responsibilities towards them. This includes the accounting for all internal stakeholders, our workforce and management – which ofi relies upon and contributes to, through training and capacity building – and safe and healthy workplaces where rights are respected.

 

Like a control tower, the IIS decision-making tool effectively reports and allows ofi to manage long-term value.

 

The IIS leverages existing frameworks by  Accounting for Sustainabilitythe Capitals Coalition and The Economics of Ecosystems and Biodiversity for Agriculture and Food (TEEBAgriFood).

 

Natural capital diagram

 

Source of framework: Capitals Coalition (https://capitalscoalition.org/)

 

What is the IIS Natural Capital scope and results?

F4S in 2019 developed the IIS for the Cocoa business. A summary of some insights from Cocoa’s IIS on key aspects of Natural Capital is presented in Olam’s Annual Report 2019.

 

The insights from IIS can positively change and differentiate the way we operate and with whom we operate. We are now better informed about our Natural, Social and Human Capital impact, and can provide actionable management information to enable our Business Units to better understand their key impact areas (by Farmer Group level, by country, by commodity), and devise more appropriate plans. This way ofi endeavours to become a resilient and more reliant partner for all our stakeholders by ensuring the creation of Long-Term Value.

 

The IIS Natural Capital valuation scope is detailed in the table below.

 

 Indicator 

Valuation Scope

Main Data 
 Inputs

Valuation 
 Approach

 Cost /
 Benefit

Country
 Specific

Watershed
 Specific

Biome
 Specific

 Land Use

 

 

Y

 Farmed
 Area 

 Gain in biome specific   benefits (Ecosystem
 services) 

 Benefit

 GHG
 Emissions

Y

 

 

 Total GHG
 emissions

 Social cost of carbon

 Cost

 GHG
 Sequestration

Y

 

 

 Carbon  Sequestered

 Benefit of sequestered carbon

 Benefit

 Water
 Consumption

 

Y

 

 Water 
 consumption

 Human and ecosystem damage cost

 Cost

 Water
 Pollution

 

Y

 

 Fertiliser 
 chemicals and components

 Human damage cost

 Cost

Capital accounting transparency (Caveat)

The ofi IIS is not related to financial results or financial reporting. All underlying methodologies are based on well-established databases and frameworks, but as they depend on formula and third-party expert studies, they can only ever be an approximation. The results are for internal purposes only. In the coming years, results could be readjusted according to further methodological refinements. Taken together however, the IIS is a valuable sustainability tool that can help uncover issues and provoke questions necessary to be the change for good food and a healthy future.

Read ofi news

Press Release May 13, 2025
ofi opens soluble coffee facility in Brazil, expanding its manufacturing capacity with focus on sustainable innovation
  • Landmark strategic investment in Linhares combines local economic development with ofi’s sustainability strategy
  • New facility complements ofi’s existing facilities in Vietnam and Spain, providing global customer base with high-quality freeze-dried and spray-dried instant coffee

 

ofi, a global leader in naturally good food and beverage ingredients, officially inaugurated its state-of-the-art soluble coffee facility in Linhares, Espírito Santo, Brazil on Friday, May 9th. The strategic investment strengthens ofi's position as a top 3 independent producer in the growing global soluble coffee market, projected to reach $52.2 billion by 2031[1], while creating significant economic impact in Brazil's premier coffee-growing region.

 

Located in the heart of Brazil's Conilon coffee region, the Linhares facility transforms coffee beans sourced from ofi’s coffee units across Brazil into premium soluble products. Serving a global network of customers, the Linhares site has two complete lines of freeze-dried and spray-dried instant coffee, thereby maximizing output and material efficiency.

 

"This inauguration represents a triple win – for local communities, for our customers, and for the environment," said Vivek Verma, ofi’s Managing Director & CEO, coffee. "By processing coffee at the source, we're strengthening our integrated supply chain and farmer partnerships to deliver traceable, sustainable soluble coffee products to our customers. A strengthened innovation infrastructure focusing on value-added coffee products will build growth opportunities in South and North America, while also serving consumption markets in Europe and Asia. I would like to thank the Espírito Santo state government for establishing an enabling business environment.”

 

Brazil is of strategic importance to ofi’s portfolio – with operations across coffee, cocoa and spices having been developed over the past 24 years. The Linhares site was selected due to the abundant Conilon coffee production in the Espírito Santo region which provides approximately 70% of Brazil's output[2] - a potential growth driver for the global supply of robusta coffee beans. The site complements ofi’s existing soluble coffee processing facilities in Spain and Vietnam.

 

Sustainable by design, innovative by nature

 

Sustainability is built into every aspect of the Linhares operation, in line with ofi's "Choices for Change" strategy. It is powered by 100% renewable electricity and biomass boilers that convert coffee production waste into energy, helping to reduce the carbon footprint of ofi and its customers. The beans supplied to the facility are fully traceable and the soluble coffee produced from the facility is certified by the Rainforest Alliance.

 

The facility features cutting-edge technology for producing diverse soluble coffee products, with a state-of-the-art Freeze Dryer that uses energy-efficient methods. It also incorporates ofi's new soluble coffee innovation center, building on an integrated global network of 19 innovation centers – across ofi’s portfolio of cocoa, coffee, dairy, nuts and spices.

Press Release Apr 23, 2025
Nestlé and ofi launch global agroforestry partnership in largest collaboration yet
  • Approximately 25,000 farmers across Brazil, Côte d'Ivoire and Nigeria will be trained and supported to convert their farms to agroforestry and implement crop residue management
  • The aim is to plant over 2.8 million trees and cultivate more than 72,000 hectares of agroforestry as part of a transition to regenerative agriculture.
  • It’s estimated to cut more than 1.5 million tons of CO2 over the next 30 years from these activities

 

Nestlé, the world’s largest food and beverage company and ofi (olam food ingredients), a global leader in naturally good food and beverage ingredients and solutions, are launching their largest-ever joint cocoa agroforestry partnership to reduce carbon emissions and combat deforestation.

 

As the cocoa industry faces the dual challenges of rising demand and increased environmental pressures, Nestlé and ofi are stepping up their efforts to create a more sustainable future for cocoa production.

 

Spanning Nigeria, Côte d'Ivoire, and Brazil, approximately 25,000 farmers will be supported in transitioning to climate-smart farming, over a 5-year period in each country by implementing agroforestry and crop residue management[1]. These activities will be monitored until 2055, with ofi’s carbon footprinting experts estimating they can cut carbon emissions by 1.5 million tons of CO2 over the next 30 years.  

 

The project aims to cultivate more than 72,000 hectares of agroforestry, as part of a transition to regenerative agriculture. This includes planting an estimated 2.8 million trees, which will be 3rd party verified, from the nursery to the farm. The baselines for these activities have been established using ofi’s AI-powered Carbon Stock Monitoring tool and will be used continuously to track the geolocation of the trees and that they are growing to comply with the objectives set out by Nestlé and ofi.

 

The global partnership builds on 15 years of Nestlé and ofi collaborating on sustainable cocoa and is their largest joint agroforestry initiative to date. It is designed to support Nestlé’s Cocoa Plan and 2050 Net Zero targets while also contributing towards ofi’s Cocoa Compass sustainability ambition, which introduced new targets for regenerative agriculture.  These feed into ofi’s overarching sustainability strategy, Choices for Change, with a vision of being the preferred partner for positive change.

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