SAP participates in the new Livelihoods Carbon Fund with projects around the globe to protect the climate, restore ecosystems, and improve people’s lives.
Peru: At night, the temperature in the Andes drops to around zero degrees. The traditional fireplaces used by the population to cook and keep warm not only produce toxic smoke that has disastrous effects on their lungs and eyes; they also consume large quantities of wood and therefore accelerate the pace of deforestation in the region.
Since the Livelihoods Carbon Fund’s collaboration with the Instituto Trabajo y Familia (Institute for Work and Family, ITYF) began in 2016, 30,000 families have been equipped with efficient cooking stoves to heat their homes and prepare hot meals using 60% less wood, which means less smoke and lower emissions. Over the 14 years scheduled for this project, 150,000 people will benefit and 1 million tons less CO2 will be produced. At the same time, the project will help create jobs for people like Arqímedes Huamani, a project supervisor and bricklayer employed by the ITYF: “It makes me proud to improve the daily lives of so many families.”
Indonesia: Over the past 20 years, vast tracts of coastal forest in North Sumatra have been lost to palm oil plantations and rice fields, making coastal villages highly vulnerable to climatic hazards, such as the tsunami in 2004. The Livelihoods Carbon Fund supports the reforestation of mangroves that provide natural shelter from cyclones, tidal waves, and floods. The ecological benefits of its North Sumatra project – to plant trees that absorb CO2 and to recover biodiversity – are complemented by educational activities and micro-credits to help the local population set up businesses for products derived from the mangrove forests.
Five thousand hectares of mangrove forest and 18 million trees have been planted to capture two million tons of CO2 over 20 years, and the local economy is already benefitting from the rising population of shrimps, fish, and crabs in the mangroves. The project has improved the lives of 20,000 people in 39 villages, and incomes have grown by around 20%.
Kenya: The region around Mount Elgon is home to two million people. Deforestation and years of exhaustive farming have accelerated the erosion of fertile land here. Farmers are caught in a vicious circle of applying even more exhaustive methods while continuously earning less from lower yields. The Livelihoods Fund has partnered with Vi Agroforestry and Brookside Dairy to train farmers in agroforestry and crop diversification, with the aim of increasing crop yields by 30% and milk production almost thirty-fold in five years. A major dairy factory in the region, Brookside has committed to purchase all the milk produced in the next ten years. All this means a major improvement for farmers like Christine Musasia: “I expect big things in the future: to educate my children and become self-reliant”.
Nine Large-Scale Projects in Africa, Asia and Latin America
Projects in agroforestry, mangrove restoration, and rural energy not only help cut carbon emissions; they also bring income and meaning to the lives of thousands of people in the regions most affected by climate change. One million beneficiaries, 120,000 families equipped with efficient cooking stoves, 130 million trees planted, ten million tons of CO2 to be sequestered over 20 years, nine active projects in Africa, Asia, and Latin America, and €40 million invested: These are just some of the targets the Livelihoods Carbon Fund has either achieved already or is aiming at in the future. Supported by ten European companies, the Fund aims to finance large-scale development projects to improve the livelihoods of communities directly exposed to the consequences of climate change, and help them restore and preserve their ecosystems.
The Livelihoods Carbon Fund has an innovative business model that connects seemingly disparate worlds to create win-win situations for both investors and beneficiaries. It leverages the carbon economy to create social impact and thus contributes to the 17 United Nations Global Goals for Sustainable Development (also referred to as the UN SDGs or UN Global Goals), which include “Good Health and Well-Being” (UN SDG 3), “Decent Work and Economic Growth” (UN SDG 8), and “Life Below Water” (UN SDG 14). SAP’s investment in the Livelihoods Carbon Fund is another of its commitments to the UN Global Goals, in addition to the contribution it makes through its products.
Companies involved in the Livelihoods Carbon Fund, such as Crédit Agricole SA, Danone, La Poste, Hermès, Michelin, and SAP (the only German company) do not receive a financial return on their investment. Instead, they receive carbon credits to offset their carbon emissions. Because of their high social and environmental value, the projects funded are also supported by many governmental and non-governmental development organizations, including the French Development Agency (AFD) and the International Union for Conservation of Nature (IUCN).
“Wonderful Opportunity to Extend our Commitment”
SAP joined Livelihoods Carbon Fund #1 in 2013. Motivated by its outcome, SAP and seven other participating companies last year decided to establish another fund, Livelihoods Carbon Fund #2. Emmanuelle Brun Neckebrock, CFO of SAP France, represents SAP on the Investment Committee of the Livelihoods Funds and explains SAP’s motivation to join again: “The new carbon fund with its focus on ecosystem restoration, agroforestry, and energy projects is a perfect fit for our vision and purpose to help the world run better and improve people’s lives. It is a wonderful opportunity for us to extend our commitment and expand our support for the sustainability of rural communities worldwide.” The Livelihoods Carbon Fund is also a key component in SAP’s journey to implementing its “avoid-reduce-compensate” strategy and becoming a carbon-neutral company by 2025. Contributing not only to UN SDG 13 “Climate Action”, but also to UN SDG 7 “Affordable and Clean Energy”, UN SDG 15 “Life on Land”, UN SDG 10 “Reduced Inequalities” and UN SDG 17 “Partnerships for the Goals” also enriches SAP’s portfolio of projects.
Highlighting the additional benefits of SAP’s involvement, Emmanuelle says, “Partnering with other companies has always been key to the Livelihoods concept. It has been great to work with other purpose-driven companies on the fund – many of which are also our customers – to scale the impact, share investment risks, and jointly head for long-term success and even bigger impact.”
25 Million Tons of CO2 to be Prevented
The new fund aims to improve another 2 million lives in developing countries in Africa, South America, and Asia and to prevent 25 million tons of CO2 emissions within the next 20 years. The fund will also invite other companies and investors to join, with the objective of collecting €100 million from 2018 onward. And, just as in the first fund, the resulting carbon credits will be certified by the Gold Standard (created by the WWF) and the Verified Carbon Standard.
In a video greeting at the launch of the new fund on December 11, 2017, Brune Poirson, Secretary of State to the French Minister for Ecological and Inclusive Transition, highlighted the great social, economic, and environmental value of this innovative investment model in “giving sense to money” and accelerating the fight against climate change