Summary
Below, we offer highlights for the field from a review of the first phase of foundation work to harness market forces for environmental conservation outcomes (2015-2020) — aimed at eliminating overfishing and the degradation of ecosystems that result from the production of globally traded agriculture and seafood commodities. In 2019, an internal strategic examination, an assessment from a panel of experts, and an independent evaluation by an external third party reviewed the design and implementation of the initiatives’ structure and grantmaking strategies, uncovered key lessons about this initial phase of work, and helped shape six adjustments for a second phase (2021-2026).
Background
In 2015, the Gordon and Betty Moore Foundation’s board of trustees approved a trio of interlinked and experimental markets initiatives — focused on forests and agriculture, oceans and seafood, and finance — within the foundation’s Environmental Conservation Program and centered around a unified goal to diminish threats posed to the world’s ecosystems by food commodities traded through international markets, by reducing the environmental footprint of these commodities’ production and harvest practices. The work was an expansion from the foundation’s historical place-based approach to conserving select intact ecosystems of global significance, by alleviating the pressures these ecosystems face from global, pervasive threats, including food production.
Authorized from 2015-2020 for a total of $221.8 million, each initiative set forth with its own portfolio of grants, designed to advance mutually complementary theories of change:
- For agriculture, improving soy and beef production in the Brazilian Amazon and Cerrado, and the Chaco in Argentina, and Paraguay by shifting to deforestation-free sourcing and production,
- For seafood, improving aquaculture and wild-capture fishing practices by shifting to sustainable sourcing and production,
- For finance, ensuring that the financial institutions that provide capital to companies involved in beef, leather, soy, and top-traded wild and farmed seafood commodities routinely scrutinize the business consequences of deforestation and habitat conversion, and of overfishing, and that the same institutions develop incentives for companies to eliminate risks associated with deforestation, habitat conversion, illegality and overfishing in their supply chains.
An external and independent evaluation, commissioned in 2019 to provide an objective analysis of the design and implementation of the initiatives’ structure and grantmaking strategies, offered key findings about this first phase of work, and helped shape adjustments for a second phase. In addition to the evaluation by CEA Consulting, an expert panel of seven individuals with sector-specific expertise, broad knowledge of relevant business and political environments, and experience in the wider ecosystem of organizations and initiatives working to promote sustainable commodity production and finance also reviewed the initiatives’ impact and theories of change and suggested several opportunities for the foundation to consider. Together with the foundation’s internal review of the initiative’s progress, challenges, and opportunities, these findings were all integrated into future planning for the foundation’s conservation and markets work.
Lessons from the first five years
The overarching theory of change was affirmed. Early progress by the foundation’s grantees for the conservation and markets portfolio verified the hypothesis that, by building on sectoral momentum and the food industries’ recognition of the imperative for change, forward-thinking agriculture and seafood companies would take further steps to clean their supply chains. In fact, evidence showed this progress was reinforced through the work of Moore Foundation grantees and other partners who collectively helped (1) change purchasing practices of major buyers, (2) set and strengthen standards for production and sourcing, and (3) shift production practices on the ground.
Grantees delivered an impressive range of accomplishments. From the outset of the conservation and markets grantmaking, investments supported grantees in their work with companies to improve sourcing for cattle, soy, and top-traded seafood. Early results showed that these groups produced key data and science-based tools that did effectively enable better public and private actor choices, aid companies implementing commitments to eliminate deforestation and overfishing from commodity supply chains, and ensure that companies changed practices and improved performance. As a consequence, and through sector-wide agreements rather than individual action, commodity production systems demonstrably improved in regions prioritized for greatest conservation need.
Credible messengers matter. As the work unfolded, it became clear that selecting partners who would be most credible with the corporate sector was critical: partners had to be the right, trusted messengers for the business audience. The expert panel reinforced this point, stressing in their own assessment the importance of identifying messengers with business acumen and best-in-class industry platforms, in order for corporate engagement to be successful.
Monitoring and evaluation can extend lessons and strengthen alignment. The evolution of the initiatives also crystallized the importance of continuous monitoring and evaluation. With clear outcomes and indicators of progress established at the outset, and adoption of a responsive, adaptive management plan, we were able to see learning accelerate, and greater alignment among partners.
Clarity of communication is essential. Likewise, it was clear that alignment was needed around unified messages and a core narrative in order to magnify the impact of the work. By being more explicit about how the foundation’s work and the work of our partners relate to one another and to parallel and other efforts, we will better be able to illustrate and advance changes in the field.
Funding sources each have important niches to fill. Finally, as a foundation, we must continue to be vigilant and self-critical about the role of philanthropy, evaluating where agile and targeted charitable investment is merited and necessary, and also where corporate buy-in and private-sector investment makes more sense and is needed for durability. A disciplined and ongoing analysis of our funding niche and the interventions that will make a difference are essential and ensure that we do not subsidize activities the private sector should fund, nor support NGOs for activities that market actors do not need.
Adjustments to a second phase of work
Building on the lessons and experience gained in the first phase of our markets work, the foundation has refined its approach and priorities for investment.
Adjustment 1: Merge agriculture, seafood, and finance into a single, streamlined Conservation and Markets Initiative. Foundation staff, external evaluators, and the expert panel all asked key questions about the extent to which the work of these markets initiatives had validated or contradicted the fundamental theory of change (did the approach have merit), the value of the commodity-by-commodity course charted for the work (what the optimal scale of focus would be for the initiatives), and the optimal sequencing of implementation across interdependent elements of the initiatives (was there evidence this had been deployed effectively). The evaluation affirmed the ability to influence corporate sourcing, trade, and production of high-risk food commodities and reduce environmental impacts in line with the theory of change as articulated and worthiness of further investment. However, the structure of three separate initiatives created inefficiencies and resulted in missed opportunities. One merged Conservation and Markets Initiative would mitigate these inefficiencies, while also optimizing corporate engagement, grant execution, and cross-initiative synergies. Additionally, with a single initiative, evaluators and the expert panel agreed that an increase in focus and attention on policy would reap further benefits.
Adjustment 2: Unify the finance strategy and place it in service of agriculture and seafood work. The evaluators and expert panel sought evidence that the behavior of financial institutions had been effective in creating incentives for corporations to adopt sustainability practices — and, in terms of deployment, if the activities supported by grantmaking were optimally coordinated between the finance-related endeavors and those specific to the agriculture or seafood work. In retrospect, there had indeed been limited success, but it was clear that the specific objectives of the agriculture and seafood commodity efforts would be better achieved with more tailored approaches to working with the financial institutions. At the same time, alignment of the finance interventions in direct support of agriculture and seafood objectives (rather than attempting to build momentum for investments based on ESG performance of companies, which is already accelerating), should enhance synergies across the streamlined Conservation and Markets Initiative. For example, the participation of investors in the Statement of Support for the Cerrado showed how powerful a focus on target agriculture (or seafood) companies can be. The finance work will continue to focus on interventions that support responsible production and sourcing of the food and agrobusiness companies they fund, and the previously developed tools and frameworks aimed at integrating natural resource factors into business decisions will be embedded into corporate engagement under the seafood and agriculture strategies.
Adjustment 3: Deploy “blended finance vehicles,” In order to implement the Conservation and Markets Initiative’s theory of change successfully, and for the changes to endure, we believe that certain “enabling conditions” must be in place. Analysis of the most significant conditions revealed the importance of providing capital to ease the early steps of transition to sustainable production. However, private finance is understandably less likely to flow where regulatory or political uncertainty prevail. For that reason, blended finance vehicles offer a solution, as a means of de-risking private investment by including public capital. These finance mechanisms are best developed in early and close collaboration with the financial industry (rather than non-profits). The initiative team will place more emphasis on developing appropriate grants in this area.
Adjustment 4: Support policies that level the playing field. At both local and international levels, policy can also help level the playing field for private sector actors and remove some of the risk barriers they would otherwise perceive. Foundation staff, the evaluators, and the expert panel all agreed on the importance of policy mechanisms to reinforce other grant-funded work. The evaluation supported the targeted expansion into policy that the Conservation and Markets Initiative team identified as a gap in 2017, however acknowledged that more could be done of this front. The expert panel recommended encouraging businesses and industry platforms to become constituencies for progressive government policies. As a result, the second phase of work will seize opportunities to integrate targeted policy interventions in the portfolio and mobilize the business sector as a champion for meaningful policy reform.
Adjustment 5: Continue to engage private sector actors around the financial case, while at the same time expand our tactics to include the full range of factors that motivate action by corporate decision makers. Foundation staff, evaluators, and members of the expert panel all sought and reaffirmed evidence of the economic rationale for businesses to produce and source their agriculture and seafood commodities more sustainably. This upside “business case” has helped, in some instances, to make conditions more favorable for the corporate sector to pursue durable changes in their supply chains. (Grant supported work showed clear financial benefits from sustainable intensified production of beef, soy, and shrimp, for example.) However, the centrality of the business case remains largely untested, and evidence also suggests that other efforts have gained traction in the absence of a strong financial case. In fact, incentives that motivate companies to adopt (or promise to adopt) changes in business practices can derive from myriad factors — some from a desire for short-term benefit for the bottom line, but others from concerns about “reputation,” e.g., being associated with illegality. The expert panel stressed the importance of going beyond the focus on profitability and financial return and instead embracing a wider range of behavioral factors that motivate corporate decision makers. In sum, the Conservation and Markets Initiative will continue to engage private sector actors around the financial case, while also investing in tactics that spotlight the case against continued “business as usual.” The team will adjust its theory of change to distinguish between the financial case for sustainability and the risks of “business as usual,” and create an explicit feedback loop, to clarify that the financial case strengthens over time as the market changes.
Adjustment 6: Invest in wider application opportunities for data and science-based tools. In determining what the full suite of conditions would be to bring about ultimate success for the Conservation and Markets Initiative, the expert panel noted that adoption of individual decision support tools or technologies developed for specific commodities with foundation support might be necessary but not sufficient. The expert panel recommended that wider adoption of the methods that the tools enable should be catalyzed, and that the funding strategies should reflect a more nuanced approach to promoting and testing the tools in supply chains that account for underlying barriers to adoption. External evaluators did find early evidence of interest and uptake of decision support technology. This finding reinforced that these tools could be instrumental — even if they are not sufficient on their own — in helping companies implement their commitments to improved sustainability. As a result, Moore funding will continue to support these key data and science-based tools, but with a future eye toward multi-commodity and multi-geography functionality and adoption across sectors, to advance uptake in the most effective fashion and expand impact beyond discrete actions in specific places.
Reauthorization for the next five years
In May 2020, to extend the progress that grantees and other partners made in the first five years that this work has been underway, and by incorporating the lessons and adjustments detailed above, the Moore Foundation’s trustees recommitted to our newly streamlined Conservation and Markets Initiative with an additional $173 million in grantmaking. That funding, from 2021-2026, will support continued work toward the same goal articulated when the funding first began in 2016: for a critical mass of market actors responsible for the production, sourcing, and financing of the highest-forest-risk commodities and top-traded seafood to delink their operations and investments from ecosystem degradation.
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