Focus on systems change leads the way in 2021 IDH Annual Report

2021 IDH Annual Report Cover

IDH is proud to release its 2021 Annual Report (PDF) chronicling the first year of our new five-year funding cycle. This year marks the adoption of systems change as our core purpose. IDH puts people, progress and planet at the heart of trade by leveraging the power of markets to achieve systems change that creates better jobs, better incomes and a better environment for all.

At IDH we see an opportunity at the nexus of climate change and inequality to regenerate trade in a way that better serves people and planet. Over the course of 2021, IDH collaborated with 735 partners around the world, including 275 private sector actors to implement 70 programs in 13 sectors.  

Systems Change as an organizing principle

When initiating any project or partnership, IDH develops a holistic view of the entire ecosystem, identifying leverage points where small adjustments can yield big returns. Our 2021 Annual Report explores our systems change approach in the way that IDH’s Farmfit Fund, Farmfit Business Support and Farmfit Intelligence combine to generate tailor-made opportunities for companies and markets to shift how value chains operate for the good of people and planet.

In 2021, Farmfit Fund invested a total of €3.5 million in three organizations, including a forward-leaning coffee cooperative in Nicaragua with over 6,200 coffee farmer members; a financial technology company that streamlines access to financing for smallholders; and an aquaculture company in Mozambique that works with smallholders to serve the growing demand for fish in African markets.

Creating a pathway for better jobs

A key aspect of IDH’s work is convening stakeholders across the supply chain to develop strategies that address sustainability challenges. IDH’s 2021 Living Wage Summit brought 190 participants from 70 private sector companies and several governments together online to explore how to collectively achieve living wages for workers. IDH’s Roadmap on Living Wages now counts with 49 organizations at different stages of their living wage journey.

Many of these companies used IDH’s Salary Matrix tool to understand wage gaps that exist in given sectors. In particular, data gathered in Salary Matrix covering 200 banana plantations was used to understand the severity of the gap between what workers earn and a living wage. It was found that 45 percent of participating farms showed living wage gaps with 32 percent of all workers earning less than a living wage. IDH is now working with groups of retailers in the Netherlands, Germany and the United Kingdom to collaborate on strategies to close wage gaps.

Coming together for better incomes

Similar to our work on living wages and better working conditions, IDH launched the Roadmap on Living Income to bring together stakeholders to improve incomes for smallholder farmers.  The Roadmap provides the private sector with specific steps for closing living income gaps in their supply chains.

In 2021, much of our work on better incomes focused on cocoa, where a large gap exists between what farming families earn and what’s needed for a living income. The Belgian Beyond Chocolate partnership, for example, brings together private sector actors to test and learn from smart interventions to improve incomes.

The work continues in 2022 with the development of a multi-stakeholder framework for action to close living income gaps. This tool is being developed with the Living Income Community of Practices, members of the Living Income Roadmap Steering Committee, in partnership with the Business Commission on Tackling Inequality.

Taking a landscape approach for a better environment

The world faces dual crises of climate change and the loss of biodiversity largely due to the way goods and crops are produced around the world. It is possible to adapt to and mitigate the effects of a changing climate, but it will require systems change across a variety of sectors.

IDH convenes collaborative platforms to ignite commitments on emissions and sustainability efforts change enable markets and farmers to transition to nature-positive production. Locally-owned green growth plans protect and restore ecosystems while providing for community needs. In 2021, over 1 million hectares of forest land were being managed improved conservation or protection practices.

IDH’s landscape approach is evident in the development of the first deforestation-free beef in Brazil where encroachment on conservation areas by cattle farms was exacerbating deforestation in Mato Grosso. IDH supported the development of a Production-Protection-Inclusion Compact, which brokered agreement among a wide range of stakeholders. This compact led to the development of a program that reduces pressure on conservation areas and improves practices for farmers. The program counts with 457 farmers protecting a total conservation area of 153,000 hectares of tropical forest and a total pasture area of 102,464 hectares.

Recognizing and elevating the role of women

Gender is a cross-cutting theme across all of IDH’s work. In 2021, IDH partnered with the Consultative Group to Assist the Poor (CGAP) to host “Gender Transformative Business Models: Opportunity to Action”. This virtual and in-person event brought together over 400 participants and 20 speakers from private and public organizations, financial institutions, and service providers working directly with the rural poor across value chains.

IDH is committed to gender equality, aiming to ensure that 100 percent of our programs integrate a gender transformative approach by 2030. IDH and CGAP will continue to work together creating a roadmap to help companies in agricultural value chains and food systems sectors to build evidence, generate buy-in, create allies, and make the shift towards gender-transformative business models.

Read the complete 2021 IDH Annual Report

Along with an exploration of our impact themes – Better Jobs, Better Incomes, Better Environment, and Gender – our 2021 Annual Report includes an in-depth annex exploring how our focus on systems change comes to life across all of our projects.

Download the full report here (PDF 15MB).