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Why Clif Bar created a multimillion-dollar fund to help farmers invest in resilience

The first focus: helping organics operations become hosts for wind turbines.

Slowly but surely, more companies are assuming more responsibility — in action, not just name — for encouraging investments in sustainable business practices throughout their supply chain.

Walmart’s Project Gigaton — which aims to help suppliers achieve more than 1 billion tons in greenhouse gas emissions reductions by 2030 — is one of the more visible examples. Last week, rival retailer Target moved in the same direction with a commitment to helping 80 percent of its own suppliers set science-based targets for their Scope 1 and Scope 2 emissions.

It’s far less common, however, to hear about the real money behind those initiatives.

Apple’s effort to catalyze $300 million toward clean energy projects in China stands as the most explicit and substantial illustration of a company using its influence to help its supply chain partners transition to renewable energy.

But a new effort orchestrated by organic energy bar company Clif Bar, called the Clif Ag Fund, is noteworthy for its focus on scaling the resources available to smaller companies — especially organic farmers — seeking to make their operations more resilient in the face of climate change.

The fund, backed with an initial investment of $10 million from Clif Bar and several as-yet-unnamed investors, will be used to help organic farmers finance projects such as transitioning to renewable energy, deploying infrastructure or adopting new technologies that can help improve an organization’s "economic resilience," said Matthew Dillon, senior director of agricultural policy and programs at Clif Bar.

"We want this fund to be a vehicle to explore those risks," Dillon told GreenBiz.

The purpose is to create resilience in our supply chain in order to create more resilience and stability for us as a business.
The company has an interest both in helping farmers respond to "shocks to your business," he said. But it recognizes that organic farmers may have deferred some of these investments: After all, the economic challenge of transitioning to organic farming methods over the three-year period required by the U.S. Department of Agriculture is already substantial. 

Clif Bar’s seed investment is $500,000, with the remaining $9.5 million to be contributed by investment partners.

"We aren’t set up to make money; the purpose of the fund is not to make money for Clif Bar," Dillon said. "The purpose is to create resilience in our supply chain in order to create more resilience and stability for us as a business. The money we do make will return to the fund."

The first set of investments will center on helping organic oat and pea farmers affiliated with Clif Bar suppliers Grain Millers and Puris participate in a program to host wind turbines on their property. The program is offered in collaboration with United Wind, a developer that created a leasing program with the purpose of helping smaller companies participate in distributed wind energy projects.

The fund won’t be limited to supporting clean power projects.
United Wind got its start offering leases in New York and Iowa. The fund first will target a couple hundred farms in Iowa, Minnesota, Montana, North Dakota and South Dakota. The first tranche of money can support the installation of up to 80 turbines, according to Clif Bar.

Farms will be selected using a number of criteria, such as the energy generation potential for a specific property and clusters of interest — it will be easier to support groups of farms in certain regions from a maintenance and production perspective, Dillon said. The leases will provide farms with a fixed price of electricity for a term of 20 to 30 years, with no upfront investment.

Clif Bar will consider expanding the program based on the interest, but the fund won’t be limited to supporting clean power projects. In the future, he said it might be used to support farmers’ investments in crop diversity or intercropping (the practice of planting fruit or nut trees between acres of other plants); or in technologies such as microbial seed treatments that help mitigate post-harvest crop losses. The fund could even be used for equipment such as grain elevators.

The new fund builds on Clif Bar’s own creativity and experience in making clean energy investments to reduce its emissions. For example, the company is building the largest "behind the meter" solar installation in the state of Idaho at its Twin Falls bakery, which is slated to go live this spring.

Clif Bar is also making a statement with a program called 50/50 by 2020, available to companies that manufacture or bake Clif Bar products. That initiative aims to get at least 50 partners committed to sourcing at least half the power used in those processes from clean or renewable sources. At least 44 partners have made that pledge, with most of those organizations committed to going all-in on renewable energy, according to the latest update on Clif Bar’s website.

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