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2020 ANNUAL REPORT

Global Annual Report 2020

Europe 2020

31 December 2020

2020 was a remarkable year for Solidaridad Europe and not just because of the pandemic that changed many of our plans and the way of working. Also noteworthy was that we have renewed many of our core partnerships with donors and corporate partners, and taken a firm step in the European policy arena with a call for mandatory rules and to Build Back Better.

Highlights

Enabling policy environment

Solidaridad Europe advocates for a policy environment that supports a sustainable and inclusive global economy. We have thus brought 39 issues to the agenda of policy makers and contributed to 3 new regulations that take into account the perspective of smallholder farmers and miners.

Sector transformation

Together with companies, Solidaridad supports global sustainable sector transformation. We worked with 47 European corporate partners to implement comprehensive policies and innovative inclusive business models for sustainable sourcing, production and investments.

Access to finance

Crowdfunding platform PlusPlus was launched and began its operation. The aim of PlusPlus is  connecting private investors in the Netherlands with small and medium-sized food entrepreneurs (borrowers) in Asia, Africa and Latin America to provide the latter with the much needed access to finance. These entrepreneurs play a key role in creating jobs and improving the livelihoods of the rural communities.

Diversifying income

A key goal of Solidaridad Europe was to diversify and increase income from new and existing institutional donors and foundations. We signed new donor contracts with a total value of 78 million euros to continue working globally in the years to come towards sustainable and inclusive supply chains.

Raising awareness

We raised awareness through publicity about the urgent need to support farmers and workers in various supply chains to create a global sustainable economy. The extensive reach (750 million people potentially reached) has helped us to create more European support for Solidaridad’s mission.

Strategic planning

The new European Multi-Annual Strategic Plan 2021-2025 was developed and published. We also strengthened planning, monitoring, evaluation and learning in various projects, corporate partnerships, and at the organizational level.

Results

32

Policy recommendations to public and private partners

46

Platforms, networks or dialogues convened

78M

Euro donor contracts signed

To general Europe page

A deep dive

Making waves

2020 brought incredible challenges with the Covid-19 pandemic, but also incredible opportunities. New partnerships, increased funding commitments, and headway in policy influencing paint the way for greater impact in this coming strategic period.

We are proud of the size and number of new grants signed. In the course of 2020, Solidaridad has signed new donor contracts with a total value of 78 million euros. We renewed our partnership with the Netherlands Ministry of Foreign Affairs through the Power of Voices facility as well as the extension of our Practice for Change partnership. These funds form the backbone for Solidaridad to implement the new strategy and provide a strong base for future growth. We also signed partnerships with the Netherlands Enterprise Agency and the Achmea Foundation. Diversification of income turned out to be harder in 2020. The pandemic has hindered the establishment of new donor relations.

Covid-19 has had a significant impact on implementation. Executing activities as planned was often impossible, therefore, we have discussed alternative ways to reach programme goals with donors. In addition, we have worked on the integration of Covid-19 response activities in many programmes. 

Despite these challenges, donors have expressed trust in the effectiveness and relevance of Solidaridad’s operations. A key lesson learnt here was that the entire sector, including donors, was dealing with similar challenges, meaning that there was flexibility provided by many partners to adapt our programming. 

Influencing policy developments in Europe and beyond is an essential part of our work. It promotes the adoption of responsible trade and business principles at the European level. We published a new policy paper calling for a smart mix of voluntary and mandatory measures as part of a European framework. In 2020 we frequently raised policy issues with governments and companies (39 in total, to be concrete), aiming to push these issues high on the agenda of private and public policy makers.

In the course of the year we felt the urgency to issue several calls to action stressing the importance of solidarity with farmers, miners and workers in producing countries in times of Covid-19. As European countries tried to mitigate the impact of the global pandemic for their own citizens, we urged governments and companies to also take responsibility for the farmers and workers outside Europe who produce our food, clothes, and jewellery, and who are disproportionately affected by the economic consequences of the global pandemic. Farmers and workers were hit hard in the early phases of the pandemic when supply chains started to break down, factories were closed, workers sent home without an income, and local food prices were rising sharply in certain regions. We advocated to Build Back Better, calling upon the government, companies, financial institutions, and civil society to seize the economic recovery phase of the pandemic as a chance to provide fair compensation to producers in developing countries. Our core message was that we must not return to the ‘untenable normal’, but instead ensure that we rebuild a society that focuses on resilience, global cooperation, social, economic and environmental sustainability, and justice.

In 2020 we completed the five-year programme Golden Line, in close collaboration with our partners Simavi and Healthy Entrepreneurs, aiming to increase the social and economic empowerment of women working in artisanal and small-scale gold mines. The ambitious programme aspired to change deeply rooted perceptions about gender relations in a male-dominated sphere. We have seen many positive effects which are reflected in the evaluation of the programme. The end evaluation concluded that the advocacy outcomes, collected through the method of Outcome Harvesting, are very significant and credible. At the international level, the outcomes show that targeted governments and market players have become increasingly aware of the importance of gender equality and responsible mining. These are results from Solidaridad Europe’s lobbying and awareness-raising activities. However, the extent to which advocacy efforts have influenced national or international policy developments has still been limited. Therefore, advocacy efforts with relevant international bodies and platforms should continue and preferably be intensified.

We are very proud of the renewed five-year partnership we have signed with our strategic partner Henkel. In addition, we have successfully continued the growth of our partnership with East-West Seed, having expanded it to 4 joint projects. We very much value the increasingly strategic discussions regarding global cooperation with this company on jointly providing important inputs and knowledge to farmers. In 2020 we have worked with 47 corporate partners in total, which is above our target of 40 partnerships, on implementing sustainable policies, practices and innovative inclusive business models. This includes sustainable investments, sourcing and production practices, and incorporating true costs.

There were some setbacks as well, such as the negative decisions of some companies not to collaborate after we had discussed joint programmes. For one well-known brand, the reputational risk we have highlighted in a thorough scoping study was overriding the high impact they could make in their supply chains, and has even led to their withdrawal from this sourcing area altogether. In another case, traditional certification was chosen above a very impactful and innovative beyond certification coffee programme. 

The Covid-19 pandemic caused many companies to cut costs on expenditures and staff for sustainability programmes, making it more difficult to agree on (new) partnership programmes, and in particular limiting their financial contribution substantially. Due to the general delay in programme execution, partnership development has also fallen behind. Moreover, we also noticed a shift in the focus of companies from long-term projects to short-term emergency relief for affected partners. Leveraging their more limited funding with public private partnership funding opportunities, we were still able to secure 8 new programmes which are planned to start in 2021.

In 2020 we were able to reap the fruits of our earlier work. With lessons learnt from the launch of previous barometers and rankings in our back pocket, we developed ambitious plans to launch the Sustainable Cotton Ranking in February and the Cocoa Barometer in December, together with our partners. We engaged large global and trade media channels which resulted in the highest annual reach ever, totalling a potential audience of over 750 million people worldwide throughout the year. Visibility is key to raising support from European citizens, companies and policy makers. Awareness about the situation of farmers and workers at the beginning of many value chains with an established market in Europe is important to create more support for inclusive policies and corporate social responsibility. This, in turn, advances our aim to be the best partner for sustainable change.

The reach of free publicity in creating visibility for Solidaridad and its messages was far higher than expected. We have evidently underestimated the powerful role that global news agencies like Reuters and Bloomberg increasingly play in voicing Solidaridad’s messages. For a number of years, only Solidaridad’s global corporate partners were able to access these global media wires. Now, we have direct access. 

Solidaridad aims to build knowledge and facilitate learning to deliver effective, efficient and relevant programming, and enable continuous improvement in the organization. In 2020 we evaluated our main policy influencing programme, Advocacy for Change, a partnership with the Dutch Ministry of Foreign Affairs. This evaluation resulted in a positive report with valuable lessons. It showed that multi-stakeholder platforms are an effective way to engage various stakeholders and deliver on a shared policy agenda. The evaluation concluded that Solidaridad’s advocacy programming was effective because we were seen as a credible and reliable partner, with a neutral, a-political positioning and a constructive approach. 

A great achievement was the development of an improved monitoring framework to support data collection in projects, and track progress on a selected number of key performance indicators. We developed a number of track records to support our fundraising efforts and show the impact of our work, such as the Track Record Livestock & Dairy and the Lessons Learned Report on landscape programming.

Innovation Areas

Insights

Farmer first

Inclusion, direct funding and climate finance, farmers and workers are centered in our continuous search for new ways to achieve our goals. 

Solidaridad is committed to continuously strengthening gender inclusivity in its structure and programming. In 2019 an internal assessment was undertaken to understand where we stand in Europe and where we want to go. One of the key recommendations was to continue with the principle of shared responsibility for gender inclusivity. Following the publication of ‘The Journey of Solidaridad towards Gender Inclusivity’ for partners and external stakeholders in 2019, we also published the ‘Solidaridad Gender Inclusivity Buckets Book’ in 2020. We developed a method for gender inclusive business case proposals and inclusivity guidelines for multi-stakeholder platforms. Based on our Multi-Annual Strategic Plan 2021-2025, our focus will be broadened to social inclusion, putting respect for diversity through equitable participation and benefit for all at the core of our European operation. 

Attracting financing remains difficult for many of the entrepreneurs we work with across the world. In 2020 Solidaridad achieved 2 important goals to help alleviate this pain.

Firstly, we launched our crowdfunding initiative PlusPlus together with our partners ICCO/Cordaid, Truvalu and Lendahand to enable individual investors in the Netherlands reach small and medium-sized enterprises (SMEs) in the food and agricultural sectors in Africa, Asia and Latin America. These SMEs can make a big difference for regional food security, for creating jobs in rural areas and in developing a regional market for farmers to sell their produce. 

With the launch campaign, we reached 2.3 million citizens in the Netherlands, mainly via social media and radio messages. Due to all the attention for pandemic news in the Dutch media, free publicity by third media was very limited. We tapped into existing networks of the founding partners, and started building a community from there. 

Since the launch of PlusPlus in August 2020 and during the remainder of the year, more than 300 people, including many existing Solidaridad supporters, have invested almost 200,000 euros in entrepreneurs across the world. Despite the COVID-19 insecurity, a total of 9 projects involving 6 entrepreneurs were funded.

Secondly, we worked with Achmea Foundation on extending one million euros into credit lines for Rural Service Centres (RSCs) in Ghana. These RSCs help palm oil farmers with implementing good agricultural practices and making their farms economically viable. Another 200,000 euros credit line for dairy farmers, fodder production and milk collection centres in Tanzania is intended to improve dairy supply and farmer income.

We continued collaboration with several financial institutions in Europe to help them reach more farmers and agricultural entrepreneurs, and to support climate-positive financing against terms and conditions that work locally as well as in agricultural value chains. COVID-19 led to initially slow progress in these collaborations, but we saw an increase in interest by the end of 2020.

Climate change remains a key challenge for farmers. Adapting farm systems to extreme weather events such as high temperatures, droughts and extreme rainfall is a key priority for farmers and Solidaridad’s interventions for climate-smart agriculture (CSA). CSA has benefits for farmers’ resilience and productivity, and leads to a reduction of greenhouse gas emissions. In addition, it captures carbon in living biomass such as trees and soil. In 2020 we supported the introduction of climate-smart management for about one million hectares of agricultural production. However, farmers are not compensated for their global service to mitigate emissions of greenhouse gasses. Solidaridad is aiming to change that and reward farmers financially for their efforts to limit global warming. European financial institutions can play a decisive role in creating effective carbon markets to support farmers that practice CSA. 

In 2020 we created a holistic and scientifically robust climate change measurement framework that will enable us to trace farmers’ progress in climate change adaptation and mitigation. Based on this we co-developed a digital platform – FarmImpact – that makes use of this measurement framework and connects farmer households to international carbon market initiatives. In 2021, we expect to see the first financial rewards for farmers using these tools.

Our flagship climate programme, the National Initiatives for Sustainable and Climate Smart Oil Palm Smallholders, which is implemented in Ghana, Nigeria, Indonesia and Malaysia, started in 2020 in all 4 countries. It aims to achieve an oil palm sector which is enabled and committed to adopting CSA and reducing deforestation and forest degradation in oil palm dominated landscapes.

Building upon our track record and recent climate innovations, we will scale success stories. For this purpose, we have invested into a dedicated team to mobilize new and additional climate finance, targeting European and global climate finance donors.

Organization & governance

Covid-19 provided an incentive to accelerate the development of a Work From Home Policy, including financial and ICT support to enable staff to continue working from home and protect their health. Throughout the year we have emphasized continued connectivity among staff and made sure that everyone has stayed tuned with organizational developments. Alleviating stress of staff caused by the pandemic was another focal point. 

Despite Covid-19 and the challenges that working from home can bring, the sickness rate of 4.4 percent was only just over the four percent figure set as the maximum. The attrition rate was relatively high at 16.3 percent (compared to the maximum set at 14 percent). Although challenging, recruitment and on-boarding of new staff members have continued in 2020. The organization has grown from 49.5 to 56.4 full time equivalents. 

In 2020 we have reviewed our integrity framework and made some improvements based on lessons learnt, especially in responding to a breach and how to conduct an investigation. We have gained better understanding of what steps need to be taken and what kind of research is appropriate in conducting an investigation. You can find the latest versions of the Code of Conduct and the Whistleblower Procedure here. Next to the regional internal and external reporting channels already in place, an external party has been contracted that will provide a global online independent platform for reporting any kind of misconduct related to Solidaridad. One complaint in 2019 was managed well with thorough investigation by an external party and clear communication with key stakeholders in 2020. In 2020 no new reports about inappropriate behavior or breaches of integrity were reported. In 2021 capacity will be strengthened with the appointment of a Global Integrity Coordinator and an Integrity Advisor will be assigned to a multi party alliance. We have started with organizing a Solidaridad Network community of Integrity Advisors contributing to the effectiveness of the Solidaridad integrity framework fostering a positive workplace culture, one where there is open communication, good decision making and a strong moral compass guiding decisions and actions.

Solidaridad Europe compensates for the greenhouse gas emissions caused by the energy use in its offices as well as travel through the cooperation with BanCO2, a Colombian initiative that rewards coffee farmers for environmental services, such as reducing emissions of greenhouse gases and planting trees.

Finance

A number of big donor contracts came to an end in 2020, and new contracts were signed. These multi-annual contracts are the financial backbone for Solidaridad Network. 

In 2020 the income and expenditures of Solidaridad in Europe (the Netherlands and Germany) were in line with the planned budgets. While Covid-19 has delayed some of the programmes and the related expenditures, the total expenditures on structural aid were higher than expected. Meanwhile, the costs for communication and income generation were lower. Solidaridad Netherlands has sold its shares in AgroFair BV, a tropical fruit company producing and importing fairtrade organic fruit that has been established by Solidaridad in 1996. We sold our shares to the fruit producers themselves. We also sold our shares in STIP BV, a Seafood Trade Intelligence Portal set up by Solidaridad to increase the transparency in the global aquaculture supply chains. Together with Lendahand and 2 other organisations we invested in PlusPlus (AgriCrowd BV). 

The total actual income of Solidaridad in Europe in 2020 was 34,479,121 euros. The expenditures amounted to 35,261,810 euros. The interest and income generated from investments were positive at 841,229 euros. This has resulted in a final surplus of 58,540 euros in 2020. 

Solidaridad has designated a continuity reserve. Guidelines by the Dutch Association of Fundraising Organizations (Goede Doelen Nederland) require a reserve which is between 1.0 and 1.5 times the annual costs of maintaining the operational structure. The continuity reserve on 31 December 2020 was 6,810,053 euros, which is 1.3 times the annual costs of maintaining the operational structure. 

The costs of income generation in 2020 were 735,859 euros, which is 2.1 percent of the total income of 34,479,121 euros. 

Of the total expenditures of 35,261,810 euros 95.7 percent was spent on structural aid, 2.1 percent on income generation, 1.7 percent on communication and information and 0.6 percent on management and administration. 

The full annual accounts have been drawn up in accordance with the Guideline for Fundraising Institutions (Richtlijn Fondsenwervende instellingen: RJ 650), which is part of the accounting standards produced by the Dutch Accounting Standards Board (Raad voor de Jaarverslaggeving).