Land and Crops

• Adsorption of pesticides remaining in the soil; Prevents nutrient loss from fertilizerImprovement of acidic, alkaline and toxic soils
• Increase the content of organic matter in the soil by 10-20% after 2 years of use.
• Increase the water retention capacity of the soil by 20-30%.
• Providing easy-to-digest nutrients and creating an environment for beneficial microorganisms to grow, worms to thrive, transferring “plant food” from indigestible to digestible, indirectly making crops more resistant, retaining water better, increasing crop yield

Environment

• Adsorption and sequestration capture about 500 tons of carbon per year in soil
• Adding biochar at the rate of 2-60% will reduce CH4 emissions by up to 91.2% compared to not adding biochar to the soil.
• Treating 725,000 tons of orange peels, grapefruit peels and low-quality fruits per year
• To treat 676,000 tons of orange peels and grapefruit peels discharged from industrial production each year

Local Residents

• Creating jobs for farmers

Social Welfare

• Contribute to the United Nations Sustainable Development Goal 12: sustainable production and consumption

A.3.4. ESG PRACTICES

1. Environment
Reducing greenhouse gas emissions:

• Creating a waste-free economic cycle, the project aims to reduce emissions by 10,000 tons of CO2 by 2028.
• Improving soil quality
• Optimize the shipping process by partnering with local suppliers => reduce carbon emissions.
• Using green technology from prestigious units: Hanoi University of Industry, Institute of Agriculture and Environment

Recycling Waste Rate:

• Target to treat 1000 – 1500 tons of orange peels, grapefruit and discarded fruits per year
• ZestAroma plans to increase the recycling rate to 2000 tons/year by 2025.

Pollution Reduction:

• Reduce the amount of chemical fertilizers used in the test fields by 30%, equivalent to about 15 tons of fertilizer/ha/year.
• Reduce the amount of irrigation water by 50% thanks to the moisture retention capacity of biochar, estimated to save 500m3 of water/ha/crop.
• Reduce harmful emissions from straw burning by 80%, estimated to reduce CO2 by 10 tons/ha/crop.
• Comply with regulations on natural environment conservation according to government regulations.

2. Society
Community:

• Cooperate with 1 cooperative, 2 enterprises in the production of agricultural goods to supply raw materials and train farmers on sustainable production
• Creating 20 new jobs at ZestAroma’s production facilities.
• Organize ESG seminars for hundreds of farmers in project areas in 2024.
• Guidance on planting rice and other crops to reduce emissions for growing areas

Creating livelihoods for farmers:

• ZestAroma strives to create livelihoods for farmers in 2 ways:
  • First, we purchase 500 tons of orange peels, grapefruit and 200 tons of straw from farmers every year at a price 20% higher than the market price. It is estimated that the increase in income for farmers is about 100 million VND/year.
  • Second, we hire farmers as part-time workers, prioritizing manual labor over machinery whenever possible

Creating additional sources of income for factories:

• Cooperating with 2 orange and grapefruit processing factories to purchase waste peels, helping them reduce waste treatment costs and increase income by about 50 million VND/year.

3. Governance

• Clearly assign tasks from departments to members.
• Moral issues are always put first
• Cooperate with stakeholders: Hanoi University of Industry, Institute of Agricultural Environment, Duc Hau – Luu Quang Clean Agriculture Cooperative and agricultural enterprises
• From Round 3 of the SBC2024, we have built an effective risk management system to minimize possible risks.

B: Social impact acceleration

B1: Mechanisms to accelerate impacts

After a period of trial distribution of biochar and pectin products, the product has received very positive feedback. With such results, Zestaroma believes that it can completely serve the needs of improving the soil and increasing the growth of trees by the combination of 2 biochar products and microbial fertilizers. For biochar and Zestaroma microbial fertilizer, we cooperate with businesses and the Institute of Environment and Agriculture to bring products to be distributed to:

* Local communities in agricultural production areas:
The ZestAroma project will focus on rice-growing areas in the Mekong Delta and orange-growing areas in the Northern mountains.
Local communities will directly benefit from reducing environmental pollution caused by agricultural waste, creating jobs at manufacturing facilities and raising awareness of environmental protection.

* The community cares about the environment and sustainable development:
ZestAroma will collaborate with NGOs, community groups and individuals with environmental concerns to communicate about the project and product, creating a spread and support from the community.
Combining promotion and propaganda to seminars on Green Economy Application, ESG Practices in Enterprises and Key Localities on Agriculture in the first 2 years.
After that, the goal is to supply biochar and microbial fertilizers to the domestic market of Vietnam and a part for export to neighboring Southeast Asian countries.
Regarding pectin products, Zestaroma has been accepted for trial distribution by 3 companies in the first 2 years. After that, we aim to distribute offline directly to food production businesses with the goal of becoming a reputable distributor of cheap pectin in Vietnam.

After 2 years of coordinated processing and testing, Zestaroma plans to open its own production factory. To expand the scale, Zestaroma is looking for investors in Vietnam to strengthen production and sales activities as well as need a companion so that the project can be put into practice and go further. Participating in the SBC contest is also one of the ways for us to reach out to investors.

B2: Financial stability and profitability

• Zestaroma’s revenue follows the roadmap starting from 2024 starting with 270,000 USD with Pectin production output: 2,700kg; Biochar: 350,000kg; Microbial fertilizer: 450,000kg. The selling price of biochar and fertilizer products is reasonable and quite cheap compared to the current market, in the first 2 years only ranging from 0.3 USD/kg.
• Pectin products in the trial distribution phase earn 50% of the profit before signing a long-term distribution cooperation partner, corresponding to a selling price of 19.5 USD/kg (because it has not been officially distributed, the selling price is much cheaper than pectin in the market), Zestaroma estimates sales to reach 640,000 USD until 2028. Financial risk occurs if the profit from the trial distribution of pectin in the first 2 years is not enough to compensate for the cost of producing them, which can be called a payback, then the project will not be able to afford to continue production, at this time Zestaroma will negotiate with the business about a higher price because the quality and productivity of pectin supply are always guaranteed.
• In the future, Zestaroma’s business model focuses mainly on the following activities:

1. Revenue from the sale of pectin, biochar, compressed coal pellets.
2. Consulting and training services on sustainable agricultural production.
3. Carbon credits (when the carbon market in Vietnam comes into operation). The carbon credit market is an extremely potential market in the future, Zestaroma intends to aim for the domestic carbon credit market (Reduce greenhouse gas emissions, create carbon credits for sale.)

B3: Team and leadership

B.3.1. ZESTAROMA – YOUTH, ENTHUSIASM, SUCCESS

• ZestAroma is not only a project, but also a place where young hearts converge, sharing a burning passion for sustainable agriculture. We are a dynamic team that is eager to learn and constantly improving:
  • Le Thi Phuong – Responsible for experiencing all project activities, market analysis, production management, logistics and supply chain management 
  • Hoang Hieu Ngan & Nguyen Duong Thuy Linh – Long-term and short-term financial planning, cash flow and working capital management, financial performance evaluation, cost control and risk management.
  • Dinh Phuong Binh & Nguyen Dong Hung – Research and develop products, create new value and improve product performance and processes to solve social problems.
  • Nguyen Khanh Linh & Le Thi Thu Trang – Develop and implement marketing strategies, manage brands and build brand awareness, measure the effectiveness of marketing campaigns
  • Nguyen Huong Giang & Dao Nhu Ngoc – Building relationships with customers, planning and implementing customer care programs, proposing product improvements
• Under the dedicated guidance of experienced coaches, we have overcome many challenges and achieved encouraging initial successes.
• When the time is 2 a.m., 3 a.m. and 4 a.m. … Until noon the next day, we was still tireless
• All for one goal: DO YOUR BEST & BE THE BEST YOU CAN
• From the first days, ZestAroma has proven its capabilities by successfully completing the Social Innovation, Business Model Innovation, and Social Business Execution modules. Currently, we are putting all our efforts into conquering the Social Business Acceleration module, with the determination to bring the project closer to the community and the market

B.3.2. THE PROJECT’S EXPERT TEAM

With the criterion of serving the community, creating great impacts towards sustainable production and consumption and at the same time incubating entrepreneurial spirits, the project is led by like-minded and experienced coaches:

• Assoc. Prof. Dr. Mai Van Trinh – Director of the Institute of Agricultural Environment
• Hanoi University of Industry, represented by:
  • Dr. Do Thi Ngoc Lan: Lecturer in Banking and Finance, Faculty of Business Management
  • Dr. Nguyen Minh Viet: Lecturer at the Faculty of Chemical Technology
  • Dr. Nguyen Do Quang Duy: Lecturer at the Faculty of Chemical Technology

• Dr. Luong Huu Thanh: Doctor of Biotechnology, Dean of the Faculty of Environmental Biology – Institute of Agricultural Environment.

B.3.3. EMPOWERING WITH NEW HUMAN RESOURCES 

After the Social Business Execution round, ZestAroma welcomed 6 new members, bringing a fresh breeze and new energy to the project. With expertise in business and technology from Vietnam’s leading prestigious universities, they will be important factors to help ZestAroma grow even stronger.

B.3.4. THE HUMAN RESOURCE STRATEGY

• Periodic and in-depth competency assessment: We not only rely on the evaluation of the team leader but also combine peer evaluation, self-assessment and even evaluation from customers to have the most multi-dimensional and objective view of each individual’s competence.
• Detailed job description: Each position has a clear job description, helping members understand their responsibilities and goals, thereby working more effectively.
• Personal development plan: We encourage each member to develop a personal development plan, identify strengths and areas for improvement, thereby constantly learning and developing themselves.

B4: Partnership and Collaborations

Zestaroma cooperates with

• The Institute of Agriculture and Environment
• An Hung Agricultural and Trading Technical Services Co., Ltd.
• Mercy Vietnam Co., Ltd.: Supplying raw materials for the project
• Blue Sea Technology Development Co., Ltd.
• Minh Duc Food Trading & Manufacturing Co., Ltd.: Testing and distributing pectin

In this way, we save on storage, transportation and gathering costs. As a result, Zestaroma reduces investment costs, saves raw material costs and takes full advantage of the diverse cooperation between the project and partners. B4. Cooperation and Coordination: A solid network of partners, together creating success. ZestAroma is committed to building long-term, mutually beneficial cooperative relationships with partners. We are always ready to listen, share and support each other to grow together and achieve new successes.

C. ESG reporting

C1. Measurement and reporting

1. Governance:

• Transparency in the production process and supply chain.
• Collaborate with stakeholders to ensure sustainable development.

2. Environment:
Input Materials: Completely from natural biomass including orange peel, grapefruit and rice straw

• Reduce greenhouse gas emissions: Estimated to reduce 10,000 tons of CO2 by 2028.
• Recycling waste rate: 1000 – 1500 tons of orange peels, grapefruit and oranges, discarded grapefruit + Tens of thousands of tons of straw and rice per year
• Reduce the amount of chemical fertilizers used in the test fields by 30%, equivalent to about 15 tons of fertilizer/ha/year.
• Reduce the amount of irrigation water by 50% thanks to the moisture retention capacity of biochar, estimated to save 500m3 of water/ha/crop.
• Reduce harmful emissions from straw burning by 80%, estimated to reduce CO2 by 10 tons/ha/crop.

3. Social:

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• Cooperate with 3 agricultural cooperatives to provide raw materials and train farmers on sustainable production.
• Community: Zestaroma implements ESG promotion and propaganda activities to the community, Zestaroma links with the local network of cooperatives in orange and grapefruit growing areas, establishes marketing and promotion fairs there, does propaganda about the circular economy and gradually becomes more known on media platforms, and thereby improving the value of Vietnamese agricultural products in the face of the challenge of “getting the season but losing the price” and receiving high support from farmers.
• Members of the project have participated in contests on ESG awareness propaganda to businesses and people, thereby promoting the project and increasing community connection with businesses. ZestAroma creates jobs for farmers, reduces environmental pollution, improves soil quality and reduces greenhouse gas emissions, contributing to sustainable development goals.

=> ZestAroma’s ESG report clearly demonstrates the project’s commitment to sustainable development in all three aspects: environmental, social and governance. ZestAroma has great potential to grow and succeed in the market thanks to its innovative solutions, advanced technology, and positive impact on society and the environment. The project can take advantage of the growth of the biofertilizer and biochar market to scale up and create sustainable value. We are not only aiming for business goals, but also putting social responsibility and environmental protection first. ZestAroma believes that, with continuous efforts and the companionship of the community, we can create a green and prosperous future for Vietnamese agriculture together.

C2: Compliance with ESG standards and frameworks

Zestaroma has used the toolkit: MANUAL OF TOOLS TO ASSESS THE LEVEL OF SUSTAINABLE BUSINESS PRACTICES OF ENTERPRISES ACCORDING TO THE ENVIRONMENTAL-SOCIAL-GOVERNANCE (ESG) FRAMEWORK (within the framework of the implementation of the Prime Minister’s Decision No. 167/QD-TTg approving the Program to support private sector enterprises for sustainable business in the period of 2022-2025) to measure the level of business sustainable business. Pioneering ESG Practices: ZestAroma Towards a Green Future
Not just words, but actions

ZestAroma doesn’t just create green products, we also create a sustainable business model that puts social and environmental responsibility at the center.

D. Learning curve

In 2023, the project with the initial idea is: Extracting essential oils and organic charcoal tablets from orange and grapefruit peels (separating essential oils from orange and grapefruit peels, the resulting peel residue is compressed to create smokeless organic compressed charcoal).

The year 2023, marking a turning point in thinking, ZestAroma has the opportunity to continue to develop, bring projects to participate and win third prize at the “Students with ESG initiatives” competition in 2023 organized by Hanoi University of Industry. At this competition, we had the opportunity to learn and become more aware of ESG, and at the same time receive fair comments from experts. ZestAroma itself has learned and understood the importance of ESG. The importance of ESG for the sustainable development of businesses. Green transformation is a vital condition that forces businesses to make efforts to implement. Sustainable development is not just a choice, it is a prerequisite for whether a business can survive long-term in the market in the future.

This idea has reached the Top 2 nationwide in the 6th “Students and students with startup ideas” competition in early 2024

To have more in-depth research on agricultural products, products and sustainable businesses, we have put the project into scientific research, which fortunately achieved the first prize in scientific research with the topic “Research on factors affecting supply chain management of agricultural product processing enterprises in the Red River Delta” in 2024 organized by Hanoi University of Industry.

Not only that, we are always looking for opportunities for projects, by exposing and conveying a strong message about social creation through competitions such as “Green solutions towards a circular economy, sustainable development” organized by the Ministry of Natural Resources and Environment.

Participate in Eduzone and IBS programs, change perceptions about social impact business, continuously update and innovate thinking about creating value for the environment and society.

Recently, cooperated and exchanged knowledge with Associate Professor. Doctor. Mai Van Trinh – Director of the Institute of Agricultural Environment – leading expert in the field of biochar. Thanks to the advice and enthusiastic support of Associate Professor Dr. Mai Van Trinh and Dr Luong Huu Thanh, ZestAroma will focus on researching and developing biochar products by combining orange peel, grapefruit and rice straw using incinerator technology. Innovation produces finished products in just half an hour at a low price.

However, during the process of researching and receiving feedback, we realized that the current market for orange and grapefruit essential oils is saturated. and it will be difficult to operate the model. To adapt to market changes and still ensure sustainability, ZestAroma has constantly innovated. We have successfully researched and developed Pectin products from orange and grapefruit peels.

This new product and technology promises to overcome the limitations of biochar using only orange and grapefruit peels and rice straw using kiln technology, helping the soil become healthy, rich in nutrients, and increase crop productivity. With a new research orientation, ZestAroma is committed to providing effective, environmentally friendly biochar products and contributing to improving the quality of Vietnamese agricultural products.