SOCIAL INNOVATION
https://youtu.be/LtaeAv6OrCw?si=aMwcuFkMTi1YG9JA
A. Social business idea
A1. Social mantra one-liner
Sokfarm – organic coconut flower nectar, Empowering Livelihoods, Embracing Wellness
A2. Contributions to UN goals
Vision: Sokfarm envisions itself as a beacon of Vietnamese heritage, being the first to honor the traditional coconut flower nectar collection practices of the Khmer ethnic community. We strive to foster a happy community and elevate Vietnamese products to global recognition.
Mission: Committed to leadership in the coconut flower nectar industry, Sokfarm aims to rank among the top five global producers. Our mission revolves around a business model that not only supports the economic stability of farmers but also champions environmental protection, adapts to climate change, and improves community health through the sustainable production of organic coconut flower nectar in Tra Vinh.
Sokfarm prioritizes sustainable development in all its activities, aligning with the United Nations’ Sustainable Development Goals (SDGs).
SDG 1: No Poverty
SDG 3: Good Health and Well-being
SDG 10: Reduced Inequalities
SDG 13: Climate Action
Using coconut trees, whichare resilient to saltwater intrusion and climate change, and practicing organic farming methods, Sokfarm helps reduce the environmental impact and promotes sustainable land use.
B. ESG preparedness
B1. Target issues
| Target Social Issues | Stakeholders | Scale & Scope | |
| 1 | Saline intrusion in the Mekong Delta affects approximately 40,000 households, leading to significant agricultural disruption and an estimated annual financial loss of 70,000 billion VND due to reduced crop yields and damage to the farming infrastructure. | – Farmers: Directly impacted by reduced crop yields and income.
– Local Communities: Experience economic instability and potential displacement. – Government: Needs to implement sustainable water management and agricultural support policies. – NGOs and Environmental Groups: Advocate for sustainable solutions and support affected communities. |
– Regional impact within the Mekong Delta.
– Directly affects large-scale agricultural productivity and local economies. |
| 2 | The production and consumption of refined sugar pose significant health risks, including increased likelihood of obesity, diabetes, and heart disease. Workers in the sugar industry may also face health issues due to exposure to hazardous conditions during production processes. | – Consumers: At risk of health issues due to high consumption of refined sugar.
– Workers in the Sugar Industry: Face health risks from working conditions and potential chronic diseases from long-term exposure. – Healthcare Providers: Deal with the increased burden of treating diseases associated with high sugar consumption. – Policy Makers: Need to regulate sugar content in products and promote healthier alternatives. |
– National and global impact due to the widespread use of refined sugar in various food products.
– Involves public health campaigns, regulatory changes, and shifts in consumer behavior towards healthier dietary choices. |
| 3 | The Khmer community in Tra Vinh faces significantly higher unemployment rates, contributing to socio-economic disparities and reduced quality of life. | – Khmer Community: Directly affected by lack of employment opportunities, leading to poverty and limited access to education and healthcare.
– Local and National Government: Responsible for implementing inclusive employment policies and social welfare programs. – NGOs and Social Enterprises: Play a role in creating job opportunities and providing skills training. |
– Local impact, predominantly in the Tra Vinh area.
– Requires targeted interventions to improve job creation, education, and infrastructure to support economic development and integration of the Khmer community into broader economic activities. |
B2. Root causes
- Problem: Saline Intrusion
- Symptom: The lack of freshwater leads to the death of many plants, resulting in shriveled coconut fruits and failed yields.
- Causes:
- EL NINO Phenomenon: This climatic event leads to reduced rainfall and increased evaporation, exacerbating water scarcity.
- Geographical Location and Global Warming: The coastal and low-lying positioning of the Mekong Delta makes it vulnerable to rising sea levels, which displace freshwater resources with saltwater.
- Overexploitation of Groundwater: Intense groundwater pumping decreases aquifer levels, making it easier for seawater to infiltrate.
- Hydropower Plants Upstream: These reduce the downstream flow of freshwater, which is crucial for diluting the encroaching seawater during dry seasons.
- Problem: Harmful Effects of Refined Sugar on Health of Workers and Consumers
- Symptom: Increased consumption of refined sugar is linked to obesity, diabetes, and heart disease, while workers suffer from various health issues due to exposure to hazardous conditions.
- Causes:
- High Consumption: Refined sugar is prevalent in numerous food products, greatly exceeding recommended intake levels.
- Nutritional Impact: Refined sugars are calorie-dense but nutrient-poor, contributing to various metabolic diseases.
- Food Industry Practices: The industry’s reliance on refined sugar for enhancing product appeal encourages overconsumption.
- Lack of Awareness and Education: Insufficient information and misleading labeling prevent consumers from making informed choices.
- Chemical Exposure in Production: Workers face exposure to harmful chemicals like lime and phosphoric acid, which are used extensively in sugar refining.
- Inadequate Safety Measures: A lack of proper protective equipment and training leads to health risks for workers.
- Problem: High Unemployment Among Khmer People in Tra Vinh
- Symptom: There is a significant lack of job opportunities, particularly in the rural areas where the Khmer community is prevalent.
- Causes:
- Limited Educational Opportunities: Access to higher education is restricted for the Khmer community, limiting job prospects.
- Lack of Economic Diversity: Economic activities are concentrated in a few sectors, not enough to generate sufficient employment.
- Fragmented Land Structure: Small and divided land holdings prevent the development of large-scale agriculture or industry.
- Inefficient Agricultural Practices: Outdated farming techniques on small plots result in low productivity and economic returns.
B3. Current solution landscape
Current solutions to address the challenges of salt intrusion in the Mekong Delta and uplift the livelihoods of local communities. Regarding the enhancement of the economic value of indigenous resources and the reduction of local poverty – Vietnipa (providing 100% natural sweetener from Nipa palm sap):
Pros:
- Empowering Locals: Creates jobs and significantly boosts income (12x) for over 40 people with 10ha of nipa palm, directly tackling poverty.
- Sustainable Practices: Strives for organic certification, promoting responsible resource management.
- Indigenous Focus: Utilizes readily available Nipa palm, fostering local economic development.
Cons:
- Scalability Limits: Specialization in brackish water hinders broader impact.
- Organic Integration Needed: Further improvement in production processes is required.
- Limited Support: Currently reaches only 10 households, restricting poverty reduction efforts.
- Slower Growth Cycle: Nipa palm’s 5-year growth might impact income generation speed for new participants (compared to some alternatives).
Concerning the promotion of sustainable agriculture and the establishment of a farmer-manufacturer-customer ecosystem – Coco-sugar (sweetener from sugar):
Pros
- Environmentally friendly: Coconut palms produce more sugar per acre while using fewer resources than sugarcane; (Philippine Council for Agriculture, Forestry and Natural Resources Research and Development, 2022) [1].
- Sustainable practices: Coconut trees grow in diverse ecosystems, improve soil fertility and water conservation, and can even revitalize degraded land (Philippine Council for Agriculture, Forestry and Natural Resources Research and Development, 2022) [1].
- Versatile crop: Coconut palms provide various usable products beyond sugar, including building materials, food sources, and shade for other crops (Philippine Council for Agriculture, Forestry and Natural Resources Research and Development, 2022) [1].
- Supports farmers: Coconut sugar production directly benefits farmers, potentially including small-scale or medium-sized enterprises (Sarma et al., 2022) [3].
Cons
- Limited social impact: Coconut sugar production doesn’t specifically target underprivileged communities (Philippine Council for Agriculture, Forestry and Natural Resources Research and Development, 2022) [1].
- Limited product diversification: The industry primarily focuses on sugar production, neglecting the potential for other value-added products (Philippine Council for Agriculture, Forestry and Natural Resources Research and Development, 2022) [1].
- Production challenges:
- Higher production costs compared to cane sugar (Philippine Council for Agriculture, Forestry and Natural Resources Research and Development, 2022) [1].
- Potential inconsistency in quality with increased demand (Philippine Council for Agriculture, Forestry and Natural Resources Research and Development, 2022) [1].
- Seasonal variations in sap yield from coconut trees (Sarma et al., 2022) [3].
- Scalability limitations due to the production process potentially being unsuitable for large-scale operations (Ramalakshmi & Ramesh, 2004) [2].
Overall Assessment:
Sokfarm has adeptly embraced a vision-oriented strategy to address the deficiencies in current solutions, effectively bridging the identified gaps highlighted above.
B4. Solution to implement
At Sokfarm, our commitment to the environment goes beyond traditional farming practices. By embracing organic and circular production models, we’re not only enhancing product quality but also protecting the delicate ecosystem of the Mekong Delta.
Coconut trees, known as the ‘Tree of Life,’ are exceptionally resilient to climate change. These trees help maintain groundwater levels, prevent erosion, and act as natural windbreaks, mitigating the effects of storms and reducing CO2 emissions.
In regions battered by saline intrusion, our focus on coconut nectar production offers a sustainable alternative, turning environmental challenges into opportunities for innovation.
Our products, derived from organic coconut nectar, provide a healthy, low glycemic index alternative to conventional sweeteners, benefiting not just our customers but also our workers, who are shielded from harmful chemicals.
Sokfarm is dedicated to fostering a healthy community, starting with our workforce. Seventy percent of our employees are women, and eighty percent belong to the Khmer ethnic minority
Every member of our team, from farmers to factory workers, receives comprehensive training and fair wages, promoting local employment and preventing the migration from rural areas.
We’re building a fair and respectful work environment that values the rights and contributions of every employee, especially those from vulnerable groups.
Our management systems ensure that organic farming areas are sustainable and that crop management is efficient. Our long-term procurement policies (within 5-10 years) support our farmers, enhancing their economic standing significantly (most farmers in our company escape poverty).
| Beneficiaries | Intended Impacts (Benefits for Beneficiaries) | Requirements to Execute Solutions (Activities) | Critical Risks | |
| 1 | Environment | |||
| 1.1 | Farmer, worker | Adaptation to climate change and saline intrusion | Choose coconut trees to adapt to saline intrusion. (can stand 7-10/1000 level of salty)
Implement organic farming and nectar harvesting practices. |
Potential increase in saline intrusion that could still affect coconut production despite adaptations |
| 1.2 | Farmer, worker | Minimized environmental impact via organic and circular production | Use organic fertilizer
International organic certification for the cultivation area Use surface water and reuse distilled water during production. |
Mismanagement of water resources leading to scarcity. |
| 1.3 | Farmer, worker, governance | Reduced greenhouse gas emissions | Grow mature coconut trees to absorb CO2. | Insufficient land or growth conditions to sustain large numbers of mature coconut trees. |
| 2 | Social | |||
| 2.1 | Farmer, customer | Health-protecting products | Maintain organic certification and ensure product processing avoids chemicals. | Market rejection of higher-priced organic products. |
| 2.2 | Farmer, worker, officer | Inclusion of vulnerable groups in the production chain | Provide training and career development, especially to women and ethnic minorities. | Failure to maintain inclusive practices or facing discrimination challenges. |
| 2.3 | Farmer, worker, officer | Job creation and economic stability for local communities | Train local workers and establish long-term procurement policies with farmers. | Economic fluctuations or market changes affecting the stability of job creation. |
| 3 | Governance | |||
| 3.1 | Farmer, worker, officer | Professional and balanced job environment | Develop fair employment practices and training programs. | Potential for governance failure or lack of compliance with fair practice standards. |
| 3.1 | Farmer, governance | Efficient, sustainable crop management system | Guide farmers in establishing organic farming areas. | Inefficient management practices impacting sustainability. |
B5. Solution uniqueness
| Company | Beneficiaries | Circular economy | Characteristics of coconut and scalability |
| Sokfarm | Creating livelihoods for ethnic Khmer people (30% in the province, 80% are women) | Research and implementation of biomass boilers with environmentally friendly fuels and improved waste management (utilize excess distilled water from the production process) | Manwa
Harvesting: Can be harvested year-round Growth Cycle: Relatively fast compared to Nipa palm, with a 3-year growth period Scalability:Potentially more scalable due to the year-round harvest and faster growth cycle. |
| Coco Sugar | Creating livelihoods for farmers in Banyumas (Indonesia) | No practices found yet | Tropical palms
Harvesting: Seasonal variations affect yield Growth Cycle: Can vary depending on the specific palm species Scalability: The complex harvesting process often hinders large-scale production for many tropical palms |
| Vietnipa | Creating livelihoods for farmers in Can Gio (Vietnam) | No practices found yet | Nipa
Harvesting: Seasonal variations affect yield Growth Cycle: Slow growth cycle, taking up to 5 years to mature Scalability:Limited scalability due to slow growth cycle and specific environmental requirements (brackish water). |
C. Stakeholder engagement
C1. Engagement strategy
For our key stakeholders, we have identified farmers, customers, and employees. We are committed to equipping them with the necessary resources and implementing suitable engagement strategies. This includes providing training programs, operating the Sok School, and supporting sports events – all aimed at effectively meeting the needs of these important stakeholder groups.
C2. Social support campaign performance
Our journey towards a more sustainable future is paved with the support of both financial resources and recognition of our efforts. The generous contribution of $1 million from the Triple I Impact Fund in 2024 is instrumental in our fight against climate change and fostering a comprehensive approach to sustainable agriculture in the Mekong Delta.
Beyond financial backing, we are deeply honored by the prestigious awards that acknowledge our dedication. Our innovative spirit was further recognized when the Ministry of Planning and Investment named us a Top 10 Outstanding ESG Innovation. These accolades serve as a powerful motivator, reminding us of the positive impact we are making and inspiring us to continue pushing the boundaries of what’s possible.
D. Learning curve
Social Issue Exploration:
- Severity of Saltwater Intrusion: While we knew saltwater intrusion was a problem, the extent of its devastation on coconut production (50-60% decline) and farmer income (price drop from 170,000 VND to 30,000 VND) was a harsh reality.
- The negative impact of chemical exposure on employee’s health in sugar production: Sugarcane processing involves handling a range of chemicals like lime, phosphoric acid, and formaldehyde. These pose significant health risks to farmers if not handled properly, leading to potential illnesses.
Insights from Stakeholder Interactions:
Appeal of Coconut Nectar Collection: We learned that the traditional practice of collecting coconut nectar aligns with the Khmer culture and offers a viable economic alternative for younger generations, addressing the issue of rural depopulation.
Shifting Understanding:
Initially, the focus was solely on saltwater intrusion. Through the competition, we recognized the importance of cultural preservation and how the decline of the Khmer coconut nectar tradition adds another layer of complexity to the social issues faced by the Mekong Delta.
Areas for Improvement:
Scalability: We need to explore the best ways to scale up our solution, ensuring it reaches a larger population of Khmer farmers and creates a sustainable market for coconut nectar products; while focusing on the e-commerce market and health-related projects to increase market share
Long-term Impact – developing Circular Production: Intensive research is conducted to test and implement the Circular production line, including opening a factory using Biomass boilers, environmentally friendly fuels, and improved waste management. Furthermore, Sokfarm can transform from circular production to a circular economy by closing organic waste loops, upcycling byproducts, using sustainable packaging, and promoting transparency
Farmer’s health: Sokfarm prioritizes organic methods and explores alternative sweeteners. This significantly reduces the risk of chemical exposure for farmers.
Reference:
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