cheni farm sustainability report 2019

CHENI FARM

SUSTAINABILITY

REPORT 2019

Investing in a

Better Future

OVERVIEW Agriculture in Kenya Kenya is a regional leader in the export of agricultural products. Horticulture, the intensive cultivation of vegetables, fruits and flowers for sale, is currently one of the country’s top foreign exchange earners. In 2018, horticulture earnings stood at a record high of Sh101.5 billion (USD 1 Billion), contributing 1.5% percent of the country’s GDP. The subsector is estimated to have employed more than two million people, 70% of those working in rural Kenya.

About Sustainable Agriculture Sustainable agriculture is defined as the production of food, fibre, or other plant or animal products using farming techniques that protect the environment, public health, human communities, and animal welfare. This form of agriculture enables us to produce without compromising future generations' ability to do the same. Sustainable agriculture addresses many environmental and social concerns and offers innovative and economically viable opportunities for farm owners and workers.

This sustainability report covers period 1st January 2019 to 31st December 2019. It has been prepared in accordance with the Global Reporting Initiative (GRI) Standards: Core Option.

Sustainability Challenges Growth in international trade is governed by various standards, including food safety and agricultural health standards, environmental sustainability standards as well as complementary labour laws requiring strict adherence to occupational health and safety requirements. Lack of knowledge on the various standards is a severe limitation to smallholder farmers that will continue affecting their overall productivity as well as denying them access to a consistent large market for their produce.

Opportunity in Sustainable Agriculture To support and regulate growth in the agricultural sector, new agricultural health, safety, environmental and quality management standards are continuously being developed and applied to address hazards in the sector. These are influenced by the emerging tendency to package together safety, quality, environmental and social sustainability standards and will ensure sustainability of agricultural production systems implemented.

Cheni Farm Cheni Farm is located off the Nairobi-Nanyuki highway, 5km past Chaka Town (and 10km from Naromoru Town). The farm is privately owned and constitutes of a horticultural farm specialising in the growing of outdoor and greenhouse herbs for the export market. Our farm provides a practical and holistic approach to implementation of safety, quality, environmental and social standards required for compliance with international standards and regulations for food safety and agricultural production in the export market. We have developed a demonstration farm and training centre to support farmer education on best agricultural practices to help smallholder farmers grow and harvest crops more efficiently while complying with the required international standards. Sustainable agricultural practices have a knock on effect of increasing yield and revenue while simultaneously improving the quality of products provided to consumers.

STATEMENT FROM C.E.O.

At the core of Cheni Farm Limited’s principles and values is the belief that business should contribute to the sustainability of the environment, our communities, and our economies. We aim to create a competitive advantage by addressing economic, environmental and social sustainability issues. We have embarked on this journey by purposefully taking steps to ensure our actions give everyone the opportunity to thrive and succeed, along with our business. We know that health and safety is a fundamental standard in our business and we address this issue with due consideration to the health and safety of our workers, consumers, community and environment.

Our goal is to ensure that our product quality and farming practices are leading the way in

sustainability, even beyond our industry.

Our strategy includes measures to guarantee product quality for consumer safety. We also aim to

create a safe working environment for our workers that includes continual training in

occupational health and safety practices as well as provision of the necessary equipment for safe

work. We also work to minimise negative environmental impact and contribute to positive

environmental impact.

We aim to incorporate smallholder out-grower farmers into our business model by ensuring that

our farm is a benchmark for sustainable farming practices in the industry. This work is positioning

Cheni Farm Limited to be a champion for sustainability among our competitors and business

partners.

We will work closely with our business partners to ensure all parties comply with the legal

requirements and voluntary external initiatives with regards to sustainability.

We are holding ourselves accountable today and every day for achieving our sustainability goals

and leading the industry in innovative sustainability practices and programs.

GITHUI MUCHINA CHENI FARM LIMITED CEO

PRODUCTS & SERVICES Sustainable horticultural farming activities, specialising in production, harvesting and packaging of greenhouse and outdoor fresh herbs for export market.

HEADQUARTERS AND OPERATIONS Our headquarters and operations are located in Naromoru Town, Nyeri County, Kenya.

OWNERSHIP AND WORKERS Cheni Farm Limited is a privately owned limited company, with 2 directors and shareholders. We have 7 permanent employees and 20 casual employees. Of the 7 permanent employees, all are male. Of the 20 casual employees, 19 are female and 1 is male.

MARKETS SERVED Products are exported to United Kingdom and European Union. By Dec. 31st 2019, we had harvested and packaged approx. 15 tonnes of greenhouse and outdoor herbs.

SUPPLY CHAIN

MATERIAL TOPICS

STAKEHOLDERS

EMPLOYEES (Permanent/Casual) Suitable and safe working conditions:

o Safe working environment. o Appropriate training in line of work and in safety

aspects. o Hygiene facilities, access to clean water.

Wages and payments o Above minimum wage. o Weekly payments (for casuals) and monthly payments

(for permanent staff) with option of payment to mobile phone or bank accounts.

FARM DIRECTORS o Accountable/Documented use of financial resources. o Accountable/Documented use of physical resources. o Financial projections provided to indicate progress in

achieving targeted ROIs. o Good governance practices to ensure accountability at

all levels.

CLIENT (Product Consolidator/End Consumer/Supply Chain Entities/Consumers)

o Adherence to market regulations regarding product safety (food safety & hygiene). This is mainly with regards to chemical/fertilizer usage, pest and disease monitoring and post-harvest handling.

o Transparency in traceability issues e.g. block numbers, spray records, harvest records.

NEIGHBOURS & LOCAL COMMUNITY o Provision of information concerning farm activities,

chemicals in use and safety measures in place where required e.g. spraying in appropriate weather conditions and using net barriers to avoid drift into neighbouring farms, ploughing activities to avoid dust and noise to neighbours.

o Use of resources sustainably e.g. borehole water, soil management.

o Employment opportunities especially for youth and women. Ethnic diversity given due consideration.

SUPPLIERS o Use of locally based suppliers where possible to reduce

on transport related environmental impacts. o Use of certified/licenced suppliers of products to

ensure authenticity of products.

RELEVANT AUTHORITIES

o Adherence to crop health requirements as per KEPHIS regulations.

o Regular monitoring and control measures for pests and diseases.

o Appropriate training of staff on crop health concerns. o Payment of required fees.

o Acquisition of necessary licences (export licence) and payment of fees.

o Adherence to HCD regulations on farm standards.

o Control of air pollution from drift chemical spray and vehicle fumes.

o Control of water pollution through chemical/fertilizer leaching to groundwater and water drifting to nearby water sources.

o Controlled use of non-biodegradable packaging material within NEMA authorization limits.

o Managed use of water resources within authorised limits, both for borehole and project water.

o Rainwater harvesting and re-use where possible.

o Coordination with local authorities to manage human-wildlife conflict due to elephant invasions and control of wild hares, birds and antelopes.

o Use of equipment such as solar lighting to repel wild animals instead of wild traps and physical confrontations.

County Agricultural Department: o Contribution to county gross agricultural output.

County Health Department: o Maintenance of safe working and living

environment. o Minimising negative impacts from farm activities

e.g. through pollution, effluent discharge, pest control.

Chief’s Administration Camp: o Employment opportunities coordinated with local

administration authorities to factor in vulnerable groups and address societal concerns such as insecurity cases.

o Adherence to GGAP standards as per pre and post certification requirements.

o Commitment to traceability requirements including labelling of farm produce wit unique GGAP number.

Stakeholder Engagement

Engagement provides feedback on organization’s performance in achieving its sustainability

targets and hence influences information to be reported in sustainability report.

Through our stakeholder outreach in our materiality assessment, we identified issues to help us

to focus both our near-term and long-term sustainability goals around targets that we believe can

impact the fundamentals of our business.

SOCIAL: occupational health and safety, diversity and equal opportunity, local

communities, social compliance, customer health and safety.

ENVIRONMENTAL: energy, water, effluents and wastes, biodiversity, environmental

compliance

ECONOMIC DEVELOPMENT: economic performance, procurement practices

Identifying and Engaging with Stakeholders? We have identified external stakeholders that

cover the range of activities and issues involved in Cheni Farm Limited’s value chain. We also

recognize the knowledge and experience that our internal stakeholders bring to the discussion

and have identified a cross-section of decision-makers and action-takers within our organization

to provide input.

How and when to engage? All can be engaged directly through face to face conversations with

actual stakeholder or representatives of stakeholder institutions. Most stakeholders are engaged

minimum twice a year after a period of 6 months, except for employees and clients where the

engagement for sustainability purposes/review is once every 3 months.

SUSTAINABLE DEVELOPMENT GOALS

Wages above $1.25 daily

Worker health and safety, registration for county health services.

Employment opportunities for women

Affordable and Clean Energy

Employment Opportunities

Waste management, efficient use of natural resources.

Tree planting, Managing human wildlife conflict

SUSTAINABILITY CONTEXT AND KEY IMPACTS

ECONOMIC ENVIRONMENTAL SOCIAL Employment

creation Contribution to

agricultural national GDP.

Foreign currency income.

National revenue contribution e.g. through payments to authorities such as NEMA, WRMA, KEPHIS for licences.

Negative: Disturbance to biodiversity

e.g. cutting natural vegetation, disturbing soil structure through ploughing.

Increase in chemical pollution (air and soil).

Usage of water resources. Organic/Inorganic waste

accumulation e.g. waste plant material or waste packaging material.

Positive: Use of integrated pest

management techniques. Tree planting. Waste management e.g.

reuse of organic waste. Reduced chemical input and

use of biological farm inputs.

Rainwater harvesting. Use of methods such as

controlled bush clearing and proper land management techniques.

Employment opportunities: workers (permanent/casual), suppliers

Consumer health: Ensuring safe farm produce for consumption by end user.

Workers’ health and safety: Ensuring health and safety of workers by providing a safe working environment.

Training & Education: For workers, out-growers.

Strategy, Risks and Opportunities

Cheni Farm Limited sustainability strategy aims to ensure responsible consumption of resources

while protecting the environment and promoting welfare of our workers, with the goal of

ensuring quality farm produce for the end consumer. We work in collaboration with our

stakeholders to promote our products and sustainability approach.

We have three strategic priorities to ensure we succeed:

• Ensuring quality produce for end consumer

• Creating suitable working conditions for our farm workers

• Responsible consumption and management of environmental resources.

Risks

Risk-based approach is used for monitoring and reviewing of sustainability risks as per the ISO

14001:2015, ISO 9001:2015 and ISO 45001:2018 frameworks and guidelines. Key physical and

transition sustainability risks are presented below.

Physical risks

Cheni Farm Limited carries out farming activities which include ploughing, bed preparation,

planting activities, use of chemicals/fertilizers, packaging and waste disposal. Our activities pose

environmental risks due to issues such as:

Clearing of natural vegetation

Disturbance of soil structure

Leaching of chemicals/fertilizers

Over-consumption of water resource

Production of bio-degradable and non-biodegradable waste.

Measures to mitigate environmental impact include:

Environmental Impact Assessment studies for production site.

Tree planting activities

Minimal use of inorganic chemicals/fertilizers

Monitoring of water consumption and soil moisture levels

Composting of bio-degradable waste and re-use as organic manure.

The working environment also presents various potential occupational health and safety risks to

the farm workers. This include exposure to spray chemicals and extreme weather conditions. Our

mitigation strategies include:

Health and safety training for workers including spray technique.

Spraying during favourable weather conditions.

Provision of rest breaks during unfavourable weather conditions such as extreme heat or

cold.

Provision of Personal Protective Equipment.

Maintenance of food quality presents potential health risk to the end consumer if guidelines are

not adhered to. This includes:

Use of chemicals/fertilizers within recommended guidelines.

Adhering to hygiene standards during the farming cycle.

Correct post-harvest handling of farm produce.

Transition risks

Climate change is an identified strategic risk with significant implications for our market and

supply chain. Rising mean temperatures, changes in precipitation patterns and extreme weather

require adaptation to climate change.

Irregular weather patterns result in early or delayed seasonal market (e.g. a delayed winter in the

EU), which can result in under-production or over-production of farm produce. Fauna migration is

also resulting in pest infestation challenges.

Solving this challenge requires knowledge and collaboration and holistic solutions. Difficult

market and soil conditions can deprive farmers of returns on their investments in fertilizer and

impact their profitability.

Opportunities

Our farm allows us to present a demonstration of a workable sustainable farming model. On a

larger scale, this will aim contribute to solving sustainability challenges by offering a model to

other farms. In addition, we will offer thought leadership to agricultural stakeholders on our

practical experiences in management of sustainability issues.

Our staff have carried out in-house training that includes ISO management systems and GHG

Corporate Standard Reporting. We can develop strategies for measuring and calculation of

carbon footprints, do life cycle assessments and work with external stakeholders to incorporate

these strategies at smallholder farmer level.

INDICATOR AND INDICATOR DESCRIPTION LOCATION GENERAL STANDARD DISCLOSURES ORGANIZATIONAL PROFILE 102-1 Name of the organization General Standard Disclosures 102-2 Activities, brands, products and services General Standard Disclosures 102-3 Location of Headquarters General Standard Disclosures 102-4 Location of Operations General Standard Disclosures 102-5 Ownership and legal form General Standard Disclosures 102-6 Markets served General Standard Disclosures 102-7 Scale of the organization General Standard Disclosures 102-8 Information on employees and other workers General Standard Disclosures 102-9 Supply Chain General Standard Disclosures 102-10 Significant changes to the organization and its

supply chain General Standard Disclosures

102-11 Precautionary Principle or approach General Standard Disclosures 102-12 External Initiatives General Standard Disclosures 102-13 Membership of associations General Standard Disclosures STRATEGY 102-14 Statement from senior decision-maker Sustainability Report 2019 p.5 102-15 Key impacts, risks and opportunities Sustainability Report 2019 p.12 ETHICS AND INTEGRITY 102-16 Values, principles, standards, and norms of

behaviour Sustainability Report 2019 p.5

GOVERNANCE 102-18 Governance Structure Sustainability Report 2019 p.3 STAKEHOLDER ENGAGEMENT 102-40 List of stakeholder groups Sustainability Report 2019 p.7 102-41 Collective bargaining agreements Sustainability Report 2019 p.7 102-42 Identifying and selecting stakeholders Sustainability Report 2019 p.7 102-43 Approach to stakeholder engagement Sustainability Report 2019 p.7 102-44 Key topics and concerns raised Sustainability Report 2019 p.7 REPORTING PRACTICE 102-45 Entities included in the consolidated financial

statements General Standard Disclosures

102-46 Defining report content and topic boundaries General Standard Disclosures 102-47 List of material topics General Standard Disclosures 102-48 Restatements of information General Standard Disclosures 102-49 Changes in reporting General Standard Disclosures 102-50 Reporting period General Standard Disclosures 102-51 Date of most recent report General Standard Disclosures 102-52 Reporting cycle General Standard Disclosures 102-53 Contact point for questions regarding the report General Standard Disclosures 102-54 Claims of reporting in accordance with the GRI

standards General Standard Disclosures

102-55 GRI content index Sustainability Report 2019 p.15 102-56 External assurance General Standard Disclosures

Economic Performance: SDG 1 103-1 Explanation of the material

topic and its boundary Economic Management Approach

103-2 The management approach and its components

Economic Management Approach

103-3 Evaluation of the management approach


201-1 Direct economic value generated and distributed

Comprehensive GRI Data, p.2

201-2 Financial implications and other risks and opportunities due to climate change


201-3 Defined benefit plan obligations and other retirement plans


201-4 Financial assistance received from government


Procurement Practices 103-1 Explanation of the material

topic and its boundary Economic Management Approach





204-1 Procurement practices Comprehensive GRI Data, p.3

Materials: SDG 12

103-1 Explanation of the material topic and its boundary

Environmental Management Approach





301-1 Materials used by weight and volume


301-2 Recycled input materials used Comprehensive GRI Data, p.4 301-3 Reclaimed products and their

packaging materials Comprehensive GRI Data, p.4

Energy: SDG 7 103-1 Explanation of the material

topic and its boundary Environmental Management Approach





302-1 Energy consumption within the organization


302-2 Energy consumption outside of the organization


302-3 Energy intensity Comprehensive GRI Data, p.5 302-4 Reduction of energy

consumption Comprehensive GRI Data, p.5

302-5 Reductions in energy requirements of products and services


Water: SDG 12 103-1 Explanation of the material






303-1 Interactions with water as a shared resource


303-2 Management of water discharge-related impacts


303-3 Water withdrawal Comprehensive GRI Data, p.6 303-4 Water discharge Comprehensive GRI Data, p.6 303-5 Water consumption Comprehensive GRI Data, p.6

Biodiversity: SDG 15 103-1 Explanation of the material






304-1 Operational sites owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas


304-2 Significant impacts of activities, products, and services on biodiversity


304-3 Habitats protected or restored


304-4 IUCN Red List species and national conservation list species with habitats in areas affected by operations


Effluents and Waste: SDG 12 103-1 Explanation of the material






306-1 Water discharge by quality and destination


306-2 Waste by type and disposal method


306-3 Significant spills Comprehensive GRI Data, p.7 306-4 Transport of hazardous waste Comprehensive GRI Data, p.7 306-5 Water bodies affected by

water discharges and/or runoff


Environmental Compliance: SDGs 12 , 13, 15 103-1 Explanation of the material






307-1 Non-compliance with environmental laws and regulations


Occupational Health and Safety: SDG 3 103-1 Explanation of the material

topic and its boundary Social Management Approach


Social Management Approach



403-1 Occupational health & safety management system


403-2 Hazard identification, risk assessment, and incident investigation


403-3 Occupational health services Comprehensive GRI Data, p.8 403-4 Worker participation,

consultation, and communication on occupational health & safety


403-5 Worker training on occupational health & safety


403-6 Promotion of worker health Comprehensive GRI Data, p.8 403-7 Prevention and mitigation of

occupational health & safety impacts directly linked by business relationships


403-8 Workers covered by an occupational health & safety management system


403-9 Work-related injuries Comprehensive GRI Data, p.9 403-10 Work-related ill health Comprehensive GRI Data, p.9

Diversity and Equal Opportunity: SDG 11 103-1 Explanation of the material






405-1 Diversity of Governance Bodies and Employees.


405-2 Ration of basic salary and remuneration of women to men


Local Communities: SDG 11 103-1 Explanation of the material






413-1 Operations with local community engagement, impact assessments, and development programs


413-2 Operations with significant actual and potential negative impacts on local communities


Customer Health and Safety: SDG 3 103-1 Explanation of the material






416-1 Assessment of the health and safety impacts of product and service categories


416-2 Incidents of non-compliance concerning the health and


safety impacts of products and services

Socioeconomic Compliance: SDG 8 103-1 Explanation of the material






419-1 Non-compliance with laws and regulations in the social and economic area


cheni farm sustainability report 2019

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