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Social, societal and environmental responsibility
5.3 Funds sponsored by Danone
DANONE
REGISTRATION DOCUMENT 2015
202
Danone's Contributions
Under the terms of the resolution approved by the April 23, 2009
Shareholders' Meeting, Danone made a free and irrevocable capital
endowment of €100 million into the fund in 2009 and then made
additional annual contributions: €1.4 million for each of the 2009
and 2010 fiscal years and €0.9 million for fiscal year 2011.
Management of the fund's administrative,
accounting, financial and legal activities
The fund has no employees and the management of the fund's ac-
tivities (administrative, accounting, financial and legal) is handled
by dedicated Danone employees in accordance with the terms of
a services agreement between Danone and the fund. The salaries
and travel expenses of these employees, which in 2015 totaled
€1.8 million, are fully rebilled by Danone to the fund. This rebilling
is done in accordance with a rebilling procedure implemented by
the fund after all supporting documents have been submitted by
Danone to the fund.
Projects supported by the fund
Since its creation, the fund's board of directors has approved 63
projects (excluding feasibility studies), including seven new proj-
ects in 2015; in addition, eight extensions of existing projects were
approved in 2015.
The fund's board of directors decided to terminate two projects
(one in 2011 and the other in 2013) as a result of their non-viability.
Of the 61 projects in the portfolio, 11 projects have been removed
from the fund's scope since its creation, particularly at the end of
the initial phase of financing by the fund.
Consequently, 50 projects remained active as of December 31, 2015.
These projects are selected in accordance with the fund Governance
Charter and after a review on the basis of the following five criteria:
•
economic viability of the activity funded;
•
creation of social value;
•
possibility of developing or replicating the initiative;
•
innovative character;
•
differentiation opportunities.
The projects are initiated by Danone subsidiaries around the world,
both in developed and emerging countries.
Of the 50 active projects, 11 were located in Western Europe, 11 in
America, 11 in Central and Eastern Europe, eight in Asia and nine
in Africa and the Middle East.
Projects supported by the fund are implemented primarily through
non-profit organizations selected by the fund (associations, inter-
national organizations, etc.) and are subject to contracts between
the fund and the selected partner, which define detailed rules for
their implementation (description, timetable, subsidy payment
schedule, partner's responsibility, performance indicators, project
governance, etc.). Moreover, since 2013, some projects have been
carried out directly by the fund.
Since its creation the fund has supported initiatives that fall into
five main categories:
•
supplies: supporting the dairy and fruit industries in the regions
where Danone operates by developing small producers in par-
ticular (reinforcement or acquisition of new skills, technical
solutions, access to credit, etc.) (25 projects originally in the
portfolio representing €27 million committed by the fund as of
December 31, 2015);
•
micro-distribution: integrating socially disadvantaged individuals
by creating new distribution channels for consumer products
and/or local products with high nutritional value (nine projects
originally in the portfolio representing €9 million committed by
the fund as of December 31, 2015 for these projects);
•
recycling: collecting PET by helping to organize the work of
communities of rag pickers and by improving their quality of life
and that of their families (five projects originally in the portfolio
representing €7million committed by the fund as of December 31,
2015);
•
services to individuals: in connection with nutrition, develop
the professional skills of those providing personal services
(15 projects originally in the portfolio representing €9 million
committed by the fund as of December 31, 2015);
•
local development: contribute to social development in the areas
surrounding Danone's plants through local economic initiatives
(seven projects originally in the portfolio representing €6 million
committed by the fund as of December 31, 2015).
These projects are also subject to audits, impact studies and
monitoring by a coordination team (these overheads costs totaled
€2 million in 2015).
As of December 31, 2015, the total amount committed by the fund to
projects implemented by non-profit organizations (corresponding
to the amounts actually paid by the fund to partners as well as the
amounts that the fund has agreed to pay under contracts entered
into with partners) and to public-interest initiatives carried out
directly by the fund, audits, impact studies and monitoring by a
coordination team was €69 million.
Livelihoods Fund
Creation
The Livelihoods Fund is an investment fund dedicated to ecosystem
and carbon assets restoration and created at Danone's initiative.
It is a Luxembourg-registered mutual fund (société d'investisse-
ment à capital variable – specialized investment fund) created on
December 15, 2011.
The Livelihoods Fund seeks to invest in three types of projects that
fulfill both environmental and social criteria in Africa, Asia and Latin
America: (i) the restoration and preservation of natural ecosystems,
(ii) agroforestry and soil restoration through sustainable agricultural
practices, and (iii) access to rural energy to reduce deforestation.
The Livelihoods Fund also seeks to have a significant impact on
local communities (food safety, development of new revenue, etc.)
and on the environment.
The initial term of the fund is 24 years, the life span of a project
being around 20 years.
The creation of the Livelihoods Fund is in line with Danone's goal
of reducing its carbon and environmental footprint through the de-
velopment of offset actions that enable carbon credits to be earned
through projects with a high environmental and social impact.