In a previous Insights piece, we described recent updates to our impact measurement and management (IMM) framework. Here we illustrate some of those using the case study of Bioceres.
Bioceres Crop Solutions (“Bioceres”) develops solutions to enhance crop productivity while mitigating adverse environmental impacts of farming. Products include biological agricultural inputs such as inoculants, which use bacteria to enhance the ability of crops to absorb nitrogen and thereby require less fertiliser, and micro-beaded fertilisers, which require up to 75% smaller dosages compared to traditional fertilisers. More recently, Bioceres has also developed drought-tolerant GM soybean and wheat seeds (HB4), which have the potential to help farmers mitigate impacts of climate change.  Read more on our investment case for Bioceres in this Insight piece.
Theory of change
Five Dimensions of Impact
The next step is a detailed assessment of impact, where we analyse the company from each of the Five Dimensions of Impact (see previous Insights piece for further detail). Figure 2 provides a high-level summary of this analysis. Our impact assessment highlights that there is a critical need for sustainable agricultural solutions in Argentina and Brazil, given their global importance in food production. While the potential for positive impact is significant, the impact risks are also high (relative to our other holdings), which has led us to engage with the company and third-party experts on how best to mitigate these.
Translation into impact scoring
As explained in our previous Insights piece, our updated scorecard considers six categories of impact: Reach, Criticality, Effectiveness, Evidence, Net Impact, and Alignment. In total number, we consider and score 12 impact-related metrics (two under each pillar).
Our overall impact score for Bioceres is 74%. Bioceres’ score is unevenly distributed across our six impact pillars (see Figure 4). It has the maximum score for Alignment, and scores well for Effectiveness, reflecting the high levels of innovation in its product portfolio. However, it scores only 1 out of 6 for net impact. This is due to the low score it receives from our third-party impact data provider, The Upright Project. Upright uses an AI-driven approach to quantify negative and positive impacts across 19 types of impact based on the company’s products and services. The low score for Bioceres is driven by the negative environment impact of synthetic fertilisers, which currently make up about 15 – 20% of the product portfolio. Based on the company’s strategy, we believe these products will become an increasingly small proportion of Bioceres’ revenues compared to products like microbial inoculants, biological fertilisers, and drought-resilient seeds (HB4), which have net positive impact profiles from Upright.
Identifying engagement priorities
A critical component of our contribution to impact as investors is active engagement with our holdings, with a view to enhancing positive impact, reducing impact risks and improving management of ESG issues. The table below summarises the engagement priorities and progress we have made over the last three years.
Monitoring impact progress
Due to the nature of Bioceres’ business, the ‘typical’ impact KPIs we look at are not as relevant and/or challenging to measure accurately (e.g., number of people reached). However, Bioceres has increasingly been disclosing impacts of its products (something we have been encouraging the company to do since 2021). The first image below, included in Bioceres’ most recent results call, highlights the carbon and water efficiency of HB4 wheat; while the following image highlights both the criticality of wheat farmers in Argentina in terms of climate challenges as well as the effectiveness of HB4.
 Sources: Bioceres publications (available at: https://investors.biocerescrops.com/home/default.aspx), Arisaig Partners site visits, Arisaig analysis.
 See Impact Frontiers for more information on the Five Dimensions of Impact (https://impactfrontiers.org/norms/five-dimensions-of-impact/).
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