If the world is to halt biodiversity loss, limit climate change to below 1.5 C and achieve land degradation neutrality by 2030, annual finance flows to nature-based solutions must urgently double from $154 billion to $384 billion by 2025 and triple by 2030 ($484 billion), according to the State of Finance for Nature (SFN) 2022 report, published December 1st by the United Nations Environment Programme in collaboration with the Economics of Land Degradation with support and analysis from Vivid Economics by McKinsey. This flagship report offers insights into the challenges that Good Food Finance Network (GFFN) is addressing, while also serving as a timely signal for action following the United Nations Climate Change Conference or Conference of the Parties of the UNFCCC (UNFCCC COP27) in Sharm el-Sheikh and looking ahead to the upcoming United Nations Biodiversity Conference of the Parties to the UN Convention on Biological Diversity (UNCBD COP15).
This year UNFCCC COP27 gave a more prominent role to food and agriculture in relation to previous years – even being referred to as the Food COP with dedicated Food Systems and a Food and Agriculture Pavillion. The official negotiations sent positive signals in this direction as well, with food included in the “Sharm el-Sheikh Implementation Plan”. Furthermore, the only formal UNFCCC workstream for food systems, the Koronivia Joint Work for Agriculture was renewed for another four years. From a food and finance perspective, positive developments occured in Sharm el-Sheik, among them the launch of the Food and Agriculture for Sustainable Transformation Initiative (FAST), jointly announced by the Egyptian presidency and the Food and Agriculture Organization (FAO) and which identified the GFFN as a relevant global network to transform agriculture and food systems by 2030.
Despite these and other signs demonstrating that food systems will be more strongly recognized for their importance in the climate change agenda, the SFN report shows little progress has been made on the food finance front. Contrasting the multitude of ‘net zero’ and ‘deforestation-free’ commitments being made from the global community of agri-food companies, banks and investors between UNFCCC COP26 and COP27, the SFN report finds that impact investment and investment in sustainable supply chains have minimal growth. Furthermore, the findings demand private sector capital flows to increase dramatically and immediately from the current $26 billion/year, which comprises only 17% of current total Nature-based Solutions (NbS) investments. Delayed action is no longer an option in the face of the triple planetary crisis – land degradation, biodiversity loss and pollution – which also causes high risks of value loss for companies and investors.
Eric Usher, Head of UNEP Finance Initiative said,
“Food systems sit at the intersection of environmental challenges, and financial institutions need to be partners in action. The financial sector underpins a strong economic recovery, climate action, nature protection – playing a role in food systems is critical. Banks, investors, insurers, agribusinesses can help influence clients and suppliers to improve policies and drive financial flows to more sustainable food systems.”
The Good Food Finance Network (GFFN) is working to mobilize public and private financial actors to address the financing gap covered in the SFN 2022 report. For example, actions by GFFN’s leadership initiative, the High Ambition Group, directly correlates with the SFN 2022’s recommendations to lock in critical targets on biodiversity loss and take urgent action to implement existing targets.
Bernhard Stormyr, VP Sustainability Governance at Yara international & HAG member said,
“We all need to do better in order to deliver what we have promised that we will do by 2030. We are dedicated to do it, but we cannot do it alone – so GFFN is one way where we are engaging in order to enable the right investments.”
GFFN’s High Ambition Group is working with public and private financial institutions, including global environmental funds, banks, asset managers, fin-techs and agri-businesses to set ‘high ambition’ targets, urging the wider finance sector to ‘supersize its ambition’. Targets were publicly announced and discussed during the recent GFFN co-hosted session on ‘Financing a sustainable and just food system transition’ held at Sharm El-Sheikh’s UNFCCC COP27, setting the stage for sector wide transparency, accountability and action.
High Ambition Group Targets have been set across environmental and social impact areas and geographies by 7 HAG members – including Rabobank (NL), Nuveen Natural Capital (US), Signature Agri Investments (NL), Global Environment Facility (US), Phatisa (Mauritius), Yara (Norway), and FIRA (Mexico)—the largest source of finance for agri-food and rural sectors in Mexico. Learn more about the publicly disclosed targets here.
Khoushbou Singh Sewraj, World Farmers Organization said,
“We cannot just rely on the government to take initiatives on financing, we need the private sector to step in. Linkages have to be created on the public and private side: Co-solution and co-participation as a strategy forward.”
The Breakthrough Agenda Report 2022 from the International Energy Agency (IEA), the International Renewable Energy Agency (IRENA) and the UN Climate Change High-Level Champions highlights five sectors to accelerate transitions through stronger international collaboration – including agriculture with a call to improve access to finance, increasing the flow of public finance, and its leverage of private finance.
Ertharin Cousin, CEO and Founder, Food Systems for the Future said,
“A food system transition would require (a) A whole of society transformation; (b) Policy support from governments; (c) Identifying the investments needed from the private sector; (d) Building the businesses that are necessary to scale them up; and (e) Understanding the relationship between consumption and farmers”
As announced during a Press Conference at UNFCCC COP27, the GFFN is supporting the implementation of the breakthrough priority international actions for agriculture, with the activation of the workplan for the development of a Co-Investment Platform for Food Systems Transformation (CIP), including cooperative efforts across six work packages. The CIP is working through the GCF Readiness Programme to identify, facilitate and deliver critical capacities needed for mobilization of funding to CIP-linked or relevant activities, to assist interested countries in preparing for scaled-up investment flows to nature and food systems. The GFFN is in dialogue with the UNFCCC COP26, 27, and 28 presidencies to link the CIP to key commitments and implementation imperatives supported by each.
Another announcement from the GFFN to support this Breakthrough Agenda was the launch of the Discussion Draft on Data Systems Integration for scaling up sustainable food finance, outlining the priority areas of practical need and problem solving that are integral for data systems integration. The aim is to link real-world practical capabilities with strategic imperatives to reveal previously hidden value added from investments in healthy sustainable food systems.
GFFN’s core partners have contributed to turn UNFCCC COP27 into a significant “Food COP”, with successes such as the FAIRR initative investor campaign that called on the FAO to develop a 1.5°C aligned roadmap for agri-food systems, which the FAO committed to do by UNFCCC COP28 next year. As part of the GFFN press conference, the World Business Council for Sustainable Development (WBCSD) laid out the roadmap to achieve sustainable rice production with its profound research report detailing investment needs and opportunities for the sector. Co-produced with the Just Rural Transition initiative and Sustainable Rice Platform, the findings of the report lay the ground for two new finance tools that are currently in development. EAT Founder and Executive Chair Gunhild Stordalen highlighted the important knowledge work EAT is doing to facilitate delivery of the Food System Economics Commission report, support city-region integrated food policy planning, and anchor a new round of consultations to bring stakeholders’ priorities and experiences into the work of the EAT-Lancet Commission 2.0.
Jeremy Coller, Chair of FAIRR Initiative and CIO of Coller Capital said,
“It’s taken 27 years to put food fully on the agenda, and this is just the start. The GFFN is vital and will help accelerate the transformation of the global food system.”
These are examples of the transformative work driven by members of the Good Food Finance Network, which brings relevant experts and finance actors together to address the most pressing challenges in the food and finance space. Join the Network now to catalyze transformative action which scales up investments in sustainable agri-food systems.
Susan Gardner, Ph.D. Director, Ecosystems Division at UN Environment said,
“The time to act is now – Financial decision-makers, from both the public and private sectors, have the opportunity to work together to accelerate change, mitigate risk and unlock opportunities.“
About GFFN: Convened and coordinated by The United Nations Environment Programme, EAT Foundation, FAIRR Initiative, World Business Council for Sustainable Development and Food Systems for the Future, the Good Food Finance Network (GFFN) offers a platform for finance stakeholders, global environmental funds, banks, asset managers, fin-techs and agri-businesses to collaborate and take action to overcome challenges and scale-up capital flows into sustainable food systems. Learn more about our working groups and get involved today.