WEF Davos 2023: Cooperative innovation to transform food systems finance

During this year’s World Economic Forum annual meeting in Davos, Switzerland, Prof. Johan Rockström laid out the evidence that we are facing a complex and worsening planetary crisis. Of 16 major tipping elements shaping the Earth system, at least 4 are showing signs of being at risk, and many of these including biodiversity and climate change are closely linked to food systems. These tipping points could set off a cascade of disruption and deterioration in the stability of critical segments of the web of life.

Already, the breakdown in ecosystems and loss of biodiversity, biomass, soil richness, and freshwater reserves, are combined to stress food systems and reduce the overall resilience of societies and economies. Three years into the COVID-19 pandemic, we are seeing converging crises add cost to cost at alarming rates, pushing dozens of countries toward deep debt distress and chronic acute hunger conditions.

United Nations Secretary-General Antonio Guterres described the situation of converging and compounding crises as “a category 5 hurricane”. The dimensions of the emerging poly-crisis include food insecurity, widespread inflation, unsustainable debt, conflict, supply chain disruptions, political instability, climate impacts, and the ripple effects of shock events.

A lack of accountability and worsening inequality have helped to get us to this point, he notes, citing fossil fuel company scientists that projected today’s climate crisis and the worsening divide between the wealthiest individuals and the rest of humanity, even in wealthy countries. The SG added his support to the ongoing effort to reform multilateral development banks and international financial institutions, and he repeated his call to the G20 countries to establish an “SDG stimulus plan”. A report on climate finance published just ahead of COP27 argues that up to $1 trillion is needed by 2030 to invest in emerging markets and developing countries in order to reduce emissions, reverse nature, land, and biodiversity damage, and boost climate resilience. In order to scale up international investment, MDBs and international financial institutions are expected to immediately increase the volume of their financing, as the report argues. 

This year’s WEF theme of “Cooperation in a Fragmented World” suggests there is increasing room for action this year on the COP27’s call for more “integrated and holistic” transformational action across food, energy, finance, and industrial systems, and related trade arrangements.

Davos 2023 emphasized connections between food security and public health, including at the global level. As we move toward the Global Stocktake on progress since the 2021 United Nations Food Systems Summit to take place this July, many areas of economic and financial trends, as well as international trade and security relations, are connected to the worsening multidimensional food affordability crisis.

Specifically, on trade, Davos saw a new Coalition of Trade Ministers on Climate formed by the European Commission, EU Member States, and 26 partner countries. According to the European Commission press release:

The Coalition is open to all interested countries, and so far consists of more than 50 ministers from 27 jurisdictions. The four co-leads are Ecuador, the EU, Kenya, and New Zealand. The other participants are: Angola, Australia, Barbados, Cabo Verde, Canada, Colombia, Costa Rica, Iceland, Gambia, Japan (Foreign Affairs & Trade), Republic of Korea, Maldives, Mozambique, Norway, Philippines, Rwanda, Zambia, Singapore, Switzerland, Ukraine, United Kingdom, United States and Vanuatu.

A major priority of the Coalition is to foster constructive, transparent, and world-leading cooperation to accelerate climate-resilient trade and sustainable development. The Coalition will work to provide both high-level substantive guidance on relevant policy and concrete actions nations and groups of nations can take to drive change.

WEF 2023 also emphasized the value of indigenous knowledge to achieve credible climate action and sustainable development. Specifically, active respect for indigenous land rights and human rights is an efficient and effective way to advance conservation goals and to create the real-world collaborations necessary for the verification of conservation actions. This year will see some progress in the area, particularly with Brazil hosting an “Amazon Summit” with all the South American countries belonging to this basin later in 2023.

Overall, this World Economic Forum focused on the emergence of a new, more resilient, and inclusive global economy that is enabled by financial innovation. With financial innovation as one of the key drivers of economic transformation,  the forum explored how innovative solutions can help create a more equitable and sustainable future. The event brought together leaders from the financial industry, technology companies, innovators, investors, and policymakers to discuss the opportunities and challenges of financial innovation. 

Financial innovation will be critical in a number of ways: 

  • To support real improvements in sustainable development conditions for even the world’s poorest unbanked people and communities; 
  • to draw on data systems across multiple sectors, timescales, regions, and areas of concern, including Earth systems, public health, climate risk, and financial valuation;
  • to identify promising new business models for small and medium enterprises that can help to bring sustainable transformation to scale; 
  • to reconfigure internal/external risk imbalances, so financial priority and return are better aligned with sustainable, inclusive, and resilience-building value creation; 
  • to make climate-smart, nature-restorative, health-building outcomes the going concern of mainstream finance.

The Good Food Finance Network (GFFN) is working on financial innovations that enable investments in small and medium-sized food-related businesses, support the growth of sustainable food production, and create opportunities for farmers and small-scale producers. The GFFN is also developing tools to help investors better understand and mitigate the risks associated with investing in sustainable food systems, as well as exploring ways to increase access to financial capital for those who need it most.

Learn more here: https://goodfood.finance/workstreams/ 

Published by GFFN Secretariat

The Good Food Finance Network Secretariat is comprised of the convening core partner organizations’ dedicated team members, who share responsibility for coordinating the Network and its activities. The convening core partners are EAT, FAIRR, Food Systems for the Future, UNEP, and WBCSD.

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