To shift food-related finance to health-building, climate-smart and sustainable practices, investors and public sector decision-makers will need data. Decision-support data for finance that reduces harm and builds resilience, broadly, will need to qualify performance across multiple dimensions. Integrated metrics will be key to achieving an integrated and holistic investment transition.
Article 6.8 of the Paris Agreement envisions ‘non-market’ approaches to international cooperative climate crisis response—any way of working together to accelerate climate action that is not emissions trading. The optimal decision-support data will determine whether such cooperative arrangements operate with the ambition needed for economy-wide transformation.
The Integrated Data Systems Initiative aims to develop a Blueprint outlining strategies for the technical and substantive integration of data systems related to good food finance imperatives, across sectors. It will then shift to building integrated data systems, to accelerate the design and deployment of such systems to drive financial decision-making.
Areas of work
Multidimensional food-related data systems can support all of these areas of international cooperation. For instance:
- Policy, Pricing, and Incentives – Instead of imposing the equivalent of pollution taxes on food, which most people cannot afford to pay more for, integrated data systems can allow for cooperative de-risking of system-wide investment in healthy, sustainably produced food becoming the mainstream norm.
- Prioritization and Performance – Integrated data systems can provide a holistic / systemic picture of supply chains, and allow for tracking embedded carbon pollution, lack of resilience, unsustainable land use practices, or potential vulnerability to market-driven price spikes. The resulting integrated performance metrics can then direct investment toward the better practices that reduce harm across the economy and over time.
- Operational Support – Investing in nature and fiscal rescue can be improved by valuing the non-monetary co-benefits or macro-resilience impacts of specific activities.
- Vulnerability-Response Measures – Vulnerability to climate impacts and food system shocks is a macrocritical indicator, which can not only shape an overall economy, but determine whether it succeeds or fails across the board. Integrating vulnerability and related response measures into mainstream data systems will allow for new financial instruments, insurance services, and public-sector relief, designed to reduce vulnerability and enhance inevitability, across whole economies.
The key word is trade. Because they are modes of international cooperation, non-market approaches always have some impact on trade. Food systems imperatives demand we embrace this fact, and look for the best possible NMA strategies to achieve the best possible outcomes for everyone—especially the most vulnerable.
Non-market approaches to drive system transformation can include any or all of the following:
- Policy, Pricing and Incentives – a) Aligning standards and regulations (in finance, trade, energy, agriculture, banking, and other sectors); b) Climate income policies; c) Carbon-related border adjustments; d) ‘Floor price’ measures that reveal hidden costs and incentivize transition strategies.
- Prioritization and Performance – a) Accounting and avoidance; b) Labeling and tracking; c) Data integration; d) Multilateral coherence.
- Operational Support – a) Investing in nature; b) Fiscal rescue funding; c) Food systems innovation measures; d) Transition assistance, to make sure no community is left behind.
- Vulnerability-Response Measures – a) Vulnerability response resourcing, linked to Loss and Damage; b) Climate-responsive debt relief; c) Co-investment to achieve early warning for all; d) Insurance for livability—beyond the Global Shield to everyday resilience-building in marginal and vulnerable communities.
That the potential areas of non-market cooperation are so many and so diverse is a major opportunity—for innovation, for improving action on multiple dimensions of sustainable competitiveness, and for sustainable human development. Connecting data systems that inform decisions across these areas to data systems that track the health and wellbeing of people and of natural systems can provide clarity about which actions should happen when, and where the smartest investment is, for actors in the public, private, or multilateral sectors.
We propose here a select group of focus areas where integrated data systems, providing multidimensional performance tracking, could support transformational NMAs that shift food systems, enhance overall climate action, and consolidate sustainable development gains.
Nutrition Security
Context: Global heating and climate disruption are bring us closer to a time of repeated breadbasket failure—when major food-growing regions will be unable to provide consistent, reliable food security. Industrialized food systems are making us sick, creating deep and pervasive vulnerability to novel pathogens like COVID-19. Nutrition security means there is not only enough food for all, but that food is able to provide for better health outcomes for even the least affluent people.
NMA: A nutrition security pact, linked to the proposed Climate Solidarity Pact, could involve a diverse group of trading partners, some producing for export, others dependent on imports, organizing their banking and financial regulations, and data flows, to incentivize sustainable production, regenerative land use, resilient buffers to address crop failure, and affordable food that is healthy. Consistent reinvestment into cooperative activities that enhance inclusive, affordable nutrition security can become a foundational element for wider sustainable trade and development.
Data: Integrated data systems can provide interconnected and cross-referencing insights on climate and environmental impacts from production methods, regenerative practices and outcomes, food supply security benefits, human health impacts, and wider macroeconomic and fiscal stability impacts. The result would be multidimensional decision insights that show direct links to sustainable practices that make nutrition security possible for people of all income levels.
Watershed Resilience
Context: Watersheds are critical contributors to sustaining ecosystems, biodiversity, and the conditions for healthy, sustainable agriculture. The health and resilience of watersheds and ecosystems also provide conditions for lower cost of water management in urban areas downstream.
NMA: Financial arrangements, including multi-stakeholder bonding initiatives, can be structured to reward practices that reduce harm and build resilience for watersheds and ecosystems. When there is direct financial benefit to communities and regions, additional benefits can be provided—including favorable tax treatment, or in cases of trade, reduction of tariffs, to recognize compliance with clean water and sustainability standards.
Data: Municipalities, conservation actors, communities, and agricultural interests, including both large-scale value-chain actors and small family farms, produce, hold, and require data relating to the health and wellbeing of watersheds and ecosystems. Connecting these data streams with Earth systems observations from national space-based platforms and with financial data streams can allow for entirely new financing strategies and financial instruments, to support investment in practices that support watershed resilience and ecosystem restoration and conservation.
Pandemic Prevention
Context: Zoonotic spillover—the transfer of novel pathogens from wildlife to human beings—is becoming a recurring threat to health and wellbeing of people and societies. The incidence of spillover is increasing, as an expanding and urbanizing human population destroys natural habitat and pushes ecosystems together. The savings to national economies and treasuries from significant reduction in pandemic risk could be one of the primary drivers of future fiscal stability.
NMA: Conservation of ecosystems, habitat, and biodiversity, is critical for preventing the further acceleration of spillover events. Investing in nature will be critical for achieving active, ongoing, and sustainable conservation. Public health investments, as well as research and development of critical emergency response measures, can benefit from incentives linked to pandemic risk reduction through nature-based solutions and infrastructure planning. Material reduction in risk can become a benchmark for long-term financial arrangements, institutional investment decisions, and for the design of insurance and reinsurance instruments.
Data: Hard data that detail specific pandemic-related risks in a specific industry or region don’t need to be publicly shared for the insights linked to that data to go to work in the marketplace. Pandemic surveillance information, public health data, emerging research trends, and the relative market opportunity of businesses that could experience or drive risk in these areas, can be linked to multidimensional resilience value metrics used by financial decision-makers. In other words, reducing pandemic risk for all can be valued more directly, if multidimensional metrics are available to relevant decision-makers.
Financial Reform
Context: As we breach planetary boundaries and consume more resources than the Earth can sustain, financial inefficiencies that used to remain hidden are showing up everywhere. Climate disruption is one example; habitat destruction, biodiversity loss, and zoonotic spillover are other examples. It is unaffordable to continue business as usual; multilateral financial institutions are working to update their missions and reform their operations, to meet the complex challenges of our time.
NMA: A multi-sector resilience value cooperative arrangement, to detail and grade risk-inducing and risk-reducing activities can provide needed acceleration for transformation of financial institutions and sovereign debt obligations. An NMA can be established that facilitates data systems integration, deployment of multidimensional metrics, and pro-active restructuring of financial arrangements and debt obligations, to improve our collective ability to meet critical sustainability goals, including the 1.5ºC upper limit for global heating, the SDGs, and targets laid out in the Global Biodiversity Framework. This can also serve as a shared barometer for determining the optimal approach to realignment of government-backed incentives.
Data: Linking international financial institutions’ decision-making to multidimensional resilience value metrics can bring future cost and risk into the present, making clear the hidden cost of unsustainable practices, while revealing the hidden value of sustainable practices that build resilience and foster inclusive development outcomes. This resilience value data network will need to draw from and serve actors in the public sector, private sector, as well as multilateral institutions that deliver finance or track and grade its performance.
Tracing market opportunity
In the coming months, the Good Food Finance Network will be working to identify opportunities for discrete business model innovations and delivery of marketable services to end users, based on these insights. Linkages between Good Food Finance data systems integration efforts and emerging non-market approaches under Article 6.8 of the Paris Agreement will play a role in the developing Blueprint for Data Systems Integration to Support Good Food Finance Decision-Making.
As we shift from previously prevailing standards for financial value creation to new standards based on multidimensional performance tracking, international cooperative arrangements to facilitate the delivery of best available decision-support data will play a crucial role. These NMA-data linkages will also form part of the background planning process for development of a new Co-Investment Platform for Food Systems Transformation.
Good Food Finance Network 