Responsible for one-third of global greenhouse gas emissions and a primary driver of deforestation, food systems are integral to achieving climate and nature targets. This was recognized at the 28th United Nations Climate Change Conference (COP28), having for the first time, a featured day devoted to food and agriculture.
The outcomes of COP28 have underscored the critical role of the food and finance sector in addressing global challenges, including climate change, biodiversity loss, and deforestation. The final COP28 agreement document acknowledges that food systems play a key role in appropriately addressing climate change. It encourages the implementation of integrated, multi-sectoral solutions, such as resilient food systems, land-use management, sustainable agriculture, nature-based solutions, and ecosystem-based approaches in achieving the purpose and long-term goals of the Paris Agreement.
Globally, 3.1 billion people can’t afford a diverse and nutritious diet. Some 800+ million people are undernourished. We must move beyond talking about a sustainable transformation of the food system towards delivering the capital required to scale the businesses necessary to create a food system which reduces greenhouse gas emissions and supports universal access to nutritious food.”
– Ertharin Cousin, President and CEO, Food Systems for the Future
This global conference commenced with the signing of the UAE Declaration on Sustainable Agriculture, Resilient Food Systems, and Climate Action – a landmark agreement signed by 159 countries. The declaration signifies a global commitment to scale-up adaptation and resilience for farmers, fishers, and food producers. It involves the mobilization of social protection systems to promote food security and nutrition, as well as the improvement of support for agriculture and food system workers to ensure inclusivity. Signatory nations committed to several key actions by 2025: integrating agriculture and food systems into their National Determined Contributions; restructuring policies and government support towards practices that both reduce emissions and bolster human and ecological resilience; scaling and enhancing access to diverse forms of finance in food systems, including smallholder farmers; increasing investment in science and innovation; and reinforcing the multilateral trade system to align with the goals outlined in the Declaration.
In parallel with this agreement between member states, over 200 non-state actors, including the Good Food Finance Network (GFFN), have signed a call to action for Transforming Food Systems for People, Nature and Climate. Additionally, the World Business Council on Sustainable Development (WBCSD), a founding partner of GFFN, is actively engaging the private sector to align with the collective vision of this Non-State Actor Call to Action. To ensure that this aspiration translates into concrete steps, WBCSD has collaborated with its members to develop a ‘Business Statement of Action’.
“In an unprecedented manner, COP28 brought together businesses, financial institutions, farmer groups, local communities, youth and cities in a shared vision outlined in the Non-State Actor Call to Action. While all groups have been working on these issues respectively, this coming together to agree on a shared statement is really a first, and I hope is the signal of a movement towards greater collaboration across a multi-stakeholder agenda.”
– Victoria Crawford, Senior Manager, Policy & Investment Partnerships, World Business Council for Sustainable Development (WBCSD)
Bridging Finance and Sustainability: The Good Food Finance Facility’s Role
During the conference, the Good Food Finance Network announced the start up phase of its ‘Good Food Finance Facility’ on December 4th. This Facility is distinguished from being just another new fund; rather, it functions as a vital “connective tissue” that facilitates the collaboration of existing funds and facilities with new financing opportunities. It achieves this by aggregating diverse sources of capital from public, philanthropic, and private sectors. The facility’s primary objective is to link this capital to co-investment opportunities, structured to mitigate investors’ risk and ensure built-in returns. Additionally, the Good Food Finance Facility addresses critical gaps in the food system by providing seed capital, particularly supporting marginalized actors requiring access to resources and incentives.
“I think this Good Food Finance Facility is a must, and I think the entire fiscal landscape on food is so fragmented. philanthropy, public, private – it doesn’t matter what you touch. Somehow we all need to converge and move in the same direction rather than duplicating efforts… Something has to change, and I think this facility is going to do it in a big way“
– Geeta Sethi, Advisor and Global Lead for Food Systems, World Bank
The Facility also offers accountability and guidance through (1) a ‘Good Food Finance Investment Framework’, led by GFFN partners EAT and UNDP. This Investment Framework is essentially a set of guidelines that translates the latest science and widely applied standards (such as SDG impact standards, and the forthcoming EAT Lancet 2) to foster consistency and cross referencing. Secondly, (2), the facility links data for both financial and non-financial players through an ‘Integrated Data Systems Initiative’. Current metrics, ranging from nutrition, earth systems, and climate, are not easily linked to financial risks and returns. The Integrated Data Systems Initiative is an innovative tool to allow for multidimensional performance and connect relevant sectoral data. GFFN welcomes public and private financial actors to get involved in these workstreams.
Unveiling True Costs: Transformative Actions in Sustainable Food Systems and Nature-Based Finance
During the session ‘New financial mechanism, pricing & subsidy strategies to transform food systems & meet climate goals’, panelists highlighted the need to account for hidden social, environmental and health costs when considering investments – also referred to as true cost accounting. As presented in the newly published FAO State of Food and Agriculture 2023 report, hidden costs account for nearly 10% of global GDP, and the report emphasizes many contradictions – issues of hunger versus obesity for example. These findings are useful for policy makers and for raising awareness on sustainable food systems transformation. The FAO also unveiled a Global Roadmap for Sustainable Food Systems offering guidance to both limit global temperature rise to 1.5 degrees while addressing the SDG #2 – ending hunger. This compliments WRI’s World Resources Report, Creating a Sustainable Food Future, and the FOLU’s Growing better report.
Similarly, during the session on ‘Finance for nature: Unleashing a $7 trillion opportunity for realignment’, Mirey Atallah, Head of Nature for Climate Branch at the United Nations Environment Programme emphasized how it is crucial to begin incorporating natural capital into the public accounting and budgeting processes of states. In doing so, we can shift the perspective on how we use natural resources from a short-term financial gain to a long-term economic cost, with the end goal of internalizing the true costs associated with nature degradation. Thereafter, governments, regulators, and public institutions will be incentivized to guide investments toward nature-positive outcomes. This not only acknowledges the importance of preserving our natural resources but also establishes a framework where sustainable choices align with economic interests in the long run.
Concurrently, the session announced the newly published State of Finance for Nature 2023 report, providing for the first time, analysis of public and private finance flows that negatively impact nature, equating $7 trillion USD. The report, published by GFFN founding partner UN Environment Programme, found that 90% of public negative flows are directed to fossil fuels (69%) and agriculture (20%). While these figures are sobering, the report also identifies actions from public and private actors that can help shift these financial flows. As identified during the session, there isn’t a lack of money – the money is just going the wrong direction, to the wrong places.
Governments and policy actors can amplify their influence on the private sector by implementing and incentivizing regulatory mechanisms. One strategy involves enforcing required due diligence and offering tax breaks to encourage the transformation to sustainable supply chains. Simultaneously, business and finance actors can scale-up investments in Nature-based solutions, particularly in the transformation of food systems. This encompasses the adoption of regenerative and conservation agricultural methods, fostering sustainable supply chains for forestry and fisheries. It also involves seizing opportunities for innovative financial mechanisms to recognize nature as an asset class, thereby creating new revenue streams. The report calls for business and finance entities to thoroughly assess, report and disclose nature risks, impacts, dependencies and opportunities using available disclosure frameworks, (e.g. with the TNFD). Furthermore, there is a call to commit to targets aimed at reducing biodiversity and climate impacts, utilizing existing guidance and tools, such as those provided by the GFFN’s High Ambition Group. Subsidies for the global food system are over $4 trillion USD, only falling behind oil and gas. Therefore, there is a huge opportunity to move these subsidies to support food system transformation, and influence private sector investments in innovative solutions.
Countries around the globe are demonstrating tangible action in response to this call.
For example, during the session Sustainable food system investments: accelerating public private partnerships, the UK Government launched their International Development White Paper, a report outlining the UK’s long term vision in terms of how we can work together to prevent famine, to build more resilient food systems, and to supercharge the efforts to get back on track to meeting the 2030 global sustainable development goals. The white paper identifies the food system and nutrition crisis, and an existential challenge of feeding global populations in the face of conflict, economic turmoil, climate change and biodiversity loss. To achieve a food systems transformation, the White Paper highlights:
- The agriculture sector growth can be one of the most effective ways of reducing poverty in low-income countries.
- It will be vital to invest in new technologies and innovation for agriculture and food systems to increase sustainable, climate resilient food production.
- There is a need for demand driven research, focused on the needs of the lowest income rural communities, that will help encourage the adoption of new technology at scale.
- Development investment including climate finance and private investments should be increased and provided in a way that works for SMEs and smallholder farmers.
In Africa, approximately 40% of food is wasted, which is a major risk to people and resources, and has implications on food costs, nutrition, and accessibility. The Rwanda Sovereign Fund, in partnership with US AID, has signed a MoU with Agaciro Development Fund, to transfer investments and debts from the government sector, to instead be a commercial entity. This case study demonstrates how collaboration and partnerships in the food and finance sector can be key to addressing such risks. This is supported in part by the Good Food Finance Network, through our Innovative Collaborative Funding Model. We urge you to read the paper on the Innovative Collaborative Funding model.
Next Steps for Food System Transformation, Building on COP28 Commitments
“COP28 made history in placing food and agriculture at the center of the world’s largest climate stage, and this momentum must continue.“
– Diane Holdorf, Executive Vice President World Business Council for Sustainable Development (WBCSD)
There is a universal call to come to the next COP with deliverables, with impact, with demonstrated progress. In order to achieve a food system transformation, we must apply value to ecosystem services, including value on forests, biodiversity, and freshwater.
“Nutrition and climate change are fundamentally linked. We need market change towards healthy and sustainable diets that promote individuals’ health; have low environmental impact; and which are accessible, safe and equitable for current and future generations. While it’s important that COP28 had an increased focus on food, there is a risk that we end up in an echo chamber speaking to each other. We need to make new connections that will help change markets and catalyze finance for more sustainable nutrition.”
– Greg S Garrett, Executive Director, Access to Nutrition Initiative (ATNI)
Through 2023, the Good Food Finance Network (GFFN) has been actively fostering collaboration between the realms of food and finance, recognizing it as a key element in transforming our food systems. Notably, GFFN has focused on developing nature and climate metrics to guide and support sustainable investments in food systems. The High Ambition Group, continuing its efforts from COP27, has been dedicated to expanding its membership and evaluating progress toward set targets. Looking ahead, the culmination of these initiatives will manifest in the Good Food Finance Facility—an innovative co-investment mechanism. This facility aims to harness the combined power of public, philanthropic, and multilateral finance to catalyze private sector investments in food systems. Through these concerted efforts, GFFN is progressing the food system transformation, fostering positive outcomes for our health, nature, and climate.
“The science is clear, we must build a narrative that says, ‘you can reduce greenhouse gas emissions, protect our planet, support the access to healthy nutritious food and reduce social inequalities by transforming food systems’. We don’t have the luxury of just focusing on efficient reduction of greenhouse gasses without also talking about food and nutrition security, and meeting humanitarian needs. At the end of the day, this is all about people.”
– Gunhild Stordalen, Founder and executive chair of EAT Foundation
In 2024, the focus remains on consolidating knowledge and ambition for a sustainable, equitable and resilient future.
Good Food Finance Network 