Good Food Finance Facility

Convened by EAT Foundation

AMBITION STATEMENT

The Good Food Finance Facility will be both a financial mechanism and a coordinating mechanism, and will have to facilitate finance in four work areas in order – building over time a dynamic of increased mutual accountability for shifting capital flows in alignment with 1.5+ imperatives. 

The Good Food Finance Facility is a meta-innovation at the system level, to catalyze and accelerate this urgently required, massive shift and scaling of finance for healthy, sustainable food systems, across all relevant existing, new and emerging pools and flows of finance.

summary

Building a Co-Investment Platform for Food Systems Transformation

Unblocking finance flows through the convening of finance actors, facilitating finance in four work areas:  
  • Facilitating co-investments: Identify relevant partners to develop co-investments with and through the Facility’s coordination functions and participate in multilateral arrangements and diverse co-investment strategies. The Innovative Collaborative Funding Model has been developed as an investment case for the good food transformation that goes beyond the existing blended finance solution by bringing a multitude of players and innovation together to foster good food finance optimizing investment cost and risk sharing with climate and soil-friendly best practices fostering productivity.
  • Bridging funds: Support investors to both access the private sector windows of blended finance funds available, and to develop public-private investment partnerships and bespoke financing solutions that can increase competitiveness, market share, and customer/client and shareholder satisfaction.
  • Instrumentation: Identifying, tailoring, and developing the optimal financial tools and strategies needed to fill critical gaps and reach underserved communities, allowing investment partnerships to move at speed and scale.
  • Mutual accountability: Include credible data and accountability systems, enabling the accounting, reporting and disclosure of climate, biodiversity, social and nutrition-related metrics, through established reporting frameworks including ISSB and GRI. Work under this area includes the Integrated Data Systems Initiative and the development of a Good Food Investing Framework.

Two areas of preparatory work will underlie these four work areas:  

  1. The Country Readiness Program, operated in collaboration with the Green Climate Fund, will strengthen the pipeline of investable projects, with a focus on middle and low-income countries. The Country Readiness work aims to support countries to catalyze and scale up public-private co-investments in climate-responsive food and agriculture systems. Countries involved in 2023 include Chad, Cuba, Equatorial Guinea, Mozambique, Mauritania, Uganda, and Zambia.
  2. The Landscapes Portfolio will map existing relevant landscape-level interventions, urban-rural cooperative policy, catalytic funds and facilities, and co-investment arrangements to identify investment opportunities at the landscape level. This will increase the availability of business opportunities with acceptable risk-adjusted returns for investors. 
Featured Op-Ed:
Unlocking Sustainable Food System Investments: Your guide to investing sustainably in the value chain 

Amidst the complex landscape of the food system exists a tremendous opportunity for sustainable investment. SDG Impact Fund, part of UNDP Sustainable Finance Hub, and the GFFN are working together to develop a Good Food Investing Framework, aimed at empowering financial actors to lead the way in building sustainable food systems.

The first initiative is to develop “The Practitioners Guide for Investing in Sustainable Food Systems Transformations” which will be based on the SDG Impact Standards.

Learn more about this work in the joint Op-Ed authored by Olav Kjørven – CEO of EAT and GFFN Convening Partner, and Marcos Neto – Director of UNDP Sustainable Finance Hub.

Click to read more

Structure and Governance

The Facility’s operational structure is being developed based on a thorough analytical and consultative process and grounded in the vision of a cooperative funding facility whose mission is to deliver good food finance to support food systems transformation, for actors large and small, across the value chain.

The Good Food Finance Facility’s Headquarters will need to be distributed across regions and institutions—a distributed HQ. It will need to operate in such a way as to facilitate participation by a broad range of actors, each with its own pre-existing governance commitments, relevant performance metrics, and network of stakeholders. So, the structure needs to be inclusive and aimed at supporting the flexibility required to navigate the early stages of a major combined transformation of food systems and financial systems.

In 2023, we will establish a core group of Governing Partners, whose commitment will include responsibility for staffing and managing the distributed Good Food Finance Facility HQ. This core group of Governing Partners will start initial operations of the Good Food Finance Facility, including further rounds of Readiness funding, development of initial Facilitated Co-investments, pooling, management, and delivery of initial Bridging Funds, and technical development of Instrumentation and Mutual Accountability standards, practices, and services.

Why we need a Good Food Finance Facility

In 2022, the Good Food Finance Network identified the need for a co-investment platform to support catalytic cooperative funding arrangements to fill gaps, strengthen political and market signals, and drive an overall mainstream transformation of finance flows into food systems.  

At COP27 in Sharm el-Sheikh, a work plan was launched to support the co-creation of this new coordinating and financing mechanism. The aim is to start initial operations in early 2024, after a formal launch at COP28 in Dubai.  

A persistent question is how broad the scope and how ambitious the mission of this good food finance facility should be: Should it focus on a narrow set of priorities and test-cases or should it aim to provide universal support for accelerated deployment of good food finance?  

Two categories of stakeholders have consistently called for a narrower focus:  

  • Those aiming to rapidly accelerate action in one particular area;  
  • Those who work as advisors to develop complex new financial arrangements.  

The argument for a broader, even universal application is grounded in input from key stakeholders and institutions that have offered one or more of the following observations:  

  1. We don’t have time to follow the energy transition trajectory, over decades; we need to start mainstreaming good food finance now.  
  2. Individual projects and narrowly focused pipelines of projects are part of the overall transformation, but cannot, on their own, elicit financial intervention on the scale required, and may not be sufficient to transform even local value chains. 
  3. Public, private, multilateral, and philanthropic financial actors need each other to extend catalytic investments to achieve wider transformation.  
  4. The trade implications of rapid food systems transformation mean caution will rule unless there is a global support structure for innovative co-investment approaches.  
  5. Resolving the ticket-size mismatch challenge—where large-scale capital flows cannot efficiently find their way to small-scale actors—requires a multifaceted institutional innovation, with global reach and local and national partners. 
  6. The missing piece, amid all of the worthy and vital initiatives to improve food systems and align with climate goals, is the overarching mechanism that ensures support goes where it is needed when existing institutions don’t make that easy. 

For these reasons, the GFFN’s aim in leading the co-creation of the Good Food Finance Facility is to establish a global facility for coordinating and financing transformational interventions in food systems, wherever possible, as a way to invite more capital to the task.  

The Good Food Finance Facility will not be driving trillions in realigned capital on Day 1. Initial operations (2024) will be narrower and more focused, but when fully operational (2025), the Facility will support tens of billions of dollars in cooperative, multi-sector, international, and local good food finance. By 2030, it will be supporting, directly or indirectly (through partner institutions and networks), hundreds of billions of dollars in good food finance.