This meeting convened by Good Food Finance Network, which will be held on 19 November 2021 between 13:00 and 15:00 CET is designed to kick-start a fruitful dialogue and collaboration between private and public banks to scale up finance for sustainable food systems. Our intention is that this event will mark the beginning of collaborative work to jointly formulate a roadmap and concrete solutions that will significantly contribute to financing a food transition that generates financial returns, is inclusive, environmentally friendly and respects basic human rights of access to nutritious and affordable food.
The development challenges coupled with the climate crisis, call for massive investments in climate-resilient and low-carbon food systems, which can guarantee food security and at the same time do not undermine the natural capital in the long run. Sustainable agricultural practices are more likely to generate long-term, positive financial returns compared to unsustainable practices that, with time, can lead to poor soil quality and lower yields, and increased vulnerability of producers to climatic shocks.
Nevertheless, agriculture is systemically underfunded in developing countries – disproportionately, relative to other sectors– and investments in sustainable, not business as usual agriculture are often perceived as particularly risky. Therefore, private investors are reluctant to increase exposure in this sector, while public development finance is too limited to finance the transition towards more sustainable food systems. In this context, de-risking through smart blended finance provides a pathway for scaling investment for food system transformation.
The UN Food Systems Summit and the COP26 in Glasgow have stressed how the development finance community needs to collaborate more with private financial institutions and investors to leverage limited public funding and increase investment. The PDBs “Platform for Green and Inclusive Food Systems” launched during the Finance in Common Summit in October ‘21 is a step in the right direction to scale up greener and more inclusive investments in agriculture and food systems.
This discussion paper provides the context and proposes an action plan, which will be discussed by the participants. Successful private-public partnerships also require that the finance and development community collaborate through multi-stakeholder working groups to develop a common understanding of sustainable food systems and to align on standardized and simplified environmental and social criteria built on sound scientific evidence. Discussions around this topic will also be encouraged during the event.