Food and agriculture businesses commit to specific and time-bound environmental and social targets.
A group of major financial institutions have pledged to lead the way to “cleaner, greener” food and agricultural practices, by setting environmental and social impact targets for US$113 billion of farms and other businesses around the world.
Seven corporate members of the ‘high ambition group’, a subset of the UN-supported Good Food Finance Network, have agreed to be held to a range of targets, including for reducing deforestation and carbon removal.
“The time is over for vague corporate commitments that are not verified, after which everyone has a glass of champagne and goes back to business as usual,” said Ivo Mulder, Head of the Climate Finance Unit at the UN Environment Programme.
“Equivalent to 40 power stations”
The organisations concerned are Dutch bank Rabobank, Mexican development institution FIRA, multilateral funder the Global Environment Facility (GEF), Mauritian private equity group Phatisa, Norwegian chemical company Yara, US asset manager Nuveen Natural Capital and Dutch group Signature Agri Investments.
Each company has its own goals, to be achieved between now and 2030.
Rabobank is planning to support millions of smallholder farmers to move to agro-forestry, with the trees thus planted sequestering 150 megatons of CO2 by 2030, “equivalent to the annual emissions of 40 coal-fired power stations”.
FIRA “will grow its US$350 million climate adaptation and resilience portfolio” 5% year-on-year, starting next year.
GEF is pledged to restore 420,000 hectares of degraded land, improve land management practices in more than 20 million hectares at the same time as reducing the use and waste of harmful chemicals by 21 million tons by 2030.
Phatisa, which operates across sub-Saharan Africa, wants all of its portfolio companies to have drawn up a gender policy complete with “stretching targets to increase female employment across different skill levels by 2025”.
Yara has set a target for 150 million hectares of farmland to benefit by 2025 from digital processes that help in areas such as nutrient efficiency and reduction of pollution.
Nuveen, with 1.2 million hectares in assets under management, will upgrade its zero deforestation policies by 2023, while Signature will move all of its African farm holdings to regenerative agricultural principles by 2030.
Mulder conceded that monitoring progress towards these various targets would, in some case, be labour intensive, but there were ways of keeping costs down. “With the agricultural targets we have remote sensing, while even with the social goals there is scope for automating the supply of this information by clients of investors and banks in such a way that protects client confidentiality,” he said.
“A lot of issues coming together”
At just seven members, a relatively small number of organisations have signed up to the programme so far. Mulder said: “I would rather have a smaller group of really committed organisations.”
Eric Usher, Head of the UN Environment Programme’s Finance Initiative, said: “From digital tools to zero deforestation, this new generation of high-ambition targets can enable a cleaner, greener food and agriculture sector.”
But he added: “There is still a long way to go and the wider finance sector must use COP27 to supersize its ambition and grow a more sustainable food and agriculture sector.”
The network is jointly convened by EAT Foundation, FAIRR Initiative, Food Systems for the Future, the UN Environment Programme, and the World Business Council for Sustainable Development. Partner organisations include the World Bank, the UN Conference on Trade and Development, S2G Ventures, the UNEP Finance Initiative, the Global Environment Facility (GEF), Just Rural Transition and the Principles for Responsible Investment.
Wiebe Draije, former chief executive of Rabobank and Co-chair of the Good Food Finance Network, said: “Identifying what a state of the art, credible target to finance sustainable food and agriculture looks like is a vital part of addressing the urgent climate and food crises.”
He added: “Increasing financial flows to the sustainable food transition must be at the top of the COP27 agenda if leaders are to leave Egypt with a viable plan for achieving a net zero world.”
Mulder concluded: “The Good Food Finance Network is beginning to take a systemic approach, looking at problems in a holistic manner. Ultimately, a lot of food issues are coming together.”