- We urgently need to change the way we produce and consume food to feed a growing global population and meet the 2030 deadline for the SDGs.
- Building a bridge between food and finance and embracing finance is an essential way to expedite this transition.
- Ahead of the 2021 UN Food Systems Summit, here's how the finance sector can innovate and work together on food system transformation.
By 2050, the world will need to feed nearly 10 billion people while remaining within our planetary boundaries. To meet this need, the way we currently produce and consume food needs to change.
The World Economic Forum’s Bold Actions for Food as a Force for Good virtual event, 23-24 November, shows how many stakeholders worldwide are already engaged in discussing food systems’ transformation, from smallholders, large corporates and businesses to governments, farmers and civil society – with major representation from youth organizations.
We can only activate the transition through cooperation: every stakeholder in the food value chain has a pivotal role to play in creating healthier, more equitable and more sustainable food systems. With the deadline for the 2030 SDGs fast approaching, we must all act now.
Finance as a stimulant for change
The two-day event has three clear aims as we look toward the UN Food Systems Summit in 2021. These include identifying the bold actions, science-based principles and game-changing initiatives we need to change our food system; as well as, crucially, the goal of creating a diverse global network of leaders who can drive this transformation.
To the ambitious goals of the event, I would like to add a fourth objective that is close to my heart: building a bridge between food and finance and embracing finance as an essential way to expedite the food transition.
In many ways, finance has been seen as a kind of capstone in the process of creating a more sustainable food system, instead of a partner or agent of change from the start. If we can turn this sentiment on its head and welcome financial players and institutions into the food system conversation, I believe the financial sector can become an enabling force behind the transformation we all want.
Together with partners
As a banker, I can say that our clients are at the heart of our business strategies and ambitions. Clients who are working hard across every part of the food value chain. They need to future-proof their businesses and many need guidance through this necessary transition. They face shifting consumer demands, regulatory changes and uncertainty about global trade and markets. They deal with questions such as “I’d love to become more sustainable, but can I afford it?” and “How can I make consumers realize how much their food really costs?”
We support and guide our clients through these challenges not only with financial solutions but also with our networks and food and agriculture expertise. As we work towards the UN Food Systems Summit next year, we aim to bring those very tools – our knowledge and global connections – to the task of food systems transformation.
We plan to share innovative ideas and best practices, like green and blended finance solutions. We’ll look at the success of existing initiatives like our FoodBytes! innovation platform, the Food Waste Challenge in the Netherlands and the “Biodiversity Monitor” for dairy farmers. We’ll also create new initiatives like the Food4Future hackathon series to give Gen Z a voice in food systems change.
It’s important to mention the more general finance-related issues that must be addressed to create a better investment climate for food systems transformation. We must:
- address issues including the so-called “Risk-Duration-Reward” triangle;
- find long-term lending possibilities for sustainability solutions;
- align portfolios to match different climate scenarios;
- and increase collaboration between existing business/finance coalitions and (public and private) funding.
We can’t do this alone, not as a single bank. To mobilize the financial sector, we’ll need to innovate and work together. We’ll need you – our partners and fellow value-chain stakeholders – to embrace the role of finance in the process of food systems transformation.
Have you read?
Taking bold action
Since “bold actions” are the name of the game, let me leave you with two bold actions I’d like to propose:
1. A call for scientific guidance on true pricing with an integrated, holistic approach – combining environmental externalities with nutrition and health. We need the right metrics to make the best decisions.
2. A Finance for Food Systems Network, bringing together existing (public-private) finance coalitions and coordinating investments