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Food & Forest Finance

Our world is facing three pressing global challenges: the climate emergency, nature in crisis and mounting inequality.  Ensuring 9+ billion people can live well, within planetary boundaries, by mid-century requires urgent transformation of global economic systems.  Food fuels our bodies and plays a powerful role in human health, culture, productivity and potential. It is central to livelihoods, creating enjoyment, and connection to family, community and natural ecosystems on land and in water. But the food system is also contributing to the pressing global challenges.  It contributes to approximately one-quarter of greenhouse gas (GHG) emissions, three-quarters of biodiversity loss, and is a leading cause of non-communicable disease adding to societal cost burdens through health care, stunting and malnutrition.  

The Food & Forest Finance project seeks to capitalize on financial levers and interventions to accelerate the food and forest systems transformation. We aim to catalyze change by rethinking how food and agriculture companies are valued, how banks allocate capital at each point along the value chain, how credit is supplied, how the reward system is designed and more. 

    The challenge

    The nature of agriculture and forestry is marked by volatility in production and tight margins for farmers, ranchers, and other producers. The current economic system makes income inequality greater across the food value chain, while not accounting for the hidden costs that the production of food entails. At the same time, the system rewards harmful and unsustainable agriculture practices, while existing subsidies are widely misplaced and fail to target the promotion of regenerative practices. All these factors burden society on many levels, resulting in environmental, social and health-related costs.

    The business case

    Sustainable companies should be rewarded for addressing ESG risks, generating a win-win scenario where people, the environment and business thrive; however, this is unlikely unless the rewards are greater than continuing business-as-usual. Both public and private financial institutions are critical to this transformation by incentivizing, lending, subsidizing and investing in activities that drive positive changes across the food value chain and land use.

    The solution

    Our aim is to align the conceptual and practical elements of how financial markets function to serve the food and forest systems transformation agenda. Conceptually, we believe that the risks and externalities generated by how food is produced and consumed today should be accounted for in financial capital allocation models.

    We aim to leave behind those assumptions that have underpinned ‘business-as-usual’ financial valuation models to embrace systemic economic changes necessary for building a nature-positive, zero emissions and equitable future for all.

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