A new report has compiled more than 50 examples of financial projects aimed at generating more than $1bn in capital for sustainable land-use projects
Transforming today's food and land use system so it is aligned with a sustainable future could unlock $4.5tr in new business opportunities every year, according to a new report published this week laying out dozens of multi-million-dollar projects that are already working to accelerate the adoption of greener agricultural and land management practices.
The report from the Blended Finance Taskforce warns that without fundamental reforms to the food system sectors linked to biodiversity loss, deforestation, and climate change are set to see their value rapidly eroded by consumer trends, new regulations, and net zero commitments. Titled Better Finance, Better Food, the report warns that investors risk being hit by mounting physical and financial risks if they fail to shift capital away from unsustainable food and land use portfolios.
The report bases its conclusions on an analysis of inefficiencies in the way food and land use are currently financed, arguing they typically fail to price in the hidden costs of climate-related financial, social, and environmental risks. It estimates these risks - which will have to be addressed if nations are to progress towards their net zero emissions goals - total a massive $12tr a year.
"Investors will be left behind if they don't shift capital out of 'four degree' food and land use portfolios and into more regenerative, nature-positive assets," argued Katherine Stodulka, director at the Blended Finance Taskforce, a network of leaders from the financial sector working since 2017 to tackle barriers that prevent capital flowing into net-zero projects.
As well as sounding warning bells for investors that fail to act, the report also examines how capital can be reallocated to build a healthier, more sustainable food and land use system, advising that investments worth $300bn should be moved out of the current "extractive, destructive" food and land use system and towards "sustainable" approaches.
Examples of these sustainable business models and financial solutions are offered in the report via more than 50 case studies which are already shifting $1bn towards greener projects and assets. These run from providing insurance to smallholder farmers in Africa; to designing and deploying effective carbon offsets; to creating market incentives for lending to agricultural SMEs in sub-Sarahan Africa; to generating investment in the management of marine ecosystems, among dozens more. Taken together, this catalogue of case studies covers efforts to mobilise more than $1bn of investment in sustainable land use, encompassing work by venture philanthropists, angel investors, early-stage venture capitalists, institutional investors, and development capital providers.
The report urges businesses to "stop reinventing the wheel" and instead replicate the proven success stories it brings together from across a range of sectors and regions. "There is a strong pipeline of investable assets around the world: but to attract mainstream capital we need to scale what is working," Stodulka concludes.