Unlocking access to finance, de-risking, strengthening accountability and transparency mechanisms, and mobilising private capital are essential to achieving sustainable food systems. This includes businesses and financial institutions setting and implementing integrated science-based targets (covering a wide range of environmental social and governance “ESG” dimensions), using effective and innovative risk mitigation approaches (e.g. blended finance) as well as fostering supply chain transparency, risk and impact assessment and disclosure.
Examples of redirecting finance towards sustainable food systems include financiers’ efforts to increase the use of technology to modernize agricultural practices; eliminating the risks of agricultural commodity-driven deforestation from investment and lending portfolios; investing in adaptation strategies; and unlocking new income sources for smallholder farmers through incentivized carbon removal.
Private finance can significantly support sustainable food systems by investing in sustainable agriculture through impact investing and green bonds, fostering innovation with venture capital and R&D funding, and facilitating smallholder access to finance via microloans and agricultural insurance. It can enhance supply chain sustainability through sustainable sourcing and supply chain financing, promote corporate social responsibility with targeted CSR programs and sustainability reporting, and create blended finance mechanisms by partnering with governments and development finance institutions. Additionally, private finance can encourage consumer awareness and demand for sustainable products through marketing and education initiatives, invest in infrastructure and logistics to reduce food waste and carbon footprints and leverage digital finance solutions to improve farmers' access to financial services.
UNEP can support private finance for sustainable food systems by advocating for supportive policies and regulatory frameworks, offering capacity-building programs and knowledge-sharing platforms, and facilitating public-private partnerships. UNEP can provide technical assistance, help mobilize resources and develop financial instruments like green bonds and impact funds. Additionally, UNEP can encourage CSR integration, promote sustainable standards and certification, and raise awareness through campaigns and networking events.
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