Financial Markets Roadmap for Transforming the Global Food System
A report published by market leading thinktank Planet Tracker and co-authored by Ewan Mitchell, Cleavemoor’s founder. The report is 145 pages long and we will be drawing out some of the key points in future newsletters. Here we have provided a summary of the headlines and recommended actions. A link to the full report can be found at the bottom of the page.
The global food system is a significant source of harm to the climate, to nature and to society
The global food system is a significant source of harm to the climate, to nature and to society. Unless it is transformed, financial institutions will be unable to meet their Net Zero ambitions and (more importantly) humanity will be unable to meets its ambitions to limit climate heating to +1.5ºC by 2050, and to restore nature and achieve the UN’s 17 Sustainable Development Goals (including ‘zero hunger’) before 2030. The financial consequences of this collective failure will be significant.
Finance has a major role to play in supporting and driving the required transformation of the food system. It is estimated nearly USD 9 trillion of private finance is currently supporting the global food system (63% of its estimated asset value of USD 14 trillion) and that private finance already has the capacity to provide c.USD 630 billion annually.
The report sets out four food system transformation themes that financial institutions should focus on to ensure they are aligning their capital and investment processes with the food system changes required:
– Responsible supply chains
– Increase food system (true cost) efficiency
– Reduce pollution
– Sustainable product offerings
Financial institutions should use these themes as the basis to construct a food system investment strategy to guide their capital allocation and engagement with companies and governments. For those financial institutions that want to take immediate action the report identifies six Priority Actions to achieve before 2030 that fit within the Four Themes framework and have the potential to significantly reduce the harms coming from the current food system. Financial institutions can undertake all six Priority Actions or select those that best fit their investment philosophies and portfolios.
Financial Institutions should aim to achieve these six Priority Actions before 2030:
#1 Fully traceable supply chains
#2 Halve food loss and waste
#3 Stop deforestation
#4 Cut methane emissions by 45%
#5 Make agriculture/aquaculture systems regenerative
#6 Invest in alternative proteins