Abstract
Today’s food systems generate $12 trillion in hidden social, economic and environmental costs. Implementing five “food finance imperatives” would not only reduce these costs but help unlock $4.5 trillion in new business opportunities every year. Mobilising smart capital for a more sustainable food system is key to COVID-19 recovery, job creation, eliminating hunger, protecting nature and tackling climate change. There is no time to lose.
Generated Summary
This document outlines a “Food Finance Architecture” developed by the UN Food Systems Summit’s Finance Lever, aimed at transforming global food systems to be more equitable, sustainable, and resilient. The architecture proposes five core “food finance imperatives” to optimize public spending and mobilize private capital. The focus is on addressing the current food system’s $12 trillion in hidden costs and unlocking $4.5 trillion in new business opportunities annually. This research paper emphasizes the need for a coordinated reform agenda involving countries, businesses, investors, and consumers to achieve the Sustainable Development Goals (SDGs) and tackle global challenges such as hunger, climate change, and nature loss. The paper discusses the importance of finance in driving this transformation, highlighting the need to shift investments away from unsustainable practices and towards models that benefit people, the planet, and the economy.
Key Findings & Statistics
- The current food system generates $12 trillion in hidden social, economic, and environmental costs each year.
- Transforming food systems could eliminate hunger and malnutrition for over 820 million people and halve the disease burden from unhealthy diets, saving $6 trillion in public health costs.
- Economic recovery and prosperity could be driven by creating over 120 million rural jobs.
- Food loss and waste costs the world $1 trillion each year.
- The food system contributes to approximately one-third of the world’s greenhouse gas emissions.
- It uses 70% of blue water.
- The food system has caused 60% of the losses of vertebrate biodiversity since the 1970s.
- Ending hunger by 2030 could cost up to $160 billion per year.
- Addressing the system’s wider global impacts, including keeping global warming below 1.5°C and protecting nature, could cost $300 to $400 billion annually to 2030.
- The top-end $400 billion estimate represents less than 0.5% of global GDP in 2020.
- The value of global assets which were aligned with environmental, social and governance (ESG) principles, broadly defined, hit over $40.5 trillion in 2020.
- In 2019-20, the outstanding stock of green bonds totalled $750 billion; with $170 billion in social bonds.
- Public or government support for agriculture and food amounts to more than $720 billion per year.
- The total economic gains to society could reach $5.7 trillion a year by 2030 and $10.5 trillion a year by 2050.
- New business opportunities – including from tackling food loss, creating new value chains for regenerative agriculture and shifting to healthy diets – are worth an estimated $4.5 trillion a year by 2030.
Other Important Findings
- The “Food Finance Architecture” identifies five core imperatives: Reshape public support and incentives; Integrate environmental, health & social risks into financial decision-making; Scale fit-for-purpose financial products & business models; Secure equitable food systems; and Strengthen food governance & stability.
- The paper emphasizes the need to shift finance away from capital-intensive, environmentally damaging assets and toward regenerative and circular business models.
- The UN Food Systems Summit aims to promote and scale initiatives to deliver on the proposed imperatives.
- Specific action areas within each imperative are highlighted to unlock capital for food system transformation.
- The document presents ideas for collective action, including pledges for ending hunger, targets for nutritious foods, financial commitments for climate and development, support for farmer finance, and initiatives for sustainable supply chains, regenerative models, and deforestation-free finance.
Limitations Noted in the Document
- The document does not explicitly address any limitations or constraints on the success of the proposed initiatives.
- The paper lacks a detailed analysis of the challenges that the financial system will face.
- The document does not consider the political and economic obstacles of implementing the proposed changes.
- The paper does not include any information about the costs of transitioning.
Conclusion
The UN Food Systems Summit represents a critical moment for action in transforming global food systems. The Food Finance Architecture provides a roadmap for mobilizing finance towards more equitable, sustainable, and resilient food systems. By reshaping public support, integrating risks, scaling financial products, securing equitable systems, and strengthening governance, the food system can be transformed. The document highlights the need for a coordinated approach involving governments, businesses, investors, and consumers. The success of the transformation relies on strong leadership and commitment to implement the proposed changes. The paper emphasizes the potential of the new business opportunities to create value for people, the planet, and the economy. The transformation is both urgent and achievable, and is worth the effort. By changing how and what we finance, we can change the world.