Even if fossil fuel emissions were stopped today, emissions from the global food system alone could raise global temperatures by more than 1.5°C.1 At the UN Food Systems Summit +2 Stocktaking Moment, UN Secretary-General António Guterres highlighted that our broken global food systems are not inevitable. He emphasised the urgent need for swift and robust actions to address the pressing climate crisis by building resilience and adopting practices and technologies for the sustainable use of resources, including land, biodiversity, and water in food production.
There at last appears to be a growing recognition that the world cannot afford to delay any longer taking action to jointly address all the factors contributing to global warming. The first Agriculture Day hosted by the COP Presidency took place last year and Food and Agriculture featured in the final COP27 cover text. This year’s COP28 in Dubai will, for the first time, have a day dedicated to agrifood systems and have committed to making this a key topic.
The Kunming-Montreal Global Biodiversity Framework (GBF), signed by 196 nations in December 2022, was established to “take urgent action to halt and reverse biodiversity loss” by 2030, thus a GBF fund was established aimed at increasing investment in nature restoration and renewal. In line with the GBF initiative, FAIRR urged the G20 finance ministers to align their agricultural subsidies with climate and nature goals. One of FAIRR’s calls to action at COP28 is to address the material financial risks posed by intensive agriculture’s significant contribution to climate change.
Following the call to action from FAIRR’s investor members, with combined assets of USD $18 trillion, at COP27 in November 2022, the UN Food and Agriculture Organization (FAO) committed to producing a Global Roadmap to limit the rise to 1.5°C by 2050 for the agriculture and land use sector in time for COP28 in December 2023. A roadmap with key milestones will help investors mitigate financial risks, align their portfolios and engage with companies to ensure long-term value. Another expectation for COP28 is that the roadmap will contain science-based targets and deadlines for reducing food-system methane missions, halting the loss of biodiversity and enabling healthy diets and sustainable food systems for the world.
Nature-based solutions will be crucial to making headway in tackling climate change. The growing realisation of this within the investment community was evident at September’s Climate Week NYC and at the Principles for Responsible Investment (PRI) In Person conference held the following month in Tokyo. For example, both events featured numerous panels and side-events focused on nature and biodiversity, indicating that nature is becoming the next mainstream theme. Conversations with investors at Climate Week NYC revealed an increasing recognition that, when the global food system is responsible for 1/3 of total emissions, decarbonising sectors such as oil and gas and transport alone will not be enough to achieve the goal of limiting global warming to 1.5°C.
The NYC conference saw the launch of the Taskforce on Nature-Related Financial Disclosures’ (TNFD) recommendations intended to get capital flowing into halting nature destruction by establishing a link between nature risk and financial, operational and climate risks. The TNDF is key for food and agriculture corporations, given that it provides both companies and investors with a framework to start exploring risks and opportunities in their nature-dependent supply chains. The awareness gained through identifying and locating exposure to nature-related risks is more likely to prompt action in addressing them and capturing the opportunities. At PRI in Person it was clear that more mainstream investors are recognising the inherent links between nature and the bottom-line cost of the climate crisis. The interconnectedness and complexities of climate and nature-related risks in the agrifood sector requires investors to adopt a holistic approach that integrates a just transition.
A key takeaway from the finance and food nexus in both events was the emphasised need for investors to engage with policymakers and regulators to drive outcomes, which may perhaps explain the increased attendance of investors at COP. At COP28, the agri-food sector is finally being acknowledged as crucial in achieving the net zero goal by the policy and investment communities. However, many countries are still failing to establish comprehensive strategies and targets for the agricultural sector within their nationally determined contributions. FAIRR is hopeful that this year’s COP28 in Dubai will build on the progress made at PRI in Person and Climate Week NYC, providing a platform for converting talk into action.
1 Science, the American Association for the Advancement of Science journal, in 2020.