Sustainable Finance for the Transformation of Food Systems

Development finance actors and the private sector will need to work cohesively to reduce the funding gap, reorient current financing, and increase capital resources for food-system transformation. Utilising innovative financing instruments and mechanisms, such as blended finance structures, to create attractive investment opportunities can catalyse food-system transformation through both public and private sector capital. Building the capacity of financial intermediaries to accurately assess risk and deploy appropriate risk-mitigation mechanisms can improve risk perception and lower the transaction cost for deploying capital. Robust, science-based metrics, cost-effective data collection, and monitoring systems are critical to mobilising capital and safeguarding sustainable finance against ‘greenwashing’, engaging in behaviour or activities that make people believe a company is doing more to protect the environment than it really is.