Financial think tank Planet Tracker announced a new "groundbreaking" Roadmap for Financial Institutions (FIs), as it calls for the urgent transformation of global food systems, which could cut global emissions by 20% and deliver more than $1.5 trillion in economic benefits.
Planet Tracker’s new report "Financial Markets Roadmap for Transforming the Global Food System" captures data from 400,000 companies across 160 countries in land use and aquaculture, including such companies as Nestlé, McDonalds and Walmart. The company claims the estimated annual global investment to achieve "world-altering results" is just $300-350 billion—equivalent to 4% of the $8.6 trillion of current investment, according to the report.
Planet Tracker’s Roadmap provides a "Four Transformation Themes" strategic framework for FIs to guide their capital allocation and engagement with food companies and outlines six priority actions that if implemented would wipe out approximately 10 gigatonnes of CO2e—equivalent to double current US annual emissions—by 2030.
This would reduce the current global food system footprint, 17.9 GtCO2e, by 60% and humanity’s overall greenhouse gas emissions by a fifth, the organization says.
The roadmap focuses on the role of private financial flows into the food system and is designed to help investors focus their strategic allocation, engagement and stewardship activity. It includes an analysis of the harms arising from the current food system and the trajectory it will take if a business-as-usual approach continues to be funded by private finance.
The roadmap includes actions for FIs to do themselves, and what they should require of their investments.
Peter Elwin, director of fixed income & head of food and land use programme at Planet Tracker, says, "The global food system generates nearly 20% of the world’s GDP, however it is inherently fragile and no longer fit for purpose. From conception in the farm to consumption on the fork, the global food system accounts for a third of greenhouse gas emissions and endangers 86% of species on the IUCN Red List. Even as food reaches the end of the chain, one third is lost or wasted.
“Unless the global food system is transformed, none of the global targets, pledges and ambitions that have been agreed in recent years with respect to people, planet and climate will be achieved. Financial institutions providing debt and equity finance have an outsize opportunity to influence systemic change.
“From halving food waste to stopping deforestation, six steps by investors could take 60% of food’s emissions off the table.”
The priority actions sit within a framework of four transformation themes, which aim to help financial institutions configure investment and engagement processes to ensure capital allocation in support of transformation and mitigate future associated risks. Along with responsible supply chains, other themes encourage increasing food system (true cost) efficiency, developing sustainable product offerings and reducing food system pollution.
The analysis of the relationship between finance and the food systems’ planetary footprint emphasizes that while many of the harms in the food system occur at food production level, the demand that drives them is generated further downstream at the retail and service end of the supply chain, where finance tends to focus. These actors and their funders therefore have a critical role in reducing systemic harms, with responsible supply chains an integral part of the framework.
Six Priority Actions for 2030
Planet Tracker provides six priority actions for financial institutions to significantly reduce the harms generated by the current food system. Before 2030, Planet Tracker calls on financial institutions to:
- Require fully traceable supply chains: with a particular responsibility for investors and banks funding companies toward the downstream end of the supply chain (manufacturers, retailers and service companies)
- Halve food loss and waste: by engaging with companies to reduce losses through the production process and waste at the retail and consumer end while maximizing efforts to reuse food that is not fit for consumption for other purposes
- Stop funding deforestation: by implementing policies including publicly committing to ensuring zero deforestation risk in portfolios and targeting deforestation-linked emissions in net-zero plans
- Cut agri-methane emissions by 45%: through allocating capital away from industrial animal protein production toward alternative protein producers, increasing disclosure around methane emissions and engaging with investees to ensure producers are aligned with the Global Methane Pledge
- Encourage regenerative agricultural systems: through activities such as engaging investee companies to adopt regenerative techniques and establishing strong due diligence processes to ensure regenerative practices are genuine
- Invest in alternative proteins: by engaging with governments to ensure regulatory frameworks encourage the development of alternative proteins and with investee companies to set time-framed targets for shifting away from industrial meat and
The Executive Summary can be downloaded here.