The globe’s current food systems are responsible for roughly one third of greenhouse gas emissions, as well as are one of the main causes of biodiversity loss1 and nearly 80% of global deforestation. To mitigate climate change, these emissions need to reach net zero by 2050. At the same time, global population is projected to increase by nearly 20% by 2050, increasing food demand and agriculture production. To make these numbers work, the current food systems need to be transformed to produce healthier and more sustainable food, while advancing climate-smart practices by supporting farmers in developing countries to adapt to climate change.
In response to the annually needed USD 350bn to transform food systems2 as well as investor interest, this investment solution aims to provide long-term financing to innovative agribusinesses in Asia Pacific, Latin America and Africa with the goal of mitigating climate change, reducing food loss and promoting climate change resilience in their value chains.
Investor interest for such a solution is clearly reflected by the additional capital raised from public and private sector investors. These commitments are part of a blended finance structure and aim at providing long-term expansion debt and technical assistance to growing agribusinesses.
IFU has committed USD 15 million
IFU has committed USD 15 million to the fund through Denmark’s Green Future Fund.
“Climate Smart Food Systems Fund is a perfect match with our impact ambition to create green, just and inclusive societies and therefore we are pleased to commit USD 15m to the new fund. And we are looking forward to seeing responsAbility as fund manager promote and finance agribusiness solutions that can meet future food demands in a sustainable and climate resilient manner.”
Otto Vinther Christensen, Senior Vice President and Head of Sustainable Food Systems at IFU.
Several investors on board
The new fund will be managed by responsAbility being a leading impact asset manager specializing in private market investments across three investment themes to directly contribute to the United Nations Sustainable Development Goals (SDGs).
“Business as usual is no longer possible as emissions from the global food system alone could raise global temperatures by 1.5°C by 2050 and climate change puts the global food security at risk. Therefore, it is an absolute priority to transition to low-carbon and climate-resilient food systems. We have an opportunity to showcase that there are investable projects in this grossly unfunded space, leveraging responsAbility’s experience of 20 years in this sector. We are excited to partner with a group of forward-thinking public and private investors for this and are thankful for their confidence in us.”
Suhasini Singh, Head of Sustainable Food Debt at responsAbility.
Investors in the new fund are several private and public investors including Global Affairs Canada, FMO, Calvert Impact capital, Bank of America, Ceniarth, KfW, DFC and CGIAR. In total the investors have committed USD 106 million.
About responsAbility Investments AG responsAbility Investments AG is a leading impact asset manager specializing in private market investments across three investment themes to directly contribute to the United Nations Sustainable Development Goals (SDGs): Financial Inclusion, to finance the growth of Micro & SMEs; Climate Finance, to contribute to a net zero pathway; and Sustainable Food, to sustainably feed an ever-growing population. All responsAbility investment solutions target specific measurable impact alongside market returns. Since its inception in 2003, responsAbility has deployed over USD 13 billion in impact investments. With over 200 employees collaborating across seven offices, as of 1 March 2023 the company manages USD 4.8 billion in assets across approximately 280 portfolio companies in 74 countries. Since 2022 responsAbility is part of M&G plc, the international savings, and investments business, and contributes to enhancing M&G’s capabilities in impact investing.
1UN land report: Five key takeaways for climate change, food systems and nature loss – Carbon Brief 2Why financing the transformation of our food systems to nature positive production is critical before 2030 | UNEP – UN Environment Programme