Financing Food Fast: Take-Aways from COP28

By Elysabeth Alfano, CEO, VegTech™ Invest.

 

As I write this, still on the ground in Dubai, I am struck by so many swift moves to bring sustainable food systems change through diversified proteins to the forefront of not just the climate conversation, but the climate strategy and execution conversation.  As I come down from my four speaking engagements in the Blue Zone, I can’t believe the rapid zeitgeist shift. 

Only last year, when I spoke at COP27, I was pushing to be heard, along with dedicated colleges at the Food4Climate, Food Systems pavilions, The Good Food Institute (GFI), Mighty Earth, Food Tank, Farm Animal Investment Risk and Return (FAIRR) and so many others that food systems transition was not only key to the climate change conversation, but that we simply couldn’t hold on to any aspirations of 1.5C without it.  

Fast-forward a year and the world has skipped a beat! Food went from not being noticed to a critical seat at the table for both importance and discussions on key next steps: we must finance food fast.  As someone who has worked in and talked about this solution for almost a decade now, it is surreal to wake up one day - seemingly almost from one day to the next in early December 2023 - and see that a large portion of world leaders and financiers, collectively and in unison, are now focused on financing protein diversification for Climate Change, biodiversity loss and deforestation and food security.  In short, the words on the tips of many tongues at COP28 was blended finance for protein diversification as part of sustainable food systems transformation at all stages of the supply chain. 

Here are the highs of COP28 from the food perspective.

1) Sustainable Food Systems and Protein Diversification. As of writing, 154 countries have pledged to set food-based targets in their next Nationally Determined Contributions (NDCs), marking a level of commitment the food systems community couldn’t have foreseen this time last year at COP27.  NDCs are at the heart of the Paris Agreement and the achievement of its long-term goals. NDCs embody efforts by each country to reduce national emissions and adapt to the impacts of climate change.  They are non-binding.

According to the WWF, negotiations on how much each country will commit will pick up in June 2024. Investing in sustainable food systems transformation utilizing the foundational pillar of diversified proteins through Plant-based Innovation from plants, microbial fermentation and cultivated meat is 3x-40x more impactful at reducing Greenhouse Gas Emissions than investing in other green technologies, according to the Boston Consulting Group. This is primarily due to lower CapEx spending needed, which makes food systems transformation the low hanging fruit, as it were, in impacting Climate Change. 

2) Initial Paths to Implementation. According to associates at the World Resources Institute, more than $2.5 billion worth of financial commitments to support the implementation of the Declaration on Sustainable Agriculture, Resilient Food Systems and Climate Action was announced. This included the UAE and Gates Foundation’s announcement of $200m to support CGIAR research and the new Aim4Scale mechanism, lead by Her Excellency Almheiri and the U.S. Secretary of Agriculture, Tom Vilsak, which will accelerate AgTech for a climate-resilient, food secure and 1.5C world.  

3) Human and Planetary Health.  Health finally became part of the climate discussions with the launch of the COP28 Declaration on Climate and Health, which highlighted the need for sustainable protein diversification away from meat, among other things, for both human and planetary health. This, along with the food declaration noted above, put efficient, sustainable nutrition at the heart of the climate fight.

4) Food Loss and Waste. Food loss and waste, a huge driver in emissions, was highlighted as a key area for philanthropy to “take a big bite out of the climate crisis” thanks to a new roadmap detailing more than $300m in ready-to-fund investments in seven pivotal countries, according to the World Resources Institute.

5) Financing Food Fast. While sustainable food systems transformation including Plant-based Innovation currently receives 2%-4.8% of Climate funding, the food and agriculture system is responsible for 30% of the world's emissions, and animal agriculture is 60% of this.  

According to Geeta Sethi, Subject Matter Expert on Food Systems at the World Bank, $300-$400 billion a year of blended public and private capital is need over the next 10-15 years to shift to sustainable food systems as a matter of urgency for human and planetary health.  She furthered that the external costs of our current food system that are pushed to the consumer in the form of taxes for damages such as eutrophication, health care costs, and environmental damage are a stunning 10% of global GDP, approximately $12.7 trillion.

Courtesy of the United Nations Environment Programme (UNEP)

Take-Aways from COP28 Mahesh Roy of IIGCC, an investor organization focused on Climate Change, noted that capital will flow from the private sector into food transformation as it has into the energy sector. As paraphrased, 'Keep it simple.  Show people the data around the inefficiency of the current food system and they will find the opportunity to make money.  Show them the added benefit of impact and the trillions will flow."  In this manner, and to quote, Dr. Rhian-Mari Thomas, CEO of the Green Finance Institute, "We are at the end of the beginning."   With the world focused on the terror of having pushed through six of the nine planetary boundaries, and having surpassed five of the seven tipping points, the time for contemplation is over.  Focusing on investing in sustainable food systems transformation, which requires lower spending than the energy sector and can have faster results while addressing a significant portion of emissions as well as biodiversity and health concerns, is an impactful investment strategy.  Indeed, sustainable food tech investing – what we call VegTech - is climate impact investing. In closing, from Her Excellency, Mariam Almheiri, The United Arab Emirates Minister for Climate Change and the Environment: “Even if you were able to fix the just energy transition and go completely renewable, you still wouldn’t be able to reach the 1.5 degrees if you don’t solve the food systems issue. That’s how big of a cause this is. Food systems will now be center stage in all future COPs." She also shared the following at one of the ending presentations on stage with the Secretary of Agriculture, Tom Vilsak, her partner in Aim4C.  "We have the bigger issue that Secretary Vilsak and I always think about, day on day, as the population is rising: Will we have enough food? Will we have enough protein for all? So, that’s why technologies and innovations are so good. We need to look at a lot of the alternatives as well; alternatives that are more sustainable, that don’t need so much water, that don’t need so much land and that don’t throw out methane emissions, and that’s why things like alternative proteins are very important." Her panel talk is here.  The United Nations Environment Programme document launched at COP28 on sustainable food systems transformation is here, and the 90 second video is here.

About the Author:

Elysabeth Alfano is the CEO of VegTech™ Invest, the Advisor to the Plant-based Innovation & Climate ETF, EATV and the creator of the non-tracking Plant-based Innovation & Alternative Proteins benchmark index, EATVi.

Elysabeth is an expert in investing in food systems transformation and speaks internationally on the intersection of investing, sustainability, and our global food supply system.  She recently spoke at the U.N. Global Leaders Compact Summit, the United Nations Climate Change Summit, COP27, Yale University and several Bloomberg Intelligence events. 

Elysabeth began her career with Kellogg Company working on Special K and Frosted Mini-Wheats before investing for a small family office. A graduate of Northwestern University and the Thunderbird School of Global Management, Elysabeth consults and advises, through her company Plant Powered Consulting, C-Suite Executives on the sustainable food industry landscape, direction and whitespaces.  

Lastly, Elysabeth hosts the Plantbased Business Hour, a podcast which features the CEOs and business leaders in the industry.  The Plantbased Business Hour is considered “The Gold Standard” for those who want to understand, participate in, and capitalize on the growing Plant-based Innovation sector. She contributes to ESG Clarity, Vegconomist, and FinTechTV on a regular basis. She hosts the Upside & Impact: Investing for Change podcast on the New York Stock Exchange platform ETFCentral.com. Linkedin here.