09 September 2021
Environmental Finance's Forestry, agriculture and sustainable land use briefing afternoon included a half-day of presentations, a panel, and a live discussion group. It was the fourth in a series of thematic briefing afternoons that Environmental Finance is running throughout the year on the topic of Natural Capital Investment.
The event opened with keynote interview with Simon Zadek, chair for Finance for Biodiversity, who considered the impact of the food industry on nature and climate and how private finance can support the transition to a low-carbon food system.
He said the food transition shares echoes with the early stages of the energy transition, particularly as pressure mounts on the financial community to support the transition. This mobilisation can be seen in development of initiatives such as Nature Action 100 and Ceres Food Emissions 50, he said.
He added the transition to a sustainable, global food system will bring significant disruption. He cautioned that investors and policy makers will have to manage unintended consequences as climate and nature risk is priced into food systems.
"Food security problems, price escalation, price spiking, bankruptcy and reduced nutritional outcomes...these are all possible effects of disruption caused by [private finance] pushing nature and climate risk [awareness]," he said.
He also outlined the risk of "an equivalent for stranded assets". He highlighted the potential for falling land asset values as a result.
Zadek added that Finance for Biodiversity will publish a set of scenarios next month on the cascade effects of alt-protein and vertical farming on land prices and commodity markets.
Later in the day, a panel on Investment strategies to support sustainable land use considered the best funding and investment opportunities for mobilising capital towards sustainable land use and agriculture.
Speaking on the panel, Santiago Cortes, head of ESG at Amerra Capital, said: "Our approach is active management – from both a debt or equity perspective". He said an active approach was needed "in order to be able to influence change".
Referring to the impact focused lending Clarmondial does for small and medium-sized enterprises (SMEs) in emerging markets, Tanja Havemann, co-founder and director of Clarmondial, said: "all types of funding are required" in emerging markets and warned that the funding gap is growing on the credit side, as a result of the economic fallout of Covid-19.
She added: "We think [lending] is an easier entry point than equity and long-term financing for more risk adverse investors at the moment"
Additional discussions from the day included panels on Global forestry investment opportunities for ESG investors and The rapid evolution of voluntary carbon markets, with case studies on Biodiversity as an Investment in Forestry, Attracting private investment in positive land use change and Climate smart food system investments.
To watch these sessions on demand, click below.