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Shaping Finance in Transitioning to a Sustainable Food System



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The global food system would be insolvent if the costs of its negative impacts were priced in, writes Simon Zadek

The global food system would be insolvent if it was a business or country where the polluter pays. Its annual economic value of about $8 trillion would be overwhelmed by the internalized costs of its negative impacts, estimated by the World Bank to be $12 trillion annually.

Today’s global food system delivers industrial scale, cheap food to billions, and has remained largely intact in the face of the recent pandemic. At the same time, it is in a vicious spiral that threatens food security and livelihoods, and ultimately much more.

It is a major contributor to climate change as well as being increasingly battered by our changing climate. It draws on nature in producing cheap food, and in so doing is the single biggest cause of biodiversity loss that is undermining our capacity to produce food and sustain viable economies. It is the livelihood source for hundreds of millions of people, but offers, in the main, low quality, low paid jobs. And whilst delivering cheap food stacked high, it fails in its ultimate purpose of delivering affordable nutrition to all.

Love it or hate it, today’s food system is fundamentally unviable. It has to transition; the challenge is how, and to what, and how best to manage the transition risks along the way.

We all agree, for example, that we should internalize nature-related risks in financial decision making, the raison d’etre of Finance for Biodiversity (F4B). Yet although we need such moves to shift investments towards the food system we want, to do so too quickly and without mitigating associated risks could lead to widespread bankruptcy, devastate rural employment, and drive up food prices, poverty, and inequality.

Like the clean energy revolution, we need to ensure a rapid, fair and sustainable transition of the food system to one that is climate-, nature- and people-friendly, delivering affordable nutrition for all. The clean energy transition has been a bumpy ride but the food system transition is more complex and more risky by an order of magnitude.

“Today’s food system is fundamentally unviable. It has to transition; the challenge is how, and to what”

Perhaps not surprising, then, that there are so many counter-productive public disputes in the lead up to the forthcoming UN Food Systems Summit later this month.

Regenerative farming advocates, for example, are primarily opposed to soilless food production e.g. lab-grown ‘alternative protein’ and vertical farming. Yet regenerative farming is in practice difficult to scale rapidly, and the most recent scientific research casts doubt on its potential for soil-based carbon sequestration. Soilless systems will therefore have to be a major part of the solution, offering up to 95% reduction in water use, dramatic reductions in emissions and the potential for delivering cheap, healthy food at scale.

Indeed, regenerative and soilless farming can be complementary. Alternative protein growth, for example, is likely to lead to the release of land for repurposed use, probably more cheaply, whilst regenerative farming can be a source of ingredients for vegetable-based alternative protein.

By far the biggest dispute, however, is about the role and impact of private capital, the focus of F4B’s most recent report ‘Getting the Financialisation of Food Right – Financing the Transition to a Sustainable Food System‘.

There is little doubt that the food system is increasingly financialised, that is, being shaped by the logic of risk-adjusted financial returns. Just 10 companies own half of the world’s seed market; four agribusiness companies control 90% of the global grain trade; and 65% of farmland is owned by 1% of farming businesses. Agribusiness is the US’s second most profitable sector, made possible by leaving others to pay for environmental and health costs, and by being the recipients of considerable government subsidies.

“The clean energy transition has been a bumpy ride but the food system transition is more complex and more risky by an order of magnitude”

As a community dedicated to sustainable finance, we need to face the facts that financialisation can be a major driver of the food system’s negative impacts and unpaid-for costs. Much of today’s core, commercial food system is at least complicit in:

  • Concentrating the unequal distribution of economic benefits, squeezing rural incomes of increasingly dependent small farmers and communities.
  • Delivering an under-supply of healthy, affordable food, an over-supply of salt, sugar, fat, and carbohydrates.
  • Supporting lobbying that externalises public health costs, maintains perverse agricultural subsidies, and ensures that nature and climate costs do not diminish financial bottom lines.

Set against this harsh view is that we still require private capital to invest in the food system we need. In fact, it is inconceivable that we can effectively manage the inevitable transition without tapping global financial markets at scale.

F4B’s report, prepared in association with the Food System Economics Commission (FSEC), is an attempt to get beyond two false views about finance: one that we can do without private capital in transitioning to the food system we need, and the second that we have to accept private capital on any terms.

“Now is the time to apply more broadly what we have learnt in reshaping our global food system to ensure a rapid, fair, and sustainable transition”

We can learn from the last decade’s efforts in better aligning global finance with the clean energy revolution. We have made advances in shaping global finance to deliver a low-carbon future, through improved risk pricing and financial regulation, shifts in central bank behaviour, through extraordinary financial innovation, and increasingly through shareholder and citizen action in demanding values and impact alignment in financing and corporate behaviour.

Drawing on this experience, F4B’s report sets out an agenda for shaping global finance in ways that deliver investments in the transition to an inclusive, healthy, sustainable food system, highlighting four clusters of possible actions.

  1. Financial policies and regulation – reinforced by shareholder and public activism – must drive the inclusion of nature and climate impacts into financing decisions, stranding dirty assets and accelerating green-friendly investments, triggering a shift towards more nutritious food production.
  2. Financial innovation needs to accelerate investments in, and drive down costs of, healthy food produced by climate- and nature-friendly forms of farming. We need an equivalent to the feed-in tariffs that were used to great effect in catalysing renewables investments, rapidly bringing down costs to affordable levels.
  3. Policy and public finance are needed most of all to protect and retool those whose rural livelihoods, food security and economic strengths are eroded during the transition, by the provision of technology, skill development and capital to enable them to own and operate commercially viable regenerative and soilless food production.
  4. We need to support citizen action as the ultimate owners and intended beneficiaries of much of the world’s financial assets and flows, in demanding that their money is used to deliver the food system they need, harnessing digital opportunities to empower and nudge them, as consumers of food, savers, pension policy holders and voting tax-payers.

This agenda should be familiar to us all, made up of instruments and actors that have underpinned our collective efforts in shaping finance to support the many facets of sustainable development. Now is the time to apply more broadly what we have learnt in reshaping our global food system to ensure a rapid, fair, and sustainable transition.

Dr Simon Zadek is the chair of Finance for Biodiversity.

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Sweet Sorghum offers Solutions in Drought-hit Southern Africa




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By Hamond Motsi

The southern African region is battling with drought at present. This is the result of El Niño, a natural climate cycle characterised by changes in Pacific Ocean temperatures. It has effects on global weather patterns, particularly rainfall and temperature.

The drought has hit the region’s agricultural productivity hard. MalawiZambia and Zimbabwe have declared a state of disaster with respect to their current agricultural outputs. They are seeking humanitarian assistance in the form of food aid to feed their people. The downturn also has economic implications, since over 70% of people residing in the region’s rural areas rely on agriculture for their livelihoods.

The dire situation underscores how important it is for the agricultural sector to prevent, avoid or prepare for the impacts of climate change, which will also bring extremes of weather.

One measure the sector can take is to cultivate biofuel crops. These are crops rich in starch, sugar or oils that can be converted into bioethanol directly or through a fermentation process. Bioethanol, a type of ethanol produced from biological or plant based sources, emits fewer greenhouse gases compared to fossil fuels like petroleum, natural gas and coal. Commonly used biofuel crops include sugarcane, maize, grain sorghum, sugar beet, rapeseeds and sunflower.

These conventional biofuel crops do have drawbacks, however. They are highly susceptible to extreme weather events. They require high upfront investment for fertilisers, chemicals and irrigation. And they compete with food production – if they’re grown as biofuels they can’t also be used as food because of how they have to be processed.

So, researchers are always on the lookout for crops that might be good biofuels without those problems. Sweet sorghum, which is indigenous to the African continent, is one such crop. Unlike the better-known sorghum, it has sweet juice in its stems. In a recent study, I reviewed scientific literature to analyse the potential significance of sweet sorghum to African farmers because of its multipurpose nature and ability to adapt under harsh climatic conditions.

Multiple uses

Sweet sorghum has many uses. It can produce grains, animal feed and sugary juice, making it unique among crops. The grains from sweet sorghum are prepared as steamed bread or porridge malt for traditional beer, as well as in commercial beer production across the continent.

They’re nutritionally rich, with high energy values (342 calories/100 g), proteins (10g/100 grains), carbohydrates (72.7g/100 grains), and fibre (2.2g/100 grains) as well as essential minerals such as potassium (44mg/100 grains), calcium (22mg/100 grains), sodium (8mg/100 grains) and iron (3.8mg/100 grains).

The nutritional value of maize is fairly similar: proteins (8.84g/100 grains), carbohydrates (71.88g/100 grains), fibre (2.1g/100 grains), potassium (286mg/100 grains), calcium (10mg/100 grains), sodium (15.9mg/100 grains) and iron (2.3mg/100 grains).

What sets sweet sorghum apart from a crop like maize is that it’s also resilient in arid climates and has multiple other uses. For instance, it produces a lot of plant material (biomass) as it grows, which is left over after harvest. That’s why it’s useful as animal feed too.

Animal feed is made from what remains once the sweet sorghum crop has been harvested and its grains and stem juice stripped off. The residue is high in nutritional content, which can improve the quality of diets of animals, including cattle. The grains can also be used for animal feed.

The sweet juice in the crop’s stalks is what’s used to create bioethanol. Sweet sorghum contains sucrose, glucose and fructose, which are essential for bioethanol production. Of the conventional biofuel crops I’ve mentioned, only sugarcane yields more ethanol. Studies in the United States have shown that sweet sorghum far outstrips maize when it comes to bioethanol production: it yields 8,102 litres per hectare planted, while maize yields just 4,209 litres per hectare.


Perhaps most importantly given the southern African region’s current drought struggles, sweet sorghum is well-suited for cultivation in the sorts of adverse conditions that are typically challenging for conventional biofuel crops.

One of the key characteristics of sweet sorghum varieties is their drought resistance. It allows them to enter a dormant state during extended periods of dryness and resume growth afterwards. Research has shown that, under intense water scarcity conditions, sweet sorghum makes use of its stalk juice to supplement its plant needs.

Sweet sorghum’s ability to withstand low water and nitrogen inputs, as well as its tolerance for salinity and drought stress, makes it an ideal crop for farmers in arid regions. This is why it’s widely used in other parts of the world, including the USBrazil and China.

Investing in sweet sorghum

The continent’s current agriculture value chain is dominated by major crops like maize, wheat and rice, which all originate from outside Africa. Not enough attention is given to crops of African origin, like sweet sorghum, even though it is a multipurpose, hardy crop with great potential for farmers. People are more familiar with sorghum, not the sweet variety, and it is also under-researched.

Governments should be using their agriculture extension services to raise awareness among farmers and consumers about the benefits and practical applications of sweet sorghum in people’s diets.

Developing recipes and secondary or industrial products can enhance the feasibility and awareness of sweet sorghum farming. By investing in research and development, the full potential of sweet sorghum cultivation can be unlocked through governments and the private sector.

Hamond Motsi is a PhD Student in Agriscience, Stellenbosch University

Courtesy: The Conversation

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Lithium Boom: Zimbabwe Looks to China to Secure a Place in the EV Battery Supply Chain




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Chinese investors have flocked to Zimbabwe to secure lithium supplies, promising local development. But analysts warn Zimbabwe needs more robust governance for communities to reap the benefits. Reports Andrew Mambondiyani

Wonder Mushove stared blankly at plumes of red dust billowing into the sky as more than 30 trucks carrying loads of lithium ore rumbled past his newly-built house in Buhera, in eastern Zimbabwe.

The trucks drive by Mukwasi village on the dirt road linking the Chinese-owned Sabi Star lithium mine to the tarred highway. They travel through the border town of Mutare to the port of Beira in neighbouring Mozambique. From there, the lithium-containing minerals are loaded onto ships and exported to China – the world’s largest manufacturer of lithium-ion batteries.

The dust hung in the air after the trucks’ passage. Mushove and his family were among dozens of households displaced by the $130million-mining project, which began operating in May. They were relocated to new houses built by the mining company about a kilometre from their old homes.

And yet, Mushove is hopeful the mine could “uplift the area and put it on the world map,” he told Climate Home News. For decades, the vast, hard-rock lithium deposits buried under his home were of little interest to foreign investors. Now, Chinese companies are paying a high price to access Zimbabwe’s reserves – the largest in Africa and among the largest in the world.

A lightweight metal with the ability to store lots of energy, lithium is critical for the manufacture of batteries for electric cars. Global efforts to move away from combustion-engine vehicles have pushed demand for the silvery metal, also known as “white gold”, to soar.

Chinese companies have flocked to Zimbabwe’s untapped reserves of high-grade lithium to shore up the country’s supplies, benefiting from the Southern African nation’s cheap labour and deregulated mining sector. In the past two years, Chinese companies invested over $1.4 billion acquiring lithium projects in Zimbabwe.

And more money is on its way. Last year, Chinese companies were awarded licenses that could see $2.79 billion in investment flow into the country, mostly in the mining and energy sectors. These investments could turn Zimbabwe into a key player in the global lithium-ion battery supply chain. Chinese battery manufacturing giant BYD could source some of its lithium from Zimbabwe, after buying a stake in the Chinese owners of the Sabi Star mine.

But Zimbabwe’s poor progress on establishing robust resource governance threatens to keep communities like Mushove’s from seeing any of the benefits, analysts told Climate Home.

While endowed with vast mineral wealth, Zimbabwe has so far failed to turn its underground riches, including diamonds and gold, into revenues for development. Regulatory gapshuman rights abusesillegal trade, and alleged corruption have all been barriers.

recent investigation by NGO Global Witness in Zimbabwe, Namibia, and the Democratic Republic of Congo found that there is a danger of history repeating itself with lithium mining without rigorous screening for corruption and social and environmental harms.

But Zimbabwe’s president Emmerson Mnangagwa is betting on the lithium rush to catapult the country into an upper-middle-income economy by 2030. To achieve this, Mnangagwa aspires to turn Zimbabwe into a battery manufacturing hub.

China’s lithium rush

China towers over the lithium-ion battery supply chain. But its own lithium resources are limited and it has sought to secure access to deposits overseas.

Isolated by the West and slapped with 20 years of sanctions because of human rights violations, Zimbabwe has turned towards China, now the country’s largest foreign investor.

Since the 1950s, China’s foreign policy has been guided by “five principles of peaceful co-existence“, including a commitment not to interfere in another country’s internal affairs. This principle, which encapsulates China’s approach, has set it apart from western investors.

Zimbabwe’s “opacity and disregard for human rights has made it cheap for the Chinese to exploit minerals” in the country, said James Mupfumi, director of the Centre for Research and Development, a local NGO advocating for accountability in the natural resource sector.

Zimbabwean law vests all mineral rights to the president. With no requirements to disclose the beneficial owners of mining projects, “there is no due diligence and parliamentary oversight on Chinese investments,” Mupfumi explained.

“Above all, Zimbabwe requires a government that prioritises public accountability of mineral wealth, not the self-enrichment of a few political elites,” he added.

The ministry of mines did not respond to a request for comment.

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EARTH DAY 2024: Packaging Is the Biggest Driver of Global Plastics Use




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By ,

Earth Day, celebrated annually on April 22, marks a global commitment to environmental protection and sustainability. The first Earth Day took place in 1970, ignited by U.S. Senator Gaylord Nelson of Wisconsin, who aimed to raise awareness about environmental issues and mobilize action to address them. Since then, Earth Day has evolved into a worldwide movement, engaging millions of people across the globe in activities such as tree planting, clean-up campaigns and advocacy for environmental policies. Its organizer is EARTHDAY.ORG, a non-profit organization dedicated to promoting environmental conservation and mobilizing communities to take action for a healthier planet.

The theme of this year’s Earth Day is “Planet vs. Plastics” – a theme chosen to raise awareness of the damage done by plastic to humans, animals and the planet and to promote policies aiming to reduce global plastic production by 60 percent by 2040.

As our chart shows, global plastics use has increased rapidly over the past few decades, growing 250 percent since 1990 to reach 460 million tonnes in 2019, according to the OECD’s Global Plastics Outlook, which projects another 67-percent increase in global plastics use by 2040 and for the world’s annual plastic use to exceed one billion tonnes by 2052. As our chart shows, packaging is the largest driver of global plastics use, which is why a rapid phasing out of all single use plastics by 2030 is one of the policy measures proposed under EARTHDAY.ORG’s 60X40 framework.

Other major applications of plastics include building and construction, transportation as well as textiles, with the fast fashion industry particularly guilty of adding to the world’s plastic footprint. “The fast fashion industry annually produces over 100 billion garments,” the Earth Day organizers write. “Overproduction and overconsumption have transformed the industry, leading to the disposability of fashion. People now buy 60 percent more clothing than 15 years ago, but each item is kept for only half as long.” Most importantly, the organization points out that 85 percent of disposed garments end up in landfills or incinerators, while just 1 percent are being recycled.

  1. Infographic: Packaging Is the Biggest Driver of Global Plastics Use | Statista

Felix Richter is a Data Journalist

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