Climate finance: Funding sustainable food systems transformation

The chapter addresses the crucial need to transform food systems to meet the global goals related to climate change mitigation, adaptation and resilience set out in the Paris Agreement. Six main relevant funding streams are identified: consumer spending, sales by food system operators, international development flows, public budgets, banking systems and capital markets. The report notes that sufficient potential financial resources exist in aggregate to finance the necessary transformation, but the right incentives need to be created to mobilise these funds. Key recommendations include: establishing effective incentive frameworks, such as legislating net-zero emissions targets and pricing climate externalities; steering consumption- and production-related financial flows into food value chains; strategically using international development funds to leverage private capital; improving the allocation of national public budgets, especially towards research and innovation; steering banking systems and capital markets towards climate-positive operations; and ensuring that financing supports inclusive transformation.