Key investors commit blended capital towards transforming the global food system

responsAbility mobilizes USD 106 million for a climate-smart agriculture & food systems strategy from public and private sector impact investors

June 202310 min readSustainable FoodBlended Finance, Impact, ESG, Gender equality, Agriculture, Technical Assistance

Zurich, 20. June 2023 – To advance climate-resilient and more inclusive food systems, Global Affairs Canada, the Dutch Entrepreneurial Development Bank (FMO), the Danish Investment Fund for Developing Countries (IFU), Visa Foundation, Calvert Impact Capital, Bank of America and Ceniarth have committed to a climate-smart food systems investment solution. This private debt strategy was launched by responsAbility in partnership with CGIAR (Consultative Group for International Agricultural Research) and with KfW (Kreditanstalt für Wiederaufbau) as anchor investor and the U.S. International Development Finance Corporation (DFC) as guarantee provider, bringing the total commitment to USD 106 million.

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.

Suhasini Singh, Head of Sustainable Food Debt at responsAbility: “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 responsibility’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.”

The Honourable Harjit S. Sajjan, Minister for International Development at Global Affairs Canada said, “Canada has committed to working with developing countries to support smallholder farmers and food value-chain actors, especially women, to better adapt to climate change, reduce their greenhouse gas emissions, and adopt climate-smart agriculture and food system practices. Our investment of USD 36.8 million to the Climate Smart Food Systems Fund will provide loans and technical assistance for up to 30 agricultural small and medium enterprises to support climate-smart interventions, help them adapt to climate change, and make food systems more resilient to crises. It also aligns with Canada’s International Assistance Innovation Program investment objectives: Market-building for investments, gender equality, and mobilizing public and private finance for the poor.”

Anton Timpers, Agribusiness, Food, and Water Manager at FMO, said: „Climate Smart Agriculture “CSA” is and will remain a key topic for public and private investors as it targets two of the main global challenges: feeding the world’s population and climate change. The intersection of climate action and food security in this Climate Smart Agriculture & Food Systems investment strategy aligns perfectly with FMO’s broader mandate, as we seek to improve the livelihoods of smallholder farmers and their communities.“

“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,” said Otto Vinther Christensen, Senior Vice President and Head of Sustainable Food Systems at Danish Investment Fund for Developing Countries

“Visa Foundation is proud to support the responsAbility Climate and Agriculture Fund in its work towards supporting and investing in gender-diverse small agribusinesses globally,” said Najada Kumbuli, Head of Investments, Visa Foundation. “We believe the Fund’s investments, together with the technical assistance programs, will help create more inclusive, climate-resilient food systems in communities around the world.”

“Calvert Impact is pleased to partner with responsAbility to invest in critical climate smart interventions for food systems globally. We hope that this innovative fund can serve as a template for addressing the financing needs required to create a more productive, sustainable food systems around the world.” – said Daniel Ford, Director, Investments, Calvert Impact

Amy Brusiloff, community development executive at Bank of America, said “Our participation will leverage additional capital to help create a more sustainable food system, reduce greenhouse gas emissions and food waste, and increase economic opportunity for farmers and others in the food distribution sector. We are pleased to help bring climate-smart interventions and technologies to rural farmers, an important aspect in achieving environmental justice.”

“Ceniarth is delighted to expand our partnership by supporting the new, climate-smart food systems fund”, said Stefan Freeman, Head of Investments for Ceniarth. “Together with CGIAR’s insight and expertise, we believe the fund holds potential to deliver meaningful impact and to prove-out the benefits of innovative financing for vulnerable farmers.”

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 14 billion in impact investments. With over 270 employees collaborating across eight offices, as of 1 October 2023 the company manages USD 4.7 billion in assets across approximately 270 portfolio companies in 72 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.

About Global Affairs Canada Global Affairs Canada defines, shapes and advances Canada’s interests and values in a complex global environment. The government department manages diplomatic relations, promotes international trade and provides consular assistance. The department also leads Canada’s international development, humanitarian, peace and security assistance efforts.

About the Dutch Entrepreneurial Development Bank (FMO) FMO is the Dutch entrepreneurial development bank. As a leading impact investor, FMO supports sustainable private sector growth in developing countries and emerging markets by investing in ambitious projects and entrepreneurs. FMO believes that a strong private sector leads to economic and social development and hasa 50+ yearproven track-recordinempowering entrepreneurs to make local economies more inclusive, productive, resilient and sustainable. FMO focuses on three sectors that have high development impact: Agribusiness, Food & Water, Energy, and Financial Institutions. With a total committed portfolio of EUR ~12 billion spanning over 85 countries, FMO is one of the larger bilateral private sector development banks globally.

About Danish Investment Fund for Developing Countries (IFU) IFU – the Investment Fund for Developing Countries is a Danish impact investor contributing to green, just and inclusive societies as well as supporting the Sustainable Development Goals. We provide risk capital to companies operating in developing countries and emerging markets across Africa, Asia, Latin America and parts of Europe. Investments are made on commercial terms in the form of equity, loans and guarantees. IFU has co-invested in over 1,300 companies in more than 100 developing countries and emerging markets. Contracted investments total EUR 31 billion, of which IFU has contributed EUR 3.4 billion. Capital under management is EUR 1.7 billion.

About Calvert Impact Capital Calvert Impact is a global nonprofit investment firm that helps investors and financial professionals invest in solutions that people and the planet need. During its 25+ year history, Calvert Impact has mobilized over $4 billion to build and grow local community and green finance organizations through its flagship Community Investment Note™ and structuring services. Calvert Impact uses its unique position to bring the capital markets and communities closer together.

About Bank of America Bank of America is one of the world’s leading financial institutions, serving individual consumers, small and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 68 million consumer and small business clients with approximately 3,900 retail financial centers, approximately 16,000 ATMs and award-winning digital banking with approximately 56 million verified digital users. Bank of America is a global leader in wealth management, corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 3 million small business households through a suite of innovative, easy-to-use online products and services. The company serves clients through operations across the United States, its territories and approximately 35 countries. Bank of America Corporation stock (NYSE: BAC) is listed on the New York Stock Exchange.

Bank of America has set tangible sustainable finance goals and made measurable progress in mobilizing and scaling capital deployment to help drive social and environmental change. In 2021, Bank of America set a goal to achieve net-zero greenhouse gas emissions in financing activities, operations and supply chain before 2050. As part of the company’s commitment to deploy $1.5 trillion in sustainable finance by 2030, approximately $250 billion was mobilized and deployed aligned with the United Nations Sustainability Development Goals in 2021. For more Bank of America news, including dividend announcements and other important information, register for news email alerts.

About Ceniarth Ceniarth is a single-family office and related private foundation focused on impact-first investing that benefits underserved communities. Through a range of investment activity, we provide capital to enable the deployment of products, services, and support that directly impacts marginalized, primarily rural, populations. We aim to finance enterprises and intermediaries in ways that lead to long term growth and sustained benefits to communities. We fund non-profits, for-profits, and hybrid organizations.

About KfW KfW is Germany’s public promotional bank. As part of KfW Group, KfW Development Bank has been helping the German Federal Government to achieve its goals in development policy and international development cooperation for more than 50 years. We are both an experienced bank and a development institution with financing expertise, with expert knowledge of development policy and many years of national and international experience. On behalf of the German Federal Government, and primarily the Federal Ministry for Economic Cooperation and Development (BMZ), we finance and support programmes and projects in developing countries and emerging economies – from their conception and execution to monitoring their success. Our goal is to help our partner countries fight poverty, maintain peace, protect both the environment and the climate and shape globalisation in an appropriate way.

About DFC U.S. International Development Finance Corporation (DFC) partners with the private sector to finance solutions to the most critical challenges facing the developing world today. We invest across sectors including energy, healthcare, critical infrastructure, and technology. DFC also provides financing for small businesses and women entrepreneurs in order to create jobs in emerging markets. DFC investments adhere to high standards and respect the environment, human rights, and worker rights.

About CGIAR The CGIAR is a global research partnership for a food secure future dedicated to reducing poverty, enhancing food and nutrition security, and improving natural resources. CGIAR has experience and knowledge spanning 50 years, built on a track-record of continuous innovation and world class research. The Alliance of Bioversity and CIAT, a member of the CGIAR, delivers research-based solutions that harness agricultural biodiversity and sustainably transform food systems to improve people’s lives. The Alliance’s solutions address the global crises of malnutrition, climate change, biodiversity loss, and environmental degradation.

Contact

Richard Rogers
responsAbility Investments
+41 44 403 2151
media@responsability.com

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