CASA 4×4: Asian Agriculture Climate Finance Summit 2021, co-driven by investor panellists

CASA EVENT

CASA 4×4: Asian Agriculture Climate Finance Summit 2021, co-driven by investor panellists

 
This CASA 4×4 featured key investors who participated in the CASA and Grow Asia-organized Asian Agriculture Climate Finance Summit 2021 on 17 November 2021.
 
The summit was an action-orientated opportunity for innovators, investors and policymakers to come together to explore issues impacting climate investment.
 
The main challenge facing the sector is the small amount of global climate finance is directed towards sustainable agriculture, and private finance in the sector remains stubbornly low. The vast majority of finance remains directed at climate mitigation, particularly in sustainable energy technologies, rather than supporting enterprises and people adapt to the effects of climate change. But there are real opportunities, with new technologies backed by sustainable business models, starting to emerge.
 
In this 4×4, expert panellists from the summit shared their insights on the following four key thematic issues:
 
Mobilizing $100 Billion of climate finance
• Jonny Casey, CABI
• Cedric Rimaud, the Climate Bonds Initiative
 
Working towards Net Zero
• Jonny Casey, CABI
• John Friedman, AgFunder
• Mat Hague, CASA
 
Nature-based solutions
• Jonny Casey, CABI
• Sami Khan, CDC Group
• Shailendra Mishra, Nanyang Technological University, Singapore
 
Improving agricultural resilience
• Jonny Casey, CABI
• Shuyin Tang, Patamar Capital
 
Click here to learn more about the Asian Agriculture Climate Finance Summit 2021.


This CASA 4×4 is driven by feedback from the investor panels at the Asian Agricultural Climate Finance Summit held in November 2021, a collaboration between CASA and Grow Asia. We are grateful to our champions who shared their thinking in four areas:

Mobilizing $100 billion climate finance

  • A trillion dollars of green bonds will be issued in 2022, however, agriculture remains an insignificant beneficiary of this capital. Whilst issuing bonds to smallholder farmers is clearly impractical, targeting agricultural banks to lend to SMEs and smaller stakeholders, is a possible solution.
  • Securitization could crowd in private capital, creating pools of projects deploying similar technologies or geographies.
  • Concessional capital would de-risk the pool of investment and due diligence by the DFIs reassure private investors.
  • Effective reach can be delivered in partnership with market leaders, such as irrigation company Netafim, to issue bonds to deploy their products at scale. This requires business model innovations such as a subscription model or convenient financing for farmers.
  • Data should support the non-financial climate benefit aspects of investments.

Working towards Net Zero

  • There needs to be a clearer Net Zero narrative to investors to be able to answer questions about their contribution.
  • New taxonomies that strengthen non-financial reporting are a step in the right direction but need to be supported by greater investor education to move climate investment concepts from impact investors into mainstream investment portfolios.
  • The evidence needs to be improved to justify investments and solidify the existing nascent carbon markets to crowd in capital. As businesses scale, more robust toolkits and methodologies would be required to quantify emissions.
  • Investors identify immediate investment opportunities in novel foods and feeds and cold chain storage to reduce waste. In the longer term, reusing and recycling products will be commonplace in all value chains, not just in agri-food systems.

Nature-based solutions

  • Clarity is needed around what encompasses investable nature-based agriculture.
  • Improved measurement techniques should capture what is happening as nature-based solutions scale (e.g. how to account for belowground biodiversity).
  • Investors saw a role for CASA and Grow Asia to coordinate data collection and create options investors could consider.
  • Fund managers could collaborate to coalesce thinking on credible climate indicators and an evidence base to move the narrative into mainstream investments.
  • Large European retailers will increasingly demand actions to reflect consumer pressure for improved environmental stewardship & ethical sourcing – aligned to improved smallholder productivity.
  • The investment case may have to be adapted to the Asian context and bespoke implementation is required.
  • It is likely to remain difficult to raise finance for smallholder projects. However, there are opportunities to align funds for conservation and private capital for nature-based solutions.

Improving agricultural resilience

  • Investors need improved narratives and datasets outlining climate-smart investment opportunities. Currently, perception may over-inflate the risks – hampering investment in the sector.
  • Building resilience and adaptive capacity avoids business interruption from climate shocks and stresses.
  • Adaptation benefits occur over longer periods and are not always directly to investors, meaning incentives need to be further explored. Endowment, permanent or open-ended capital vehicles would recognise the long-term nature of the challenge better than Closed-End Funds.
  • Funding models need to support operational maintenance for farmers and other essential areas.
  • Blended finance structures should be explored to catalyze more investment into agri-SMEs and companies reaching smallholder farmers.
  • Many investments will require additional costs to be passed on to consumers. As with Fair Trade and organics, there is a need to apply a climate lens too.
  • Technical assistance is important at farmer and enterprise level especially in risk mitigation.

SPEAKERS

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DOWNLOADS

Here you can see the list of downloads for the event (click to download)


Private finance investment opportunities in climate-smart agriculture technologies: Executive summary


Private finance investment opportunities in climate-smart agriculture technologies


CASA 4×4 Asian Agricultural Investment Summit | 1-pager