unlocking private sector investment in climate-smart ... · pathways for partnering • use the...

Unlocking Private Sector Investment in Climate-Smart

Agriculture MarkLundy

m.lundy@cgiar.org

Why should business care?

PRODUCTIVITYFeeding 9 Billion People in 2050

FoodDemandByCommodi6esin2050rela6veto2005---07(Billionkgperyear)

1 FoodProduc6onbyRegion1972---2050(Constant2004---06US$)

Asia

NorthAmerica

4,000

3,500

3,000

2,500

2,000

1,500

1,000

500

0

1972

1982

1992

2002

2012

2030

2050

La6nAmerica

AfricaOceania

Europe

CEA2013basedonFAO2012 Sadler, M. 2015. The Role of Resilient Supply Chains in the Face of Climate Change

Sadler, M. 2015. The Role of Resilient Supply Chains in the Face of Climate Change

ADAPTATIONClimateChangeImpactsonFoodSystems

ProblemsToday:ShortTermVola-lity

Recentpricespikesforfoodcommodi6eshavebeenlinkedtoextremeweatherevents

IssuesTomorrow:MediumTermYieldLossesand

IncreasingCostStructuresMaizeandwheatyieldsshowclimateimpacts

UncertainFuture:Produc-onCollapsein

theLongerTermMaizeandwheatyieldsshowclimateimpacts

2a

CCAFS2014;WorldBank2008

ProblemsToday:ShortTermVola-lity

IssuesTomorrow:MediumTermYieldLossesandIncreasingCost

Structures

UncertainFuture:Produc-on

CollapseintheLongerTerm

Sadler, M. 2015. The Role of Resilient Supply Chains in the Face of Climate Change

LONGERTERMDisappearingSupplyChains

AreassuitableforCocoaproduc6oninIvoryCoast,today(top)andin2030(bo\om)

TODAY

Corn

Beeffrom2009---2014:+100%

MEDIUMTERMIncreasingCostStructure

Thepriceforbeefliveweightincreasingsteadilyduetopressurefromfeedandpasturelandmarkets

•  Beefisanexampleofacommoditywheresupplyhascomeunderpressurebecauseofthescarcityofunderlyingresources

Apricehikeincorn(black)drivesdownthesharepriceofTysonFoods(red)

Tyson’s

•  Vola6lecommoditypricescanhaveveryrealimpactsonbusiness–andshareprices

SHORTTERMPriceVola6lityImpactsShares

ADAPTATIONClimateChangeImpactsonFoodCompanies2b

Shortterm:PriceVola-lityImpactsShares

Longerterm:DisappearingSupplyChains

Mediumterm:IncreasingCost

Structure

2030

Foodcompaniesmustbuildresilienceatthefarmerlevelthroughsupplychaindevelopment(increasinglyindevelopingcountries)

Sadler, M. 2015. The Role of Resilient Supply Chains in the Face of Climate Change

EMISSIONSGe lng AheadoftheLegisla6vePush

Source–2015GlobalClimateLegislaRonStudybyGlobe

3 EMISIONSGeSngaheadofthelegisla6vepush

ChallengeBuildfoodsystemsthatmeetincreasingdemandwhileremainingprofitableandsustainableinthefaceofClimateChange.

TheBo\omLine–ClimateSmartAgriculture(CSA)ChallengeandResponse

Canitbedone?Yes,butweneedtoconnectClimateChangewiththeboOomlineoffoodbusinessandunderstandwherepublicsupportisneededtocatalyzeac-on.

How?Buildresilienceatthefarmerlevelandalongthesupplychain

Why does business care?

Drivers for CSA investments

SUPPLYSTABILITY

REPUTATIONALRISKS

Shareholder/customerpressureBuyerrequirementsLicensetooperateLegalcomplianceNGOadvocacy

Co-fundingopportuniResAvoidedregulaRonImprovedlegislaRonImprovedstakeholderrelaRonsCostsavings

GeneralDriversforSustainabilityandCSRinvestments

Entry points vary for different companies

WATER RISK

DEFORESTATION SUPPLY STABILITY REPUTATION

LEGAL COMPLIANCE

COMMUNITY CONFLICT

MICRO-CLIMATE

Key pathways for USAID to partner with business

Pathways for partnering •  Use the right language: Secure private sector commitments to

smallholder CSA by framing the discussion in business terms •  Make knowledge actionable: Work with private companies to

develop and implement CSA action plans based on climate science

•  Facilitate learning: Connect innovators across countries, commodities, market conditions and scales to learn what works where, for whom and under what conditions

•  Identify leverage points for investments: Where do business interests and international development goals intersect.

A tailored approach

First Movers

Committed but Confused

Lightly Engaged CDP reporting

Dow Jones Ranking S&CSR Reporting

External Goals

Notable progress against goals

CEO champion

NGO collaboration

S&CSR as pre-competitive

Scope 3 supply goals

Supplier partnerships S&CSR as competitive

Landscape & sector collaborations

Beyond certifications

Supplier requirements

Public leadership / advocacy

MaptheimpactgradienttounderstandtheriskofclimatechangeoverRme

Convenevaluechainactorsalongtheexposuregradient

IdenRfyandprioriRzerelevantCSApracRcesbyexposuregradientandanalyzecostsandbenefits.

Constructexposurespecificpor^oliosofpriorityCSApracRcesfordifferentinvestors

AreasthattransiRonfromonesuitabilitytypetoanotherbutremainsuitable

TailoredCSAinvestmentplans

LocaRonswhereclimatecharacterisRcswillnotfundamentallychange

ProducRoninthesezoneswilllikelybecomeunviableandothercropsshouldbeconsidered

1.Understandtherisk 2.Makesenseofdata

3.Whatcanwedoandhowmuchwillitcostus?

4.Developcropandsitespecificinvestmentstrategies

Private Sector Engagement in CSA A consortium BAA project to: •  Engage global private sector: Learn how to frame CSA as a

business issue, identify key information needs and language, build partnerships and select 3-4 pilots :: Sustainable Food Lab

•  Make science actionable: Regional climate risk mapping, CSA practice menus, cost benefit analysis, enterprise level assessment tool for CSA implementation and M&E Toolkit on climate resilience :: CIAT, IITA, Root Capital

•  A learning community: Webinars, regional fora and USAID mission meetings & support :: Sustainable Food Lab

Thanks for your attention

StephanieDaniels JayDaniliuksdaniels@sustainablefood.org jdaniliuk@usaid.gov

MarkLundy

m.lundy@cgiar.org

www.feedthefuture.gov