At COP28, global leaders for the first time recognized explicitly that the world needs to “transition away from fossil fuels” to achieve net zero. Agriculture and food systems were also broadly elevated in the first global stocktake, which considers how countries are acting to meet the Paris Agreement objective of keeping temperature rises to 1.5°c above pre-industrial levels.
The final text was able to secure a consensus within the 200 attending counties to include language to “transition away from fossil fuels”, which are responsible for an estimated 65% of GHG emissions and “phase down” the unabated use of coal. Many observers, however, felt that COP28 ambitions were insufficient to avoid the climate tipping points that could trigger “devastating domino effects.”
The wide range of participants in the global climate summit ballooned to over 100,000 with events, panels and workshops spread over the substantial Dubai landscape. The distribution of activities billed as the “most inclusive” climate talks to date meant that despite the overwhelming number of participants, the COP venues seemed subdued, quiet even. There were few of the usual protests, despite an urgency to achieve global consensus and the need for swift climate action felt by many attending
Meanwhile, the global temperature record was broken in November for a record sixth consecutive month, highlighting the urgency we should all feel around cutting emissions.
Action and financial packages were announced around methane, with 50 oil and gas companies pledging to cut methane emissions, which are responsible for a third of our planetary warming.
Climate finance was another feature of COP28 and the conversation centered around integrating the private sector more fully in discussions. COP28 mobilized over US$85bn of climate finance, recognizing the need to significantly scale up adaptation finance to meet urgent and evolving needs. We have to hope that a significant portion of those capital flows support more vulnerable emerging economies. COP28 delivered historic negotiated outcomes to operationalize the Loss and Damage fund, configured to provide financial support to developing countries suffering severe impacts from climate change, securing US$792m in early pledges.
A gratifying takeaway from COP28 was to see agriculture and food systems take centre stage in climate discussions, despite the back and forth on final inclusion in messaging. More than 700 food related events were hosted across the many venues in Dubai.
A broad Coalition of 150 ‘Farmers and Frontline Communities, Business, Philanthropies, and Cities’ sent a strong message to assembled world leaders and the global community through a shared “Non-State Actors Call to Action for Transforming Food Systems for People, Nature, and Climate”.
Calling for a set of global targets and transition pathways by COP29 at the latest, the coalition resolved to work on a set of high priority actions through to COP30 and “to unite behind a shared vision to transform food and agriculture to become a key solution – not a leading driver – of the climate, nature and food crises.”
This was a strong acknowledgement, signed by ADM Capital as a Non-State Actor, that food systems play a critical role in keeping the 1.5°c goal in sight, but needs advanced into action. More than 100 organizations, corporations, and institutions from around the world signed an open letter calling on world leaders not to leave food systems off the table in the final stocktake text and indeed, language was included. We attended various discussions across multiple sectors and formats on the topic of food, how we produce it, biodiversity risk and its relevance in climate discussions.
ADM Capital participated in a panel titled “Financing Food and Land Use Systems: Where Are We and How Can We Move Forward?” which debated the provision of data to account for nature in transactions. Central to the discussion was an agreement from panellists to prioritise communities in any discussion on finance.
We also participated in a second session, a “Taskforce for Nature Related Financial Disclosure Data Lab”, with the session reinforcing the need for radical collaboration among all stakeholders, and the need for financial institutions to deliver assessments on nature-related risks, and the challenges associated with asset location and supply chain data.
Smallholder farmers and supply chain actors handle a significant share of global food production, supporting food security, nutrition, livelihoods, and economies. Small farms (those with less than two hectares of land) contribute 35% of the world’s food and attribute 12% of total agricultural land.
Last week, ADM Capital launched its first private credit impact vehicle – the Asia Climate-smart Landcape Fund (“ACLF”) – with a focus on agriculture commodities in Indonesia, which is home to the world’s third largest tropical forests. Indonesia is the world’s fifth largest emitter of carbon and 50% of those greenhouse gas emissions come from land use change from forests to agriculture. ACLF’s innovative blended finance approach, combined with access to ADM Capital’s sustainability expertise, creates a competitive cost of capital for borrowers.
We are all consumers of agri-commodities and bear collective responsibility for catalysing change in production. ADM Capital sees opportunities in helping Indonesia’s small and medium-enterprises transition to sustainable practices – something that is inevitable if they are to continue to sell product into European or US markets, where evolving regulation, international off-taker procurement policy and consumer awareness requires operational change.
Most importantly, while on the sidelines of the global negotiations, it was encouraging to observe the energy expended in learning, connecting and the sharing of ideas, however, there are only so many new initiatives and targets that can be announced before we must look to tangible implementation and results.
Managing Director, Head of Sustainable Finance