Putting Food on the Balance Sheet 2025

Implementing a system of farming practices that increases provision of multiple ecosystem services and improves economic outcomes Investment need of ~$180bn1Regenerative agriculture Eliminating deforestation and ecosystem conversion from supply chains Investment need of ~$300bn2Deforestation and LUC1 prevention Minimizing the amount of food that is discarded or unused throughout the entire food supply chain, from production to consumption Investment need of ~$40bn3Food waste reductionAdopting renewable energy sources to power on-farm activities Investment need of ~$60bn5Green energy usage Applying organic fertilizer or green ammonia synthesized with renewable energy Investment need of ~$10bn6Low carbon fertilizer Developing new technologies, practices and, business models to foster climate mitigation and adaptation across the value chain (e.g., precision agriculture, biological crop inputs, soil sensors) Investment need of ~$20bn7Low carbon technology2 Shifting consumer behaviour towards more sustainable diets Investment need of ~$30bn8Low carbon food consumption Applying livestock mgmt practices aimed at reducing emissions (e.g., from enteric fermentation and manure mgmt) and creating resilient livestock breeds Investment need of ~$110bn4Low carbon & resilient livestock practicesAdaptation/mitigation solutions for food systems transformation and their annual funding needs to reach Paris AgreementFIGURE 3 Note: 1. Land Use Change; 2. for climate adaptation & mitigation. Source: CPI 2024, FOLU 2019, Bain analysis. The investment opportunity Significant opportunities exist for commercial capital to fund food systems transformation through ready- to-deploy climate solutions. While investability of these solutions varies, there are opportunities for commercial capital to generate returns now and in the future across the food value chain. Financiers with exposure to the food sector have a vested interest in supporting current customer resilience, thereby improving credit risk profiles. Additionally, financing the food systems transformation enables financiers to adhere to increasingly stringent portfolio sustainability regulations (e.g., EU, CSRD and guidelines on the management of ESG risks by EBA) and to deliver on critical stakeholder commitments. Four key constraints currently limit the flow of commercial capital needed to transform food systems. –Significant uncertainty on financial returns, as natural ecosystems are unpredictable and outcomes can vary from year to year –Fragmented nature of food production: some 600 million smallholders worldwide produce about one-third of the world’s food11 and they require additional support to access finance (e.g., through technical assistance) –Inconsistent and inefficient impact reporting –Limited coordination across the value chain Putting Food on the Balance Sheet 6