Putting Food on the Balance Sheet 2025

Upstream (supplier)/local farmer initiativeSustainable debtCommercial capital CorporateDiscounted loans provided to corporates to finance their value chains Commercial lenders can accelerate food systems transformation by funding food and agriculture companies’ efforts to decarbonize and build supply chain resilience. As supply chains drive 90% of their total carbon footprint12 , food companies are increasingly investing in Scope 3 emission reductions. Their stronger credit profiles enable financing on more favourable terms versus farmer financing. The value for corporates depends on the level of discount offered versus standard loans, the lenders typically leverage socially conscious investors to balance economics (sustainable bonds), while building insights on business resilience which translates into lower risk.For example, COFCO International, a Chinese food processor and trader, has secured a $1.6 billion sustainability-linked loan from a consortium of 19 banks. The loan’s terms are directly linked to sustainability performance targets in a wide variety of areas – including environmental management, human rights and diversity. Any margin savings (i.e., lower interest costs if sustainability goals are met) are reinvested in further sustainability efforts (e.g., improving traceability along COFCO’s soy supply chain).13 Source: COFCO Sustainability Report.Model 1 Financing model 1: Discounted loans provided to corporates to finance their value chains FIGURE 5 Global coordinatorCommercial capital Loans Interest payments (discounted)ESG management score Technical assistance Incl. traceability & screening of Brazilian soy Provision of capital Provision of non-financial servicesSustainability coordinators + 16 other banks Direct de-risking for capital providers Tranching First-loss coverage Guarantee Interest payment Insurance premium payment Impact bonus/incentiveIndirect de-risking through demand commitments Offtake agreements Ecosystem outcome monetization Price premiumTechnical assistance/training Grace periodEnablers ESG rating Value chain networkMid and downstream player ESG rating agencyData on pre-agreed KPIsESG management scoreBrazilian soy farmers Putting Food on the Balance Sheet 9