Climate finance plays a crucial role in stimulating food systems transformation and strengthening food security. By rebalancing it to increase and 'ring fence' investment and incentives across the full agri-food value chain, including the hidden middle, significant progress can be made. Small and medium-sized enterprises, which make up the majority of sector businesses, stand to benefit greatly from targeted financial incentives.

Harnessing Climate Finance for Food Systems Transformation

Equipping Food Manufacturers with Incentives

Food manufacturers can invest in new solutions that save greenhouse gas emissions, energy and water use, and reduce food loss and waste by being equipped with targeted national-level financial incentives such as grants and concessional loans. For instance, a dairy factory in China has implemented Industry 4.0 intelligent technologies throughout its operations and achieved remarkable results. It has reduced quality defects by 60 percent, preventing food waste, and dropped energy consumption by 43 percent. This shows the potential of such incentives in optimizing food production while reducing resource use.

By making these investments, food manufacturers can not only contribute to sustainability goals but also enhance their competitiveness in the market. It is a win-win situation that benefits both the environment and the business.

Moreover, upgrading installed equipment can also lead to significant improvements. It allows for better utilization of resources and increased efficiency in food production. This is essential for reaching sustainability goals and making the food industry more sustainable.

Importance of Advanced Food Processing and Packaging

Advanced food processing and packaging are crucial for developing modern sustainable food systems. They act as proven enablers of a powerful transformation across the entire food chain. To achieve food systems transformation, the intersection between agriculture production and conversion to food availability needs to be as efficient as possible.

Increasing investment and incentives in this area is vital. It should be integrated into every country's NDCs 3.0 in 2025 to work towards this goal. The evidence clearly shows the need for such actions. The time to unlock the untapped potential of the hidden middle is now.

By focusing on advanced food processing and packaging, countries can improve the efficiency and sustainability of their food systems. This will lead to better food security and a more sustainable future.

Looking Ahead at COP29

As attention narrows to solving the world's most pressing climate challenges at COP29, it is crucial for governments and industry to act now. Unlocking the hidden middle can play a crucial role in achieving the Paris Agreement ambitions and the SDGs.

With progress to limit global warming to 1.5°C above pre-industrial levels by 2100 currently falling short, investments in climate mitigation and adaptation need to be directed where they have the greatest impact - namely food systems, including the hidden middle of the agrifood chain. This requires collective efforts and a clear understanding of the importance of this sector.

By working together, governments and industry can unlock the hidden middle and drive meaningful change in food systems. It is an opportunity that cannot be missed in the fight against climate change and the pursuit of sustainable development.