Financing the future of food

The urgency to address biodiversity loss has never been more critical, as agriculture emerges as the predominant driver, threatening 86% of species already on the brink of extinction, according to UN findings¹. This alarming rate of species extinction surpasses the natural pace we have seen over the past 10 million years, heralding an unprecedented environmental challenge².

Compounding this issue, the agricultural landscape is defined by approximately 80% smallholder farms, contributing nearly a third of the global food supply³. These small-scale operators are pivotal to food security, especially within emerging markets, yet they often operate without access to vital finance, expertise, quality resources or resilient infrastructure, leaving them exposed to climate variability and market fluctuations.

But the failures of the food system are not limited to the supply side. Consumption patterns are equally troubling. Global diets are increasingly dominated by ultra-processed, calorie-dense foods, while the intake of fruit and vegetables remains far below recommended levels, contributing to rising levels of obesity, diabetes and cardiovascular disease. These diet-related conditions are now among the leading causes of premature mortality worldwide⁴.

“The failures of the food system are not limited to the supply side. Consumption patterns are equally troubling.”
 

Looking ahead, the global population is set to reach 10.3 billion by the 2080s⁵, with a burgeoning middle class – especially in emerging markets – demanding improved nutrition and protein-rich diets. 

Key drivers of rising food demand

Emerging consumers driving demand 
In emerging markets, an expanding and increasingly prosperous middle class is exhibiting heightened awareness about food choices. These consumers want to know where their food comes from, prioritise health and quality, and demonstrate a willingness to pay a premium for sustainably produced products. This shift in demand is acting as a strong catalyst for innovation and transformation across the entire food value chain.

Technological innovation 
Innovations such as precision agriculture, data-driven irrigation, remote sensing, bio fertilisers and alternative proteins are transforming the sector. The agtech market is projected to grow from US$24 billion in 2024 to approximately US$49 billion by 2030⁶. Technology helps reduce waste, increase traceability, improve productivity and optimise supply chains. 

Enabling regulation 
Increasing regulatory support – through initiatives like the EU Green Deal, carbon pricing, true cost accounting and subsidy programs for regenerative agriculture – is creating a more investment-friendly environment. While regulatory progress varies by region, the overall momentum is clear and plays a crucial role in accelerating sustainable food systems.

The role of finance in the transition

To meet these demands and restore balance to our food systems, we must scale regenerative and resilient agricultural practices. The World Economic Forum (WEF) estimates that in order to achieve these goals, annual investment up to US$350 billion will be necessary through to 2030⁷. Yet, currently, the agriculture, forestry and land use sectors receive less than 4% of global climate finance⁸. To adequately cover anticipated annual costs over the next decade, this allocation must be increased by nearly 24 times⁹. To deliver these changes, the sector requires not only innovative working practices, but also innovative solutions to finance these changes.

There are several ways we can play a pivotal role in transforming food systems, and these include:

• Sustainable agriculture
  Investing in companies that promote regenerative farming practices, which focus on restoring soil health, enhancing biodiversity, improving water retention and reducing chemical inputs. These methods go beyond sustainability by actively improving ecosystems, enhancing environmental quality and conserving resources.

• Food and agritechnology
  Supporting startups and companies developing new technologies for food production, processing and distribution can significantly enhance efficiency and sustainability. Innovations in this realm include bio-based fertilisers, precision agriculture, data-driven irrigation systems, remote crop monitoring and localised production strategies that reduce import dependency.
  
  
• Waste reduction 
  Investing in solutions that minimise food loss and waste throughout the supply chain can improve food security and reduce environmental impact. Key approaches include enhancing cold-chain infrastructure, employing processing technologies to reduce spoilage, implementing digital tracking tools and adopting circular economy models to upcycle byproducts.
  
  
• Improving protein supply including alternative proteins
  Funding companies that produce plant-based or lab-grown proteins offers sustainable alternatives to traditional animal agriculture. At the same time, investing in innovations that make conventional livestock production more sustainable – such as improved feed efficiency, manure management and methane reduction technologies – can reduce greenhouse gas emissions and land use impacts.
  
  
• Supply chain resilience
  Enhancing the resilience of food supply chains through strategic investments in infrastructure and logistics is crucial to ensuring stability amid disruptions. Simultaneously, investments that make supply chains more efficient – such as digital logistics platforms, decentralised storage and traceability tools – can reduce costs and environmental impacts.

Implementing sustainability-linked incentives and blended finance structures can reduce investment risks and mobilise capital for transformative efforts that boost biodiversity, restore ecosystems and ensure the availability of nutritious food.

Financial institutions are crucial in fostering collaboration to support sustainable practices and drive innovation in the food value chain. Unlocking more private sector investment in sustainable food systems requires public policies that incentivise regenerative agriculture, increase financing and technology access for smallholder farmers and enhance climate resilience in agricultural value chains. Addressing these challenges and capitalising on investment opportunities will help develop resilient, equitable food systems capable of sustaining a growing global population.

“Unlocking more private sector investment in sustainable food systems requires public policies that incentivise regenerative agriculture, increase financing and technology access for smallholder farmers and enhance climate resilience in agricultural value chains.”

Developed vs emerging markets

The future of global food systems will be shaped by both developed and emerging markets. Emerging markets are witnessing swift demographic and economic transformations, characterised by population growth, urbanisation and rising income levels, which are propelling demand and fostering innovation within agriculture and food systems. As a result, these economies are becoming crucial contributors to global food production and distribution.

According to the World Bank, improved agricultural output from key exporting nations, many in the developing world, is helping to stabilise global grain supplies, highlighting the growing importance of emerging markets in ensuring food security amid climate variability and geopolitical tensions¹¹. These countries are expanding agricultural capacity and adopting new technologies and sustainable practices to enhance productivity and resilience.

The WEF further emphasises the strategic role of developing markets in developing resilient food systems¹². The adaptability of emerging economies, coupled with their plentiful natural resources and youthful workforce, positions them advantageously to meet evolving global food demands. These countries are increasingly using digital tools, precision farming and climate-smart agriculture to boost efficiency and sustainability.

“The adaptability of emerging economies, coupled with their plentiful natural resources and youthful workforce, positions them advantageously to meet evolving global food demands.”
 

Meanwhile, developed markets maintain leadership in agricultural research, innovation and policy development. However, slower population growth and mature markets mean their role is more supportive than primary in expanding the global food supply. They contribute through technological advancements, investments and knowledge transfer, but are less likely to meet growing demand alone.

Therefore, while developed countries are vital for innovation and collaboration, the dynamic growth and evolving capabilities of emerging markets are central to the future of food supply, essential for meeting nutritional needs and ensuring a more equitable and sustainable food system globally.

¹ United Nations Environment Programme, ‘Our global food system is the primary driver of biodiversity loss’, (unep.org), February 2021.
² United Nations Environment Programme, ‘Our global food system is the primary driver of biodiversity loss’, (unep.org), February 2021.
³ Vincent Ricciardi, Navin Ramankutty, Zia Mehrabi, Larissa Jarvis and Brenton Chookolingo, ‘How much of the world's food do smallholders produce?’, (sciencedirect.com), June 2018.
⁴ Leonie Elizabeth, Priscila Machado, Marit Zinöcker, Phillip Baker and Mark Lawrence, ‘Ultra-Processed Foods and Health Outcomes: A Narrative Review’, (pmc.ncbi.nlm.nih.gov), June 2020.
⁵ United Nations, ‘Population’, (un.org).
⁶ Research and Markets, ‘Agritech Market - Global Outlook & Forecast 2025-2030', (researchandmarkets.com), February 2025.
⁷ Victoria Masterson, ‘These 5 steps could help us produce food more sustainably’, (weforum.org), February 2024.
⁸ Barbara Buchner, Baysa Naran, Rajashree Padmanabhi, Sean Stout, Costanza Strinati, Dharshan Wignarajah, Gaoyi Miao, Jake Connolly and Nikita Marini, ‘Global Landscape of Climate Finance 2023’, (climatepolicyinitiative.org), November 2023.
⁹ Daniela Chiriac, Harsha Vishnumolakala and Paul Rosane, ‘Landscape of Climate Finance for Agriculture, Forestry, Other Land Uses, and Fisheries’, (climatepolicyinitiative.org), November 2022.
¹⁰ See Fruitist, (fruitist.com).
¹¹ John Baffes, Dawit Mekonnen and Kaltrina Temaj, ‘Global food commodity prices ease amid improved supply conditions and trade concerns‘, (blogs.worldbank.org), May 2025.
¹² World Economic Forum, ‘Shaping the Future of Global Food Systems: A Scenarios Analysis’, (weforum.org), January 2017.

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