London, 25 November 2019
Rice bonds and global climate finance are an untapped opportunity to unlock finance for sustainable rice value chains.
A new report launched today by Earth Security finds that innovative finance solutions are urgently needed to unlock private sector finance for climate-smart rice production with significant impact on global food security and climate resilience.
Earth Security's new report ‘Financing Sustainable Rice for a Secure Future’ proposes three innovative finance solutions to support sustainable rice production in line with the Paris Agreement climate targets. The report is produced in collaboration with global action partners: the UN Capital Development Fund (UNCDF), the Sustainable Rice Platform (SRP), the leading food and agribusiness company Phoenix, the World Business Council for Sustainable Development (WBCSD), and the Swiss Agency for Development and Cooperation (SDC).
The proposed finance solutions include a ‘rice bond’ to finance sustainable rice value chains taking advantage of 2020 being a key year for the growth of green bonds in the agriculture sector, as highlighted by the Climate Bonds Initiative. A rice bond would enable a global rice processor, trader, or retailer to provide farmers with capital to transition to sustainable production, improve farming practices, increase yields and revenue, and become more resilient to climate risks.
Coming ahead of the 2019 United Nations Climate Change Conference (COP 25) in Madrid, Earth Security also recommends leveraging international climate finance to attract private sector investment for climate-smart rice production. Country pledges that include rice in their Nationally Determined Contributions (NDCs) would be the first place to start. At present, forty-eight countries include in their NDCs the commitment to reduce greenhouse gas (GHG) emissions from rice paddies but have not yet outlined how they plan to incentivise the private sector to achieve these targets.
The report presents the outcome of Earth Security's work to catalyse innovative finance mechanisms that enable agribusiness, banks, investors, and global climate finance to create new ways of harnessing private sector investment to scale up sustainable rice production.
Partner testimonials:
“Sustainable rice has the potential to improve lives and livelihoods in many of the world’s poorest countries, where we work. Earth Security has shown their unparalleled ability to combine rigorous, well-researched insights with pragmatic action items, as well as the convening power to bring the right partners to the table to move from talking to doing. We are proud to be pioneering new financing vehicles that will help attract private sector capital to support SDG- and climate-positive investments, particularly for those countries most in need.” - Esther Pan Sloane, Head of Partnerships, Policy and Communication, UN Capital Development Fund (UNCDF)
“Building sustainable food systems will require leading global companies that help to scale a new way of growing crops: increasing food security and farmer livelihoods while decreasing agriculture’s resource footprint. Phoenix Group is working actively with partners to realise the commercialisation of climate-smart, gender-inclusive rice production globally. We are delighted to be working with SRP, WBCSD and Earth Security to shape innovative financing partnerships for sustainable agriculture.” - Gaurav Dhawan, Executive Chairman, Phoenix
“Rice is critical to global food security; however, it has been largely overlooked as an investment opportunity. SRP’s tools, metrics and guidance can help governments and supply chain actors drive adoption of proven climate-smart best practices. Through our partnership with Earth Security, we are developing innovative financial mechanisms that will catalyze wide-scale adoption among the world’s 144 million rice smallholders and achieve sector transformation contributing to the SDGs and climate targets.” - Wyn Ellis, Executive Director, Sustainable Rice Platform (SRP)
“Mobilizing innovative finance—such as a ‘rice bond’—to support the sustainable transformation of rice-based landscapes is vital for productivity, livelihoods, climate and nature. By collaborating with Earth Security and driving action through the Sustainable Rice Landscapes Initiative, WBCSD is bringing business and finance to scale action for healthy people and a healthy planet.” - Tony Siantonas, Director, Sustainable Landscapes, World Business Council for Sustainable Development (WBCSD)
“The failure of global food systems due to climate change is one of the biggest security challenges we face. A radical overhaul of existing rice production systems is needed in Asia – the epicentre of global rice production and consumption – as well as Africa, which is now also increasingly depend on rice imports to ensure food security. Our report is a call to action for global impact investors to put ‘climate-smart’ rice farming practices at the centre of their impact investment strategies and for governments to use climate finance to attract private investment towards more resilient agriculture systems.” - Alejandro Litovsky, CEO of Earth Security
