With the global population set to reach 9.8 billion by 2050, communities and ecosystems are facing enormous resource challenges. A recent report by KPMG Lower Gulf (https://KPMG.com/), First Abu Dhabi Bank (FAB) (https://www.BankFAB.com/), and the International Islamic Trade Finance Corporation (ITFC) (https://www.ITFC-idb.org/), titled Harvesting Resilience, Leveraging Finance for Food Security and Climate Resilience (https://apo-opa.co/3t8xGTM), shows how the financial sector is a critical catalyst for change, with potential to shape a sustainable and resilient future.
The report analyses how banks, investors, regulators, and multilateral institutions can effectively collaborate to achieve global climate and food security objectives. It also highlights supporting technologies that are preserving food system integrity and proposes actionable recommendations for financial institutions to actively contribute to a sustainable future.
Food security is a critical goal for the GCC. In the UAE, the Food Security Strategy 2051 aims to position the country as one of the most food-secure in the world through initiatives that ensure the longevity of food systems through climate mitigation and adaptation. Here, sustainable finance presents promising opportunities for GCC banks to drive innovation and invest in sectors crucial for sustainable economic growth.
Islamic Finance, which also embeds sharia’ exclusionary criteria that could be similar to sustainable finance negative screening, offers also opportunities to de-risk sustainable investments. There is an opportunity for Islamic Finance to play an even more important role in the sustainable transformation of the agricultural value chain and make a substantial contribution to food security objectives.
Fadi Al Shihabi, Partner and ESG Services Leader at KPMG Lower Gulf said: “This collaborative report shows how targeted sustainable finance instruments can unlock the widespread adoption of state-of-the-art agricultural technologies, innovative value chain processes, and eco-inclusive farming methodologies across value chains.
Shargiil Bashir, Chief Sustainability Officer at First Abu Dhabi Bank (FAB), said: “Climate change has a direct and significant impact on global food security, presenting the world with a formidable challenge that must be addressed immediately. To overcome this, we require the full might of the financial industry where targeted financing must be deployed for ambitious food security projects as well as for investment in innovative technology. As a regional pacesetter bank in climate action, FAB stands ready to play its part through collaboration that will build resilience and stability within the global food system.”
Mohammad Hafiz Emrith, General Manager, Strategy & Organizational Performance, ITFC spokesperson said: “Our contribution to this thought leadership report is a result of our outlook in further fostering sustainable practices across the agriculture value chain, through our trade solutions whether capacity building initiatives, or Islamic Finance offerings. By leveraging on partnerships, we will promote upskilling on sustainable practices to contribute to the resilience of our member countries in the face of Climate Change. In the GCC, where transitioning to a low-carbon economy is a top priority, innovation in financial instruments, including launching new agri-financing financing lines, increasing the level of green bonds and sustainable financing lines for agri-sector clients, and prioritizing long-term sustainable financing solutions that promote emissions reductions, can improve the sustainability footprint of clients across the agriculture value chain.”
Many state-of-the-art technologies, such as vertical farming and precision agriculture demand substantial upfront capital, presenting obstacles to widespread adoption. However, targeted investments channelled through financial institutions and reinforced by public private partnerships can accelerate scalability. Moreover, financial institutions provide invaluable technical acumen and risk mitigation tools, which can bolster the long-term sustainability of the food system and nurture climate-resilient agriculture.
