As growing populations put greater strain on raw materials and natural resources, financial institutions are taking notice. For these companies—which rely on the long-term viability of agriculture and commodities—sustainability is a key strategy for managing risk, entering new markets and returning value to investors.
WWF understands that working closely with the finance industry is a critical way to influence agribusiness all over the world. Together, we can advance sustainable production of food, fiber, and fuel that impact the ecologically important regions that WWF seeks to protect. For this reason, WWF has developed a dozen engagements with major lending institutions ranging from agricultural lenders like Rabobank and Credit Agricole to institutions like the German Development Bank (DEG) and the Dutch Development Bank (FMO).
By actively collaborating with these financial institutions, WWF helps them develop, implement and track sustainability initiatives, from internal policies to financial products. We know the industry has an incredible impact through their portfolios and lending practices, specifically for the food and agriculture sectors.
Attaching sustainability criteria to their lending and investment conditions allows financial institutions to advance sustainable production and increase the uptake of certification standards. WWF has been working with stakeholders to develop criteria for those lending conditions, culminating in a major milestone with the release of The 2050 Criteria: Guide to Responsible Investment in Agricultural, Forest, and Seafood Commodities.
Standards for Good Business
The 2050 Criteria provides a framework to help investors identify responsible companies and projects in some of the business sectors—like sugar, cotton, timber, fish and palm oil—with the greatest influence and impact on nature. The criteria combines insights from WWF’s more than 50 commodities experts, who work around the world with more than 60 leading global consumer goods companies, food and agriculture businesses, and financial institutions.
Increasing the uptake of certification standards can have a real and positive impact on nature and the lives of people in developing countries—from creating safer working conditions and cleaner water to more effective community engagement. The standards that WWF has helped to develop demonstrate that companies now recognize sustainability as a business issue—one that can positively transform entire business sectors’ operations, protect habitats, and prevent biodiversity loss.
Advancing Food Security
The 2050 Criteria are already making an impact. The African Development Bank (AfDB) and Credit Suisse have incorporated guidance from The 2050 Criteria into a private equity fund targeting investments in food security and sustainable agriculture in Africa.
“Combining the latest scientific, industry, and financial insights, WWF’s 2050 Criteria provides a tool and an entry point for investors to access mainstream agricultural, forest, and seafood commodities in a responsible manner,” says Joshua Levin, Senior Program Officer in Finance and Commodities at WWF.
By adopting the guidance in The 2050 Criteria, financiers will be able to:
- Manage critical business and reputational risks
- Reduce transaction costs and simplify decision making by aligning investment Criteria with leading industry practice
- Contribute to improved risk adjusted returns
- Shape responsible practices on the ground in these high-impact sectors
“Food security is the challenge of the 21st century. We absolutely need more investments in agriculture, not less,” says Levin. “Our hope is that these criteria will help financial institutions to evaluate their own investments, inform the advice they give clients and even shape financial products.”