Markets Institute: The "$200 Billion Gap"
As of 2015, a large number of private sector companies, including global retailers and brands, have committed to sourcing close to $450 billion of sustainably produced raw materials by 2020. To date however, producers can only meet a little over 50 percent of those commitments.
The result? A gap worth hundreds of billions of dollars between the current supply and demand for sustainable raw materials by 2020.
The Markets Institute at WWF is committed to creating awareness and building consensus around what we are describing as the “$200 Billion Gap,” and documenting solutions and proven strategies to close it.
One of the biggest obstacles to closing the “$200 Billion Gap,” is that producers, many of whom are small holders in poor rural communities in Less Developed Countries, lack access to the capital needed to invest in more sustainable practices. This is often the result of underdeveloped institutions, a lack of financial tools and an inefficient regulatory and legal environment.
That is why the Markets Institute is currently with working with a diverse group of partners—including financial institutions, traders and global food companies—to better understand this issue and how to address it.
One area we have already begun looking at this year is how to leverage current commitments to buy down the risk of investments in more sustainable production through financial instruments. These range from long-term contracts and pooled commitments, to JVs, ESOPs, insurance tools, and others.
Not only will this help companies meet their commitments—it will also improve the lives of millions of producers in rural communities, all while creating a more sustainable future for our finite planet.
Want to learn more about the issue?
- Big business: are deforestation goals at risk of failing? The Guardian
- Direct sourcing a win-win deal for retail giant, farmers The Nation
- From farm to plate to policy Johns Hopkins Magazine
- Supporting small farmers key to feeding the world, conserving water Financial Advisor Magazine
- Food industry focuses on sustainable sourcing to mitigate climate change www.euractiv.com
- Adapting to climate change: Smallholder farmers feeding the world Devex Impact