UN Environment and Rabobank announced the creation of a new $1 billion fund to finance sustainable agriculture. Their goal is to increase the quality of existing arable land while protecting biodiversity and reducing climate change.
The Dutch financial institution Rabobank and UN Environment signed the partnership on Tuesday at the World Business Council for Sustainable Development plenary session in Mexico City.
The $1 billion fund will provide grants, de-risking instruments and credit to clients involved in sustainable agricultural who adhere to strict provisions for forest protection, restoration and the involvement of smallholders.
By using a combination of public and private funding, the fund seeks to ensure long-term stability of food production for the growing global population while supporting a transition to sustainable land use.
“As the leading global food and agriculture bank, Rabobank recognizes its responsibility to combine long-term stability of food production for the growing global population and the transition to sustainable land use,” said Rabobank CEO Wiebe Draijer.
“It is clear that a different way of agricultural practices is needed that includes incentives and provisions to protect forest ecosystems and restore degraded lands if we are to meet the 2030 Sustainable Development Goals as well as keep global temperature rises to below 2 degrees Celsius as agreed in the Paris Climate Agreement.”
According to a statement, the initiative will kick off in Brazil and Indonesia.
In Brazil, the aim is to promote and finance integrated crop, livestock and forestry (ICLF) farming practices on 17 million hectares of existing arable land under the management of Brazilian farmers financed by Rabobank and part of a strategic WWF-Rabobank partnership.
In Indonesia, the facility will finance replanting schemes for smallholders in partnership with corporate clients, including certification of oil palm.
“We want the entire finance industry to change their agricultural lending, away from deforestation and towards integrated landscapes, which provide good jobs, protect biodiversity, and are good for the climate,” added Erik Solheim, head of UN Environment.
“We want to speed up this trend so that it becomes the ‘new normal’ for the finance industry.”
According to UN Environment, halting climate change and an increasing agricultural footprint, while ensuring growth in agricultural production to feed an estimated 9 billion people by 2050 will be among the most defining challenges of the 21st century.
Image credit: Maria Fleischmann / World Bank via Flick