The market for sustainable agricultural products is predicted to rise to over US$800 billion globally by 2020. With the present Covid-19 crisis highlighting the fragility of global supply chains amid surging demand for key products, attention will soon turn to how to mitigate these challenges in the medium to long term in a sustainable fashion.
Opportunities across this sector abound, from traditional investments in farmland and sustainable forestry, to modern tech-based innovations on herd and crop management aimed at increasing yields.
A key resource for investments in this sector, which has traditionally struggled to attract capital due to the difficulties in managing specific agricultural risks, will be green finance.
The green loan principles published by the LMA, LSTA and APLMA highlight environmentally sustainable management of living natural resources (including environmentally-sustainable agriculture, animal husbandry and climate-smart farm inputs) as key indicative categories of eligibility for green projects. This eligibility sits neatly within the framework of surging demand for green investments with US$456 billion of sustainable debt reported to have been issued in 2019.
Britain will never have the climate necessary for exotic produce but growing crops more efficiently is possible © Bloomberg