An interview with the Academic Advisor of the Thematic Working Group on Sustainable and Blended Finance for Food Systems.
Sabine Desczka
Senior Research Coordinator Impact Investment, Wageningen University and Research
Sabine Desczka is the Senior Research Coordinator Impact Investment at Wageningen University and Research.
Carlotta Cramer/GDPRD: Could you introduce your work and tell us more about researching novel financing for food systems?
Sabine Desczka/Wageningen University and Research (WUR): I work for Wageningen University and Research, specifically in Social and Economic Research. I specialize in impact investment and sustainable finance in agriculture, working with large teams to bring about food systems transformation. There is a large global network that we can leverage to bring about food security.
For seven years, I have been focusing on sustainable agriculture and how to finance it. This led me to the Thematic Working Group on Sustainable/Blended Finance for Food Systems and the search for sustainable investment vehicles and financial tools to address climate and food systems challenges.
We realized that this is a systemic issue and neither finance nor research nor business can solve the enormous task by themselves. Collaboration is what we need.
Carlotta: Many argue that blended finance and innovative financing models are outpacing academic research. From your experience, how can we bridge this gap?
Sabine: That's a provocative question, and also partly true. First, I want to highlight the role of research in financing food systems, and second to stress the importance of data availability.
We started researching food systems around 2018, designing new models and looking into more collaborative ways to unlock finance for food systems transformation. We realized that this is a systemic issue and neither finance nor research nor business can solve the enormous task by themselves. Collaboration is what we need.
Secondly, we need the data. Unless the financial sector allows us to use their financial data, we cannot research what works and why. So, the group’s partnership with the Agri-SME Learning Collective (ASLC) to develop a new Catalytic Capital Framework is very important. I'm so happy the group has now taken the step to create the data that is urgently needed for assessing impact and new financial models. As academia, we might not be as actionable as the financial sector, but our value is in using more holistic approaches to understand what works when.
It's one thing to have the method, it's another to get farmers to adopt these measures and find the investments needed for them to change.
Carlotta: Could you share some examples of new or promising developments in academia working on innovative financing models for food systems?
Sabine: When we wrote our article on finance for low-emission food systems, we got a lot of good feedback from our own colleagues, saying we were right and that we need a new angle for researching financing food systems. For 10 years, we have mainly focused on defining the financing gap: How much investment do we need to achieve Zero Hunger in the world? But we have never really researched how exactly this finance needs to be provided.
This is what we're doing right now with Mitigate+ on financing low-emission food systems. Mitigate+ is looking at the effectiveness of new agricultural measures to reduce GHG gases in four countries. It's one thing to have the method, it's another to get farmers to adopt these measures and find the investments needed for them to change. That's our goal.
But we have also started to work on cooling as a new infrastructure to prepare for climate adaptation. There can be a lot gained in the use of digital tools and data-driven financial decisions and using AI to enhance financial instruments and farmer advice. Once we come to that level, we can reduce the costs of blended finance arrangements which would be very beneficial to the financial sector.
Blended finance is not a goal in itself. It needs to lead to better food systems and ease the transformation.
Carlotta: You will be providing academic advisory to the GDPRD’s Thematic Working Group on Sustainable/Blended Finance. Thinking forward, what insights do you hope to share with the group?
Sabine: Blended finance is certainly a promising avenue for financing food systems, but current blended finance vehicles are very expensive. What we see happening in practice is that we get a new vehicle almost for every project and programme, for every single impact. We know that impact is not there in the beginning. By combining different impacts into one measure, we will, in the end, be more effective and have a better financial portfolio. This is what we would like to achieve and we can add to that with sophisticated methods and identify what is worth scaling, which in the end could lead to cost reductions in blended finance.
Blended finance is not a goal in itself. It needs to lead to better food systems and ease the transformation. Anything we can provide in terms of intelligence and key indicators to understand food systems sustainability will contribute to the success of this working group.
Carlotta: Any last thoughts to share with the group?
Sabine: This is the first time that academia is contributing to a technical working group, and that is a good thing. We would like to use this opportunity to invest in a research program for sustainable finance that can support this initiative in the long term and come to more cost-effective blended finance vehicles. This is my call to the financial institutions, to start the dialogue with us and to tell us what they need.
Learn more about the new thematic working group and the report that recommended its creation.
