Rosanna Crawford, TCA Accelerator Outreach and Communications Coordinator

This January, over 140 Nobel and World Food Prize Laureates signed an open letter for “planet friendly ‘moonshot’ efforts” to avert a hunger catastrophe in the next 25 years. In the face of climate change, conflict, and market pressures, the letter called for urgent action to meet the food needs of 9.7 billion people by 2050. 

With this spotlight on food systems, it was therefore a timely moment to bring together experts from the world of finance and investment for our Dialogue on 15 January. This Dialogue was part of our True Cost Accounting (TCA) Dialogue Series and Summit, an initiative to dramatically scale implementation of TCA by 2030.

Financing landscape level food system transitions that deliver positive outcomes for nature and people is critical to address the climate and biodiversity crises, and growing social inequality. 

However, investors looking for returns beyond financial capital will be facing significant headwinds in the coming years. ESG backlash, a lack of political will, and continued support for fossil fuels continue to challenge those working in this space. 

Nevertheless, our Dialogue participants were undaunted by these challenges. They discussed success stories, and strategies to challenge mainstream investment narratives and scale TCA in finance and investment by 2030. 

The conversation centred on three main themes:

• Too much and not enough data
• Bridging between worlds 
• Getting to scale, sustainably
  

 

Too much and not enough data
Questions around data collection, quality and methods have proven to be a key theme in our Dialogue Series. Data is essential for building a compelling evidence base, communicating the benefits of approaches like regenerative agriculture, and as an accountability tool for addressing issues like deforestation. 

However, although there is a lot of data available, the datasets are often not directly comparable, not relevant for investor decision-making, and not sufficient for traceability efforts and financial reporting standards.

A potential solution could be to establish methodology standards, or work with researchers or other partners to support data collection. Similar to our Dialogue on TCA Evaluations, the question of standardized methods provoked diverging reactions: many felt that it was easy to get hung up on having certain metrics or data as a prerequisite for making decisions. Establishing shared trust, and “not letting the perfect be the enemy of the good,” was felt to be equally important when it came to taking action. 

“We have to keep in mind that we’re never going to get to the perfect methodology or the perfect data set.” Workshop Participant

Bridging between worlds
Investing using a holistic framework like TCA means diverging from the goals of conventional investment – which prioritizes financial returns and operates on short time frames. 

One solution for creating bridges between different investment worlds is to further socialize the idea of delivering outcomes in the long term rather than short term. Long term horizons in investment are those of 10+ years. One participant described how impacts on the next generation are often talked about in sustainability circles, but indigenous communities think in terms of centuries or millennia when making decisions about consumption and resource use. 

Another participant shared afterwards that there were two separate discussions happening: one in ‘UN speak’, the other in ‘investor speak’. This gap mirrors realities in the field, where high-level considerations are still separated from investor requirements and groundlevel implementations. This generates an opportunity to move the concept of TCA into actual market valuation mechanisms.

Another participant shared their success in bridging between the worlds of government, investment, and foreign aid to launch a bond focused on sustainable agriculture and renewable energy expansion in Indonesia. The road to launching the bond was smoothed by their positive relationships with the different stakeholders in question. Relationships are invaluable, but the subsequent conversation on scaling TCA in finance and investment explored other avenues for impact.

Getting to scale, sustainably
Attracting investment into agriculture is often challenging, but essential to transform our food system to be healthy, sustainable, and equitable. Working in African countries, two participants had designed projects centred on small businesses and farmer cooperatives to attract alternative sources of finance, including public finance and sovereign wealth funds. This investment creates scaling opportunities by fostering innovation and building local capacity. 

As well as practical examples of scaling efforts, participants also confronted some of the ideological barriers to scaling TCA in finance and investment. At the moment, nature-based solutions and other climate or biodiversity-focused investment opportunities are seen as either a net cost or zero/low returns to investors. In other words, they are not perceived as a serious money-making opportunity.

One perspective offered was that this represented a failure to shift the mainstream narrative of “there is not enough money in the system”, and that these initiatives will not generate returns. Another participant spoke to the need to ultimately look beyond profit and competition to pursuing impacts in social and planetary well-being.

“We can make money and do good for the planet, and I don’t know why we have such difficulty talking about it.” Workshop Participant

Next Steps
At the end of the Dialogue, our participants shared they felt hopeful, energized and excited for what comes next. In terms of working to scale the uptake of TCA in finance and investment, some felt more influential as they made investment decisions, while others felt encouraged by the thought of working together.

Thank you to all our participants for their time and energy, and willingness to dive into the hard problems. Thank you as well to our Dialogue co-leads, Tim Crosby and Rex Raimond.

We are coming to the end of the Dialogue Series, and will be publishing two more blog posts on Communications and Advocacy and Aligning Forces in True Cost Accounting. Expressions of interest are now open for our True Cost Accounting Global Summit, which is taking place in Rome, Italy on 15-16 April.