In the absence of appropriate policy to mitigate nature loss and Greenhouse Gas (GHG) emissions, an abrupt response by the financial sector to correct for accumulating nature and climate risks is increasingly possible.
The food system’s negative impact on nature and climate has created pressure for a transition towards higher sustainability. The financial system plays a key role by financing the food system, and is increasingly expected (by regulators, shareholders and clients) to factor in the nature and climate risks and impacts associated with its financing activities. The report results indicate that a ‘policy-facilitated’ transition improves economic and social outcomes in the agricultural and food systems compared to a ‘financial-risk driven transition, while also leading to better environmental outcomes. The ‘policy-facilitated’ transition improves social and economic outcomes in the agricultural and food system.