Rebalancing climate finance to prioritize investment and incentives across the entire agri-food value chain — including the often-overlooked “hidden middle” — is crucial for driving progress in transforming food systems and enhancing food security. This is particularly important for small and medium-sized enterprises (SMEs), which make up the majority of the sector’s businesses. By offering food manufacturers targeted financial incentives at the national level, such as grants and low-interest loans, these companies can invest in innovative solutions that reduce greenhouse gas emissions, energy and water usage, and tackle food loss and waste. Equally significant, they can upgrade existing equipment to improve food production efficiency while minimizing resource consumption.
Enhancing operational performance is essential for achieving sustainability goals, as a more efficient facility not only becomes more sustainable, but also reduces food loss and waste. For instance, a dairy factory in China was recently recognized by the World Economic Forum as a sustainable “lighthouse factory.” Thanks to the integration of Industry 4.0 intelligent technologies throughout its operations, the factory has achieved impressive milestones, including a 60% reduction in quality defects — preventing food waste — and a 43% decrease in energy consumption.
Via TetraPak
Looking Ahead
As world leaders prepare to address the most pressing climate challenges at COP29, we are calling on governments and industries to take immediate action to unlock the potential of the “hidden middle” in the agri-food sector. This segment can — and must — play a pivotal role in meeting the Paris Agreement targets and achieving the Sustainable Development Goals (SDGs). With global efforts to limit temperature rise to 1.5°C above pre-industrial levels by 2100 lagging behind, it is essential to channel investments in climate mitigation and adaptation where they will have the greatest transformative impact — particularly within food systems, including the hidden middle of the agri-food value chain.
“With progress to limit global warming to 1.5°C above pre-industrial levels by 2100 currently falling short, investments in climate mitigation and adaptation need to be where they have the greatest impact on transformation.”
Modern food processing and packaging are critical components in building sustainable food systems and have proven to be powerful drivers of transformation across the entire chain. To successfully transform food systems, the intersection between agricultural production and its conversion to available food must be as efficient as possible. It is crucial that increased investments and incentives are embedded in every country’s next wave of Nationally Determined Contributions (NDCs 3.0) in 2025 to work toward this goal.
The evidence is clear and compelling: Now is the time to unlock the untapped potential of the hidden middle.
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References:
[1]: WEFGreenReturns_2023.pdf (weforum.org), page 3
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