Rebalancing climate finance to increase and ‘ring fence’ investment and incentives across the full agri-food value chain – including in the hidden middle – is critical to stimulate momentum in food systems transformation and to simultaneously strengthen food security. This is particularly true for small and medium-sized enterprises, which account for most of the sector’s businesses.[7] By equipping food manufacturers with targeted national-level financial incentives, including grants and concessional loans, they can invest in new solutions that save greenhouse gas emissions, energy and water use, and help reduce food loss and waste. Equally important, they can opt for upgrading installed equipment, to optimize food production, while reducing resource use. Improving performance is vital for reaching sustainability goals, as a more efficient plant is a more sustainable plant, and a plant that reduces food loss and waste. As an example, a dairy factory in China has recently been recognized by the World Economic Forum as a sustainable “lighthouse factory”.[8] By implementing Industry 4.0 intelligent technologies throughout their operations, they have achieved remarkable results, including a 60 percent reduction in quality defects, which helps prevent food waste, and a 43 percent drop in energy consumption.
Looking ahead
As attention narrows to solving the world’s most pressing climate challenges at COP29, we are urging governments and industry to act now to unlock the hidden middle, which can – and must – play a crucial role in achieving the Paris Agreement ambitions and the SDGs. 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 – namely food systems, including the hidden middle of the agrifood 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
Advanced food processing and packaging are essential to develop modern sustainable food systems and are proven enablers of a powerful transformation across the entirety of the chain. To achieve food systems transformation, the intersection between agriculture production and conversion to food availability needs to be as efficient as possible. It’s crucial that increased investment and incentives are integrated into every country’s NDCs 3.0 in 2025 to work toward this goal.
The evidence is compelling. The time to unlock the untapped potential of the hidden middle is now.
[1] WEF_Green_Returns_2023.pdf (weforum.org), page 3
