Supporting Responsible Investments in Agriculture and Food Systems (RAI)

FAO conducts expert consultation on due diligence tools for Governments and agribusinesses

24/03/2021

Achieving the Sustainable Development Goals (SDGs) requires a significant increase in investment in agriculture and food systems. In particular, realising the first two SDGs - eradicating hunger and poverty – was estimated in 2015 to require an additional USD 140 billion in annual investment in agriculture until 2030. Moreover, in order to cope with the adverse socio-economic effects caused by the health crisis linked to COVID-19, this figure likely needs to be increased even further.

FAO is considering how to develop a suite of tools to encourage responsible investment in agriculture and food systems. This effort will build on experience and resources created in FAO’s RAI Umbrella Programme which seeks to support the application of the Principles for Responsible Investment in Agriculture and Food Systems (CFS RAI).

There are two due diligence tools under consideration: one for government institutions enabling them to assess the extent to which proposed investments in agriculture and food systems are aligned with the CFS RAI; and a second one for agribusinesses to enable the alignment of proposed investment projects with CFS RAI. In addition, a screening tool for financial institutions to assess the extent to which investment project proposals are consistent with the CFS RAI will be considered.

An expert consultation about the need to develop a due diligence tool for government institutions was carried out virtually on March 18. The consultation gathered together 24 experts, including representatives of relevant government ministries and investment promotion agencies, Non-Governmental Organizations, associations and investors. Participants came from 10 different countries in Africa.

The consultations revealed the need for such a tool and the participating experts endorsed its proposed development. Experts agreed that there is a need to support the improvement of current investment approval processes and practices, moving beyond an often narrow focus on environmental impacts towards a more holistic approach that fully considers all socio-economic, environmental and governance aspects. Hence, such a tool should not only provide indicators against which proposed investment projects can be benchmarked, but also advice on appropriate, efficient, and inclusive procedures.

The consultation was done in collaboration with the International Institute of Sustainable development and the Columbia Center for Sustainable Investment.