Pablo Perversi at World Bank Summit

May 31, 2018 Sustainability

Financing the transition to climate-smart agriculture

Barry Callebaut’s Chief Innovation, Sustainability & Quality Officer Pablo Perversi took the stage May 23, 2018 at the World Bank Innovate for Climate Summit in Frankfurt (Germany). The topic at hand: financing sustainability. The focus of the summit was financing the transition towards a climate-smart agriculture that does not cause deforestation - a critical issue for Barry Callebaut.

We need to cast the net wide in order to tackle climate change in a systemic way. We cannot just focus on the most visible causes, i.e deforestation, without tackling the underlying causes and financial solutions that are required.

Pablo Perversi, Chief Innovation, Sustainability and Quality Officer​

The transition comes with an investment need, for which a new tool was launched at the summit, Invest4Climate. The initiative will work with commercial financiers, philanthropic organizations and partners to increase the flow of finance for climate action.

Diversification to solve deforestation

Lifting cocoa farmers out of poverty by increasing the productivity of existing farmland is a systemic solution for ending deforestation and forest degradation in the cocoa supply chain.

Barry Callebaut is implementing scientifically validated pilot projects to identify sustainable cocoa farming models in key cocoa producing countries. Multiyear Farm Development Plans (FDPs) include productivity and replanting packages to help farmers create self-driving, self-sustaining agricultural communities.

These plans focus on enabling the professionalization of farming through diversification. This not only improves the health of the soil, and therefore the productivity of the cocoa, but also expands income sources for farmers by introducing alternative crops with proven routes to market.

Funding climate action

The financial sector has a key role to play in this process by providing farmers with access to affordable microcredit to purchase seedlings and fund good farming practices. For Barry Callebaut alone, this means the need for approximately USD 250 million of available risk guarantees in West-Africa.

Additional investment is also needed for replanting ageing and sick cocoa trees. Replanting one hectare of cocoa costs approximately USD 2,400 and Barry Callebaut estimates that thousands of hectares in Ghana and CdI need replanting to restore a healthy, productive cocoa sector.

These figures reveal the scale of the challenge and demonstrate the importance of the Invest4Climate initiative in securing an environmentally and financially sustainable future for cocoa production.

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