Agroecological enterprises stand to benefit from very promising market opportunities and growth potential as they are much better positioned to address and withstand the new realities of climate change, limited natural resources and unpredictable global politics, which all have implications for global trade and prices. But more importantly, they also offer better solutions for consumers, who are increasingly aware of health and food safety.”
Ivan Mandela, Co-founder and CEO, Shona Capital
This section shares insights on key aspects of how to invest in AEEs:
- Specific financial needs: access to patient and flexible capital
- Non-financial needs: capacity building, networks and an enabling environment
- How to build an investment pipeline
- How to assess and conduct due diligence on existing agroecology financing vehicles
- Creative financing models to inspire investments in AEEs.
As highlighted in previous sections, a systemic approach, such as agroecology and other related concepts, is needed to fix the underlying and interconnected crises our food systems currently face. Consequently, we also need forward-thinking and systemic, innovative investment that is aimed at enabling real systems change. The vast majority of agricultural investments continue to go into high-input, industrialised farming systems that are inherently exposed to greater hidden risks. Our current financial system has also created concentrated monetary wealth, but failed at preserving natural capital and creating equality.
We need to invest in smarter, more future-proof solutions and be more aware of social and environmental elements to capture the right opportunities and avoid assets becoming stranded.
The challenging question remains – how do we do that?
First and foremost, it is increasingly clear that replicable silver bullet solutions are falling out of fashion, as they tend to fail to respect and address the complexity and context specificity of different realities and solutions. An increasing number of actors, organisations and vehicles are starting to do things differently, offering us opportunities to learn, get inspired, and replicate and build on new approaches and learnings.
The trajectory of our investments needs to change and align with the long-term protection of our environment. Focus must be placed on regeneration, circulation and restructuring. The financial system’s current extractive logic will prevent it from being able to serve the needs of agroecological enterprises and other social enterprises, community-centred initiatives and regenerative approaches.
Investing in systems change requires more than making minor adjustments to an investment strategy. Agroecology offers investors a compass – a set of 13 principles to guide investment approaches for delivering systems transformation. A set of agroecological tools has been developed by different organisations, which when used in combination can support investors in practically applying agroecological principles to their investment strategies.