June 24, 2021

By Lynda Kiernan-Stone, Global AgInvesting Media

French fashion label Chanel has committed $25 million as an anchor investment in The Landscape Resilience Fund (LRF) – a new climate adaptation fund looking to raise $100 million by 2025 to support sustainable agriculture, protect forests, and to support smallholder farmers in developing countries. 

Launched through a partnership between World Wildlife Fund (WWF) and South Pole in early June, this new fund has been launched to generate and achieve the maximum possible environmental and social impact. And with Chanel as its anchor investor, and with support from the Global Environment Facility, LRF is eager to rally an additional five to 10 institutional investors looking to be active participants for a more resilient future. 

“By investing in SMEs and local communities in developing countries, the Landscape Resilience Fund is fostering shared understanding and effective implementation of actions which enhance climate resilience and human well-being – landscape by landscape, SME by SME, village by village,” said Stefan Schwager, president of the Foundation Landscape Resilience Fund, former Global Environment Facility Council member, board member of the Green Climate Fund, and former head of environmental finance in the Swiss government.

Within its framework, the LRF blends public, private, and philanthropic funding to provide a scalable way to finance sustainable solutions through three pillars of action: to strengthen an integrated landscape approach (meaning that farmers and landscapes are interconnected and support each other); to provide technical assistance to small and medium-sized enterprises (SMEs) toward investment readiness; and to provide concession loans to SMEs.

“The Landscape Resilience Fund is an excellent example of the sort of innovative partnership that is so urgently needed to address the increasingly devastating impacts of climate change and biodiversity loss,” said Carlos Manuel Rodriguez, CEO, and chairperson of the Global Environment Facility.

“This is a compelling model of blending public and private finance to attract large-scale investment for localized adaptation action, economic recovery, and global supply chain resilience,” continued Rodriguez. “The Landscape Resilience Fund will help countries in their green, blue, clean and resilient recovery from the pandemic.”

Currently, one million animal and plant species are at risk of extinction due to human activity, according to South Pole, with deforestation being a major cause of climate change, as trees absorb approximately one-third of global emissions, while also providing food and livelihoods for humans and habitats for wildlife. 

“The numbers speak for themselves,” said Urs Dieterich, managing director, LRF, and Land Use Fund Manager at South Pole, “climate adaptation remains grossly under-financed, even while extreme weather events continue to disrupt societies and supply chains. Now is the time for companies to show leadership and join us in shaping the future of transformative climate adaptation finance through the Landscape Resilience Fund.”

More strident conservation, restoration, and management efforts are needed. However, South Pole noted that only 5 percent of today’s total climate finance goes to adapting to a warmer planet (the vast majority of which comes from public funds).

Global annual spending to protect and restore our natural resources needs to triple within the decade to $350 billion, according to a UN report released in May, which urges a shift in approach among businesses, financiers, and governments.

“Climate change induces wide-ranging and significant local and global impacts. Even with substantial reductions in future greenhouse gas emissions, these impacts will escalate over the next decades,” said Simone Stammbach, head of Global Network Development and executive board member, WWF Switzerland.

“Therefore, we urgently need financing beyond climate change mitigation. Action for climate and ecosystem-based adaptation – through the Landscape Resilience Fund – brings a “triple dividend” of avoided losses, economic benefits, as well as social and environmental impacts.”

The fund will provide financing and technical assistance to SMEs that work with smallholders, and has a strong current pipeline of more than 20 SME projects focused on sustainable agriculture and forestry in vulnerable landscapes such as cocoa growers or rattan harvesters in sub-Saharan Africa, Southeast Asia, and Latin America.

Project implementation will build on strong stakeholder engagement and a diverse set of objectives when addressing interventions such as community well-being, biodiversity conservation, and a thriving environment. It will also address deforestation, and increasing carbon sequestration through climate-smart agricultural practices such as agroforestry and multi-use crops.

“Chanel is proud to be supporting the Landscape Resilience Fund as anchor investor and we look forward to working together,” said Andrea d’Avack, chief sustainability officer at Chanel. “This reflects Chanel’s commitment to support the most vulnerable communities and landscapes to adapt to climate change, which is vital to help build resilience in global supply chains.”

“There has never been a more critical time for the private sector to step up and help close the investment gap needed for effective climate adaptation,” continued  d’Avack. “Chanel’s involvement in the LRF provides an opportunity to explore different approaches and methodologies that could help advance changes in our own supply chain and business practices, as we progress on our own business transformation.”

– Lynda Kiernan-Stone is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Oilseed & Grain News. She can be reached at lkiernan@globalaginvesting.com.