November 14, 2024

By Gerelyn Terzo, Global AgInvesting Media

U.S. non-profit impact investor Acumen has earmarked $300 million for climate finance over the next half decade to support ag founders, entrepreneurs and social enterprises throughout Africa, India, Latin America and Pakistan. This commitment distinguishes the organization as one of the biggest ag impact investors for small and vulnerable farmers in developing markets, per the announcement. Additionally, Acumen is catalyzing another $1.2 billion in outside investments to help co-finance nature-based solutions, climate-resilient farming, technology solutions and innovative finance.

The non-profit will establish a pair of investment funds next year, including one in the first quarter and the other by year-end 2025. While Acumen is keeping the roster of investors close to the vest, founder and CEO Jacqueline Novogratz is cited by Bloomberg as saying it will be a combination of existing and new investors. In the past, Acumen has established relationships with investors like Green Climate Fund, the IKEA Foundation, and the Foreign, Commonwealth and Development Office (FCDO) in the U.K.

The proceeds will go toward protecting the world’s smallholder farmers who are responsible for growing nearly one-third of the world’s food from climate change fallout. Climate finance as a theme has been on the rise, but there’s a great deal of work to be done. For example, a mere 1 percent of the $660 billion in climate finance has been directed toward agri-food adaptation. Acumen is looking to close this gap with its commitment combined with that of other investors. Fellow non-profit One Acre Fund, which is focused on East Africa, reportedly attaches a $151 billion value to the funding gap for establishing climate resistance among smallholder farmers, with only $2 billion of climate finance currently being directed to this cohort each year.

By 2030, a key year in the transition to net zero emissions, Acumen is looking to support 40 million farmers in bolstering their yields and forming a more resilient food system to provide greater security for 1 billion people. The funds will also go toward helping tens of millions of smallholder farmers transition to regenerative ag practices across 25 million hectares (61.7 million acres) of farmland. This effort may involve solutions ranging from solar dehydration for waste reduction to bio-digesters for fertilizers, to name a couple of them.

Acumen Founder and CEO Jacqueline Novogratz stated, “While this investment is an achievement for Acumen, it highlights a global failure: climate finance is growing, but adaptation funding lags behind the escalating climate crisis. We hope this investment sparks greater ambition, closes the gap for a more equitable food system, and shows that agricultural adaptation is within reach.”

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