Presented by Donika Dimovska (Earth Security Group) on 18 & 19 February 2020 for the webinar Accelerating innovative finance for sustainable rice hosted by the Sustainable Rice Landscapes Initiative and the Global Environment Facility (GEF).

1. Financing Sustainable
Rice for a Secure Future:
Innovative Finance Partnerships for Climate Mitigation and Adaptation
Supporters and Action Partners:

2. Exclusion Area (See Layers Panel)
Strategic Analysis to Mobilize Action
• The ESG global report’s goal is to identify opportunities
to scale impact finance in support of the rice sector’s
sustainable transition.
• The collaborative research process engaged over 60
stakeholders including banks, asset managers, impact
investors, major rice traders and agribusiness companies,
international organisations and civil society groups.
• The ultimate aim in 2020 and beyond is to mobilize new
practical pathways for innovative financing
partnerships that deploy finance to scale-up sustainable
rice production practices.

3. Exclusion Area (See Layers Panel)
An Underappreciated Finance Opportunity
§ 2020 is a key year for green bonds for agriculture: The
Climate Bonds Initiative’s release of a new taxonomy for
agriculture; the existing Sustainable Rice Platform (SRP)
Standard and Performance Indicators can serve as the impact
framework for new finance innovations.
§ Now is a key time to raise the impact profile of the rice
sector and leverage the global momentum ahead of COP26
(Glasgow) to make progress on climate mitigation and adaptation
goals.
.
Rice is not a well-understood impact finance opportunity for global sustainable
investors, despite its critical importance for food security and climate resilience.
Photos: ESG’s convening of finance, agribusinesses, UN
agencies to co-create innovative finance recommendations

4. FACT 1
3.5 BILLION PEOPLE
DEPEND ON RICE AS THEIR
MAIN STAPLE FOOD
FACT 6
GLOBAL PRODUCTION IS
EXPECTED TO FALL 15% BY
2050 DUE TO CLIMATE
CHANGE
FACT 3
RICE CONSUMES 40% OF
THE WORLD’S IRRIGATION
WATER
FACT 4
RICE PRODUCES 10%
OF GLOBAL METHANE
EMISSIONS
FACT 5
48 COUNTRIES SEEK TO
INVEST IN CLIMATE-SMART
RICE IN THEIR NDCs.
FACT 2
1 BILLION LIVELIHOODS
DEPEND ON RICE FARMING
FACT 7
RICE PRICES ARE SENSITIVE
TO CLIMATE SHOCKS AS
LESS THAN 10% OF GLOBAL
PRODUCTION IS TRADED
7 Facts Making Rice a Critical Impact Commodity
Exclusion Area (See Layers Panel)

5. Exclusion Area (See Layers Panel)
§ With global production expected to fall, the
impacts will be most severe in small
countries with tropical climates – e.g., up
to 80% cut in rice cultivation in the Sahel.
§ As prices rise, poverty rates in non-
agricultural HH in Asia and Africa could rise
by 20-50%.
§ Senegal is one of the countries most at risk
due to high dependency on rice imports;
others include Nigeria, Mozambique,
Botswana, South Africa, Malaysia,
Caribbean.
Regional Scenarios: South East Asia & West Africa
Low and middle-income countries in Asia and Africa are particularly vulnerable to the
combined impacts of climate change, water scarcity, and food insecurity.
Figure: Global rice production increases needed to meet demand by 2035

6. Exclusion Area (See Layers Panel)
§ Four of the world’s top producers –
Bangladesh, China, Myanmar and
Vietnam – refer to rice in their NDCs.
§ Bangladesh (4th largest producer, where
rice accounts for 13% of total GHG
emissions), has gone further than others
to set rice emission reduction targets.
§ Only 18 countries refer to extending
financial mechanisms for financing
farmers to promote climate-smart
production.
A Critical Investment Opportunity for Countries
Countries are taking action to incorporate opportunities for emissions reductions from
rice cultivation as part of their Nationally Determined Contributions (NDCs).
Figure: Rice production versus GHG emissions

7. Exclusion Area (See Layers Panel)
The Business Case for Sustainable Rice
Sustainable rice is defined as one that is affordable, improves the livelihoods of rice
producers and significantly reduces the environmental impact of rice production.
§ A range of practices and technical
innovations that address the sector’s
sustainability challenges can be
mainstreamed globally.
§ The Sustainable Rice Platform (SRP) rice
production standard and performance
indicators provide a practical compliance
and monitoring mechanism specific to
sustainable rice cultivation.
Figure: 12 Performance Indicators for Sustainable Rice Production

8. Exclusion Area (See Layers Panel)
Blueprints to Scale Finance for Sustainable Rice

9. Exclusion Area (See Layers Panel)
Create a digital finance platform to channel finance to smallholders
Case Study: Mastercard Lab for Financial Inclusion gives farmers a unique ID
and connects them to potential buyers, links their businesses to payment
systems, and enables them to build a digital transaction record to access
formal credit.
Action Recommendations:
§ Convene a Digital Rice Finance Task Force involving agribusinesses, banks, and
technology providers to define the scope and services of an integrated digital finance
platform for sustainable rice.
§ Develop an integrated digital finance pilot which demonstrates how technology,
finance, government and value chain actors can partner to enhance finance access to
smallholders working towards the SRP standard.

10. Exclusion Area (See Layers Panel)
Case Study: Launched in July 2019, the Responsible Commodities Facility (RCF) provides
low-interest credit lines to 1,000 medium-sized soy farmers committed to using degraded
lands and avoiding deforestation. Funds are raised by issuing investment grade rated green
bonds through a special purpose vehicle aimed at institutional investors.
Issue a ‘rice bond’ to finance sustainable rice value chains
Action Recommendations:
§ A global rice processor, trader, retailer that has off-take agreements with sustainable
rice farmers and an integrated value chain to consider issuing a ‘rice bond’.
§ Develop a ‘rice bond’ that uses the purchasing power of the World Food
Programme (WFP) to drive global demand for sustainable rice, enabling upfront
investments in climate-smart production.

11. Exclusion Area (See Layers Panel)
Leverage International Climate Finance
to Unlock Private Sector Investment
Action Recommendations:
§ Multilateral climate funds can support national governments in preparing for the
planning, design and issuance of a sovereign green bond for climate-smart rice
investments.
§ Agribusinesses and international donors can collaborate to develop blended finance
funds that increase financing directly to smallholder farmers and helps to mobilise the
domestic financial sector.
§ Agribusiness and international donors can collaborate to develop and scale nature-
and landscape-based solutions for sustainable rice, including tapping into carbon
market mechanisms.

12. Thank you
Donika Dimovska
Director of Impact & Innovation
Earth Security Group
donika@earthsecurity.org
Exclusion Area (See Layers Panel)