UN Food Systems Summit: Climate and Disaster Risk Finance Solutions for the resilience of food systems

Climate and disaster risks pose a significant threat to the resilience of our food systems, which are currently falling short in meeting global needs. Climate and Disaster Risk Finance and Insurance (CDRFI) solutions, when promoted as part of a comprehensive risk management framework, are an important pillar in strengthening the resilience of food systems. 

In September this year, UN Secretary General Antonio Guterres convened the UN Food Systems Summit on the margins of the UN General Assembly, setting the stage for a global food systems transformation to achieve the Sustainable Development Goals (SDGs). This meeting aimed to raise global awareness and encourage commitments towards healthier, more sustainable and equitable food systems.   

In his opening remarks, Secretary General Guterres warned that “world’s food systems [are] fragile and not fulfilling the right to adequate food for all”. He highlighted conflict, climate extremes, and economic volatility as drivers of food insecurity. Indeed, this year, whilst grappling with the unprecedented impact of the Covid-19 pandemic, we witnessed a succession of record-breaking disasters which swept across the globe, including severe flooding in China, west and central Africa and western Europe, heatwaves and drought in north America, and wildfires devastating parts of Europe and Asia. Climate shocks and stresses play a key role in food system failure and undermine our progress against the Sustainable Development Goals. 

Marking the UN Food Systems Summit, the Secretariat of the InsuResilience Global Partnership co-authored a paper entitled Climate Action to Transform Food Systems, which looks at how food systems’ transformation is an essential aspect of climate action. Building on the momentum as we approach the UNFCCC Climate Summit, COP26, this paper looks at how climate action could be aligned with efforts to promote more sustainable food systems.  

Through the work of its members, the InsuResilience Global Partnership offers innovative approaches to protecting food systems from climate shocks. One example is the African Risk Capacity, an initiative designed to improve responses to drought-induced food crises, building on member states’ capacities to manage these risks with index-based weather insurance pool and early response mechanism. In July 2020, promptly at the end of the agricultural season in Madagascar, ARC paid out USD 2.13 million to cover anticipated losses to livelihoods of the impacted population. The payout was used by the Government of Madagascar to assist the lives and livelihoods of 600,000 vulnerable people affected by the drought. This prevented them from resorting to negative coping mechanism including eating their seeds, selling farm implements, internal displacement, forced migration etc. These actions can be undertaken by impacted populations when faced with hunger. While they allow them to survive the season, they put them at risk of sliding further into poverty and lowering their resilience to cope with future stressors.  

Recognizing the powerful impact of the ARC approach, the humanitarian sector has also adopted it through the ARC Replica initiative, which enables the World Food Programme (WFP) and the START network of non-governmental organizations to purchase drought risk insurance policies to broaden the risk financing instruments available for a faster and better coordinated humanitarian response in climate risk hot spots. In 2020, ARC made payouts of USD 1.4 million to the Government of Zimbabwe and another US$ 290,288 to WFP, to support the extensive drought response efforts in Zimbabwe.  

This year’s UN Report on The State of Food Security and Nutrition in the World 2021 puts forward alarming statistics, including an estimated 2.37 billion people who did not have access to adequate food in 2020. This same report found that some 9.9 percent of all people are estimated to have been undernourished in 2020, up from 8.4 percent in 2019. Along with this, 45 percent of deaths among children under five are linked to undernutrition. Creating food systems that are able to feed the growing global population is clearly critically important, but we need to ensure that these food systems can also be protected in the face of increasing climate disaster risks.  

Recognizing the important role of CDRFI for food systems, the InsuResilience Global Partnership, in 2021, established a Sectoral Community with a focus on resilient agriculture and climate and disaster risks. This Sectoral Community brings together key actors from the agricultural risk finance space to advance innovative solutions, influence policy and promote integrated approaches to the risk reduction and transfer.  

At the InsuResilience Global Partnership, we will continue to promote the scale-up of prearranged, predictable financing for early action, relief and recovery and recognize that this is an important pillar within climate and disaster risk management strategies. Managing risks in a timely and efficient manner will be critical to safeguard the resilience of food systems and to avert hunger.