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Tina M Fordham

Jason Channell

Elizabeth Curmi

Zoe Whitton

The 17 United Nations Sustainable Development Goals aim to tackle the challenges, issues, and injustices facing the world by 2030, but the goals themselves are complex. They are arguably all inextricably linked, with numerous feedback loops, not all of them positive. Trillions of dollars of capital wants to invest sustainably but struggles to translate an investment philosophy, which desires alignment with the SDGs, into a practical investment strategy given that complexity. This report tries, as far as possible, to simplify the SDGs — to examine those interlinkages, to determine the driving forces and resulting benefits, and thereby determine a set of critical paths — our so-called 'pathways to success' — which can lead quickly and most effectively to the achievement of the goals. It allows us to identify who is best placed to do what, from the public sector to the private sector to the investment community, and what their route in might be. We examine the goals individually, attempting to lay out both the incremental financial cost/opportunity of achieving the goal, and the human benefit that might be gained by solving it. In a world of scarce resources, it also provides an indication of which paths might achieve the broadest human benefit for the least financial cost though this does not mean these are the most important — it is not by accident that all roads on our 'pathways to success' lead to the eradication of poverty. We identify incremental physical investment needs or opportunities in water, energy, and the circular economy alone of $1.5 trillion per year, while social investment areas of education, health, and hunger add up to an annual incremental opportunity of $800 billion. To be sure, these are enormous sums, but much smaller than the sums of capital looking to invest sustainably and tiny in relation to the human benefits that could be achieved. We also examine the innovative financial instruments and frameworks needed to allow that capital to flow to aid in the achievement of the goals. The SDGs represent the challenge of our generation but a challenge which we should embrace, as the benefits for those suffering most, as well as to the whole global community, would be immeasurable if we were to succeed. By identifying the lowest hanging fruit, the feedback loops, the critical paths, the scale of the opportunity in both human and financial terms, and who might do what, we hopefully break the sometimes daunting SDGs down into a roadmap — a framework which allows all elements of society, from policymakers, to corporates and the financial community, to set out in partnership down a pathway to a better, fairer, wealthier, more inclusive, cleaner, and more sustainable world that we can be truly proud to leave for our children.Authors: Jason Channell,Elizabeth Curmi, PhD.,Zoe Whitton,Tina M Fordham,

The 17 United Nations Sustainable Development Goals aim to tackle the challenges, issues, and injustices facing the world by 2030, but the goals themselves are complex. They are arguably all inextricably linked, with numerous feedback loops, not all of them positive. Trillions of dollars of capital wants to invest sustainably but struggles to translate an investment philosophy, which desires alignment with the SDGs, into a practical investment strategy given that complexity. This report tries, as far as possible, to simplify the SDGs &mdash; to examine those interlinkages, to determine the driving forces and resulting benefits, and thereby determine a set of critical paths &mdash; our so-called 'pathways to success' &mdash; which can lead quickly and most effectively to the achievement of the goals. It allows us to identify who is best placed to do what, from the public sector to the private sector to the investment community, and what their route in might be. We examine the goals individually, attempting to lay out both the incremental financial cost/opportunity of achieving the goal, and the human benefit that might be gained by solving it. In a world of scarce resources, it also provides an indication of which paths might achieve the broadest human benefit for the least financial cost though this does not mean these are the most important &mdash; it is not by accident that all roads on our 'pathways to success' lead to the eradication of poverty. We identify incremental physical investment needs or opportunities in water, energy, and the circular economy alone of $1.5 trillion per year, while social investment areas of education, health, and hunger add up to an annual incremental opportunity of $800 billion. To be sure, these are enormous sums, but much smaller than the sums of capital looking to invest sustainably and tiny in relation to the human benefits that could be achieved. We also examine the innovative financial instruments and frameworks needed to allow that capital to flow to aid in the achievement of the goals. The SDGs represent the challenge of our generation but a challenge which we should embrace, as the benefits for those suffering most, as well as to the whole global community, would be immeasurable if we were to succeed. By identifying the lowest hanging fruit, the feedback loops, the critical paths, the scale of the opportunity in both human and financial terms, and who might do what, we hopefully break the sometimes daunting SDGs down into a roadmap &mdash; a framework which allows all elements of society, from policymakers, to corporates and the financial community, to set out in partnership down a pathway to a better, fairer, wealthier, more inclusive, cleaner, and more sustainable world that we can be truly proud to leave for our children.Authors: Jason Channell,Elizabeth Curmi, PhD.,Zoe Whitton,Tina M Fordham,

Pathways to Success – A Systematic Framework for Aligning Investments

Although there is much in the world to be proud of, we still face enormous societal, environmental, and economic challenges. Even in this day and age, more than 2 billion people — a quarter of all humankind — lack access to even the most basic elements of life that most of us take for granted, such as clean water, sanitation, and energy, while 800 million people — more than one in ten of us — remain undernourished. At its most extreme, the picture is infinitely worse; 700 million people, again, almost one in ten of us, still live below the poverty line on less than $1.90 per day, a sum that many of us spend on a coffee without a second thought. More than 40% of children younger than age 14 (800 million) still lack access to a 'complete' education, and are denied the opportunity to reach their full potential. Beyond the obvious impact on their own lives, what benefits might almost a billion extra well-educated people bring to the world?

United Nations Sustainable Development Goals

Ying Qin

Amy Thompson

At the UN Climate Change Conference (COP26) in November 2021, world leaders came together and set a global agenda on a path to net zero emissions. Pledges were made to further cut carbon dioxide emissions, reduce the use of coal, lower methane emissions, and stop deforestation. Importantly, an actionable framework was put around the promises made in the Paris Agreement. There are volumes of literature explaining why the world needs to focus on lowering greenhouse gas emissions. Countless experts list the devastating effects rising global temperatures will have on weather, crops, biodiversity, migration, and health. And a continuous stream of politicians and public figures tell us how important it is to support a green agenda. But unfortunately, there has been little focus on what is likely the most important subject — how do we pay for global action on climate change? In the report that follows, we aim to answer two questions: (1) What investment is needed in different regions and countries for climate mitigation and adaptation? and (2) How can we mobilize this investment efficiently to enable the world to reach its climate goals while still growing in population and developing the economy? Overall, it is estimated that $125 trillion will be needed for the world to reach net zero by 2050. From 2021-25, that equates to $2.6 trillion per year, rising to $3.8 trillion from 2026 through 2030. Although climate finance has increased over the past decade, it is still significantly below the levels required for us to be on the path to net zero. Average annual climate finance flows in 2016-20 were estimated at between $600 billion and $900 billion meaning there is a $1.7 trillion gap between what the world has been delivering each year towards climate financing and what is required through 2025. Alarmingly, no single country or region is currently on track to meet its individual climate financing targets. Mobilizing climate financing is a challenge as there is no one global solution. The public sector, including governments and development finance institutions, has played an extremely important role in mobilizing finance and the private sector has contributed 49% of investment funds. Unlocking private sector capital for climate finance is crucial as private actors could provide 70% of the $2.6 trillion needed in investment every year (on average in 2021-25) to put the world on a path to net zero by 2050.[1] Financial instruments, such as blended finance, in conjunction with development finance institutions can increase private sector investment in developing economies. And green banks, which develop clean project pipelines, are using innovative financing to accelerate the transition to clean energy. Collaboration — between developed and developing economies as well as the public and private sectors — is key to making this a just transition. [1] UNFCCC Race to Zero campaign with support and analysis from Vivid Economics, “Financing Road Maps,” accessed November 2, 2022.Authors: Elizabeth Curmi,Jason Channell,Ying Qin,Amy Thompson,

<h3 class="">At the UN Climate Change Conference (COP26) in November 2021, world leaders came together and set a global agenda on a path to net zero emissions. Pledges were made to further cut carbon dioxide emissions, reduce the use of coal, lower methane emissions, and stop deforestation. Importantly, an actionable framework was put around the promises made in the Paris Agreement.</h3>
 There are volumes of literature explaining why the world needs to focus on lowering greenhouse gas emissions. Countless experts list the devastating effects rising global temperatures will have on weather, crops, biodiversity, migration, and health. And a continuous stream of politicians and public figures tell us how important it is to support a green agenda. But unfortunately, there has been little focus on what is likely the most important subject &mdash; how do we pay for global action on climate change? In the report that follows, we aim to answer two questions: (1) What investment is needed in different regions and countries for climate mitigation and adaptation? and (2) How can we mobilize this investment efficiently to enable the world to reach its climate goals while still growing in population and developing the economy? Overall, it is estimated that $125 trillion will be needed for the world to reach net zero by 2050. From 2021-25, that equates to $2.6 trillion per year, rising to $3.8 trillion from 2026 through 2030. Although climate finance has increased over the past decade, it is still significantly below the levels required for us to be on the path to net zero. Average annual climate finance flows in 2016-20 were estimated at between $600 billion and $900 billion meaning there is a $1.7 trillion gap between what the world has been delivering each year towards climate financing and what is required through 2025. Alarmingly, no single country or region is currently on track to meet its individual climate financing targets. <img class="alignnone size-full wp-image-11404" src="https://www.citivelocity.com/citigps/wp-content/uploads/2022/11/Climate-Finance-Gap.png" alt="" width="775" height="442" /> Mobilizing climate financing is a challenge as there is no one global solution. The public sector, including governments and development finance institutions, has played an extremely important role in mobilizing finance and the private sector has contributed 49% of investment funds. Unlocking private sector capital for climate finance is crucial as private actors could provide 70% of the $2.6 trillion needed in investment every year (on average in 2021-25) to put the world on a path to net zero by 2050.<a href="#_ftn1" name="_ftnref1" data-link-source="tiny">[1]</a> Financial instruments, such as blended finance, in conjunction with development finance institutions can increase private sector investment in developing economies. And green banks, which develop clean project pipelines, are using innovative financing to accelerate the transition to clean energy. Collaboration &mdash; between developed and developing economies as well as the public and private sectors &mdash; is key to making this a just transition. <a href="#_ftnref1" name="_ftn1" data-link-source="tiny">[1]</a> UNFCCC Race to Zero campaign with support and analysis from Vivid Economics, &ldquo;<a href="https://www.gfanzero.com/netzerofinancing/" data-link-source="tiny">Financing Road Maps</a>,&rdquo; accessed November 2, 2022.Authors: Elizabeth Curmi,Jason Channell,Ying Qin,Amy Thompson,

Climate Finance Gap Climate-related projects mobilized between $600 billion and $900 billion on average annually in 2016-20. The IEA Net Zero Scenario estimates $125 trillion is required to reach net zero over the next 30 years. Therefore, getting on a path to net zero requires an additional annual investment of $1.7 trillion in 2021-25 in mitigation alone. Developing countries especially need support as they do not have the fiscal capacity to invest in climate action.

Climate-related projects mobilized between $600 billion and $900 billion on average annually in 2016-20. The IEA Net Zero Scenario estimates $125 trillion is required to reach net zero over the next 30 years. Therefore, getting on a path to net zero requires an additional annual investment of $1.7 trillion in 2021-25 in mitigation alone. Developing countries especially need support as they do not have the fiscal capacity to invest in climate action.

Climate Finance Gap

Substantial Investment Scale Is Needed Across All Regions Current climate investment flows need to be scaled up substantially as no region is currently on track to deliver enough investment to meet their climate finance needs. For example, investments need to reach $170 billion in Africa, $1.1 trillion in Asia Pacific, and $500 billion in North America annually between 2021 and 2025 in order to build low-carbon economies and adapt to climate change, with even higher needs in 2026-30. In all three regions, current investment flows are substantially below what is needed.

Current climate investment flows need to be scaled up substantially as no region is currently on track to deliver enough investment to meet their climate finance needs. For example, investments need to reach $170 billion in Africa, $1.1 trillion in Asia Pacific, and $500 billion in North America annually between 2021 and 2025 in order to build low-carbon economies and adapt to climate change, with even higher needs in 2026-30. In all three regions, current investment flows are substantially below what is needed.

Substantial Investment Scale Is Needed Across All Regions

Making It Happen Mobilizing climate finance is challenging, but we need to start looking at climate action as an opportunity versus a cost. Making this happen will require mobilizing the private and public sectors to work together, to create projects that are bankable, and to ensure a just transition. Since not one solution applies to all countries, we outline which key actors and financial institutions can scale up climate finance for countries at different levels of economic development.

Mobilizing climate finance is challenging, but we need to start looking at climate action as an opportunity versus a cost. Making this happen will require mobilizing the private and public sectors to work together, to create projects that are bankable, and to ensure a just transition. Since not one solution applies to all countries, we outline which key actors and financial institutions can scale up climate finance for countries at different levels of economic development.

Making It Happen

At the UN Climate Change Conference (COP26) in November 2021, world leaders came together and set a global agenda on a path to net zero emissions. Pledges were made to further cut carbon dioxide emissions, reduce the use of coal, lower methane emissions, and stop deforestation. Importantly, an actionable framework was put around the promises made in the Paris Agreement. There are volumes of literature explaining why the world needs to focus on lowering greenhouse gas emissions. Countless experts list the devastating effects rising global temperatures will have on weather, crops, biodiversity, migration, and health. And a continuous stream of politicians and public figures tell us how important it is to support a green agenda. But unfortunately, there has been little focus on what is likely the most important subject — how do we pay for global action on climate change? In the report that follows, we aim to answer two questions: (1) What investment is needed in different regions and countries for climate mitigation and adaptation? and (2) How can we mobilize this investment efficiently to enable the world to reach its climate goals while still growing in population and developing the economy? Overall, it is estimated that $125 trillion will be needed for the world to reach net zero by 2050. From 2021-25, that equates to $2.6 trillion per year, rising to $3.8 trillion from 2026 through 2030. Although climate finance has increased over the past decade, it is still significantly below the levels required for us to be on the path to net zero. Average annual climate finance flows in 2016-20 were estimated at between $600 billion and $900 billion meaning there is a $1.7 trillion gap between what the world has been delivering each year towards climate financing and what is required through 2025. Alarmingly, no single country or region is currently on track to meet its individual climate financing targets. Mobilizing climate financing is a challenge as there is no one global solution. The public sector, including governments and development finance institutions, has played an extremely important role in mobilizing finance and the private sector has contributed 49% of investment funds. Unlocking private sector capital for climate finance is crucial as private actors could provide 70% of the $2.6 trillion needed in investment every year (on average in 2021-25) to put the world on a path to net zero by 2050.[1] Financial instruments, such as blended finance, in conjunction with development finance institutions can increase private sector investment in developing economies. And green banks, which develop clean project pipelines, are using innovative financing to accelerate the transition to clean energy. Collaboration — between developed and developing economies as well as the public and private sectors — is key to making this a just transition. [1] UNFCCC Race to Zero campaign with support and analysis from Vivid Economics, “Financing Road Maps,” accessed November 2, 2022.Authors: Elizabeth Curmi,Jason Channell,Ying Qin,Amy Thompson, Climate Finance Gap Climate-related projects mobilized between $600 billion and $900 billion on average annually in 2016-20. The IEA Net Zero Scenario estimates $125 trillion is required to reach net zero over the next 30 years. Therefore, getting on a path to net zero requires an additional annual investment of $1.7 trillion in 2021-25 in mitigation alone. Developing countries especially need support as they do not have the fiscal capacity to invest in climate action. Substantial Investment Scale Is Needed Across All Regions Current climate investment flows need to be scaled up substantially as no region is currently on track to deliver enough investment to meet their climate finance needs. For example, investments need to reach $170 billion in Africa, $1.1 trillion in Asia Pacific, and $500 billion in North America annually between 2021 and 2025 in order to build low-carbon economies and adapt to climate change, with even higher needs in 2026-30. In all three regions, current investment flows are substantially below what is needed. Making It Happen Mobilizing climate finance is challenging, but we need to start looking at climate action as an opportunity versus a cost. Making this happen will require mobilizing the private and public sectors to work together, to create projects that are bankable, and to ensure a just transition. Since not one solution applies to all countries, we outline which key actors and financial institutions can scale up climate finance for countries at different levels of economic development.

Mobilizing the Public and Private Sector to Ensure a Just Energy Transition

At the UN Climate Change Conference (COP26) in November 2021, world leaders came together and set a global agenda on a path to net zero emissions. Pledges were made to further cut carbon dioxide emissions, reduce the use of coal, lower methane emissions, and stop deforestation. Importantly, an actionable framework was put around the promises made in the Paris Agreement.

Climate Finance 

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We take things for granted every day. In the morning it’s easy to take the coffee cart on the sidewalk outside the office for granted, despite it allowing us to start day with a warm cup of caffeine and a buttered roll. At 7a.m. there are likely few thoughts around the logistics necessary for the cart to be fully stocked and in the right location each morning, let alone the details around where the flour and coffee beans were grown. Being able to easily get breakfast is all the matters. In the Citi GPS Sustainability series, we have written extensively about climate change. Specifically, in Food and Climate Change: Creating Sustainable Food Systems for a Net Zero Future, we discussed the impact of food production on greenhouse gas emissions, and in Food Security: Tackling the Current Crisis and Building Future Resilience, we explored how climate change can heighten the ever-present global threat of food insecurity. But the big issue we may be overlooking is the relationship between food, water, and climate change. What happens if changes in climate affect the availability of water resources? And with water already stressed in many regions, could climate change lead to pressures on food production? In our new report, we investigate the connections between water, food, and climate change — known as the water, food, and climate nexus — with particular attention given to the impacts that too much or too little water could have on food production. Staple crops — rice, wheat, maize (corn), and soybeans — make up around two-thirds of the world’s food calories, making them critically important to consumers worldwide. Global production of these staple crops is highly concentrated in regions known as “breadbaskets,” and at least 72% of the global production of each of these crops is found in just five regions. Any changes to the growing conditions in these regions would have huge global consequences. In our analysis, we looked at the water stress levels in these five regions and found that in a “business-as-usual” climate change scenario, many countries have an extremely high risk of water stress in 2050. India is of particular concern, with over 70% of rice and 78% of wheat currently produced in areas that could have high-to-significant water stress in 2050. We then looked at the materiality of staple food production in each country, including whether the country is a large producer or exporter of these staple crops and the size of the country’s population. We found that a failure, or even a reduction, in crop yields in any of these countries would have a material impact on global food security, with cereal prices rising by 1% to 28% and an additional 1 million to 180 million people potentially going hungry. Moreover, nearly $3 trillion of business revenues of publicly listed companies could be affected. The good news is there are plenty of technological solutions that can help us avoid this dismal scenario, but good governance will also be important. We explore these opportunities in the report. The food, water, climate change nexus is critical and should not be taken for granted.

We take things for granted every day. In the morning it&rsquo;s easy to take the coffee cart on the sidewalk outside the office for granted, despite it allowing us to start day with a warm cup of caffeine and a buttered roll. At 7a.m. there are likely few thoughts around the logistics necessary for the cart to be fully stocked and in the right location each morning, let alone the details around where the flour and coffee beans were grown. Being able to easily get breakfast is all the matters.
In the Citi GPS Sustainability series, we have written extensively about climate change. Specifically, in <a href="https://www.citigroup.com/global/insights/GPS/food-and-climate_20220719" target="_blank" rel="noopener" data-link-source="tiny">Food and Climate Change: Creating Sustainable Food Systems for a Net Zero Future</a>, we discussed the impact of food production on greenhouse gas emissions, and in <a href="https://www.citigroup.com/global/insights/GPS/food-security" target="_blank" rel="noopener" data-link-source="tiny">Food Security: Tackling the Current Crisis and Building Future Resilience</a>, we explored how climate change can heighten the ever-present global threat of food insecurity.
But the big issue we may be overlooking is the relationship between food, water, and climate change. What happens if changes in climate affect the availability of water resources? And with water already stressed in many regions, could climate change lead to pressures on food production? In our new report, we investigate the connections between water, food, and climate change &mdash; known as the water, food, and climate nexus &mdash; with particular attention given to the impacts that too much or too little water could have on food production.
Staple crops &mdash; rice, wheat, maize (corn), and soybeans &mdash; make up around two-thirds of the world&rsquo;s food calories, making them critically important to consumers worldwide. Global production of these staple crops is highly concentrated in regions known as &ldquo;breadbaskets,&rdquo; and at least 72% of the global production of each of these crops is found in just five regions. Any changes to the growing conditions in these regions would have huge global consequences.
<img src="/rcs/v1/media/citigpa/akpublic/storage/retrieveMediaFile/656780675cb9b8276cef0fb4.png" alt="Food_Water_Climate" />
In our analysis, we looked at the water stress levels in these five regions and found that in a &ldquo;business-as-usual&rdquo; climate change scenario, many countries have an extremely high risk of water stress in 2050. India is of particular concern, with over 70% of rice and 78% of wheat currently produced in areas that could have high-to-significant water stress in 2050. We then looked at the materiality of staple food production in each country, including whether the country is a large producer or exporter of these staple crops and the size of the country&rsquo;s population.
We found that a failure, or even a reduction, in crop yields in any of these countries would have a material impact on global food security, with cereal prices rising by 1% to 28% and an additional 1 million to 180 million people potentially going hungry. Moreover, nearly $3 trillion of business revenues of publicly listed companies could be affected.
The good news is there are plenty of technological solutions that can help us avoid this dismal scenario, but good governance will also be important. We explore these opportunities in the report.
The food, water, climate change nexus is critical and should not be taken for granted.
<img style="display: block; margin-left: auto; margin-right: auto;" src="/rcs/v1/media/citigpa/akpublic/storage/retrieveMediaFile/6567809d9cc09145f2fd4f06.png" alt="Food_Water_Climate" />
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Food Insecurity, Water, and Climate Change Agricultural production is highly susceptible to changes in climate. It is also reliant on the availability of water resources, which are already stressed in many regions important for food production. These water pressure will increase with climate chnage.&nbsp;

Agricultural production is highly susceptible to changes in climate. It is also reliant on the availability of water resources, which are already stressed in many regions important for food production. These water pressure will increase with climate chnage.&nbsp;

Food Insecurity, Water, and Climate Change

Food Production At Risk We analyzed crop-producing regions in key "breadbaskets" and found that large portions of food production occur in areas forecast to face varying levels of water stress risk due to climate change. Including all levels of water stress, we also assign a "materiality" rating to assess the impact of global food security from a decline in a region's food production. This rating is based on crop production levels, export levels, population size, and other water indicators such as drought.

We analyzed crop-producing regions in key "breadbaskets" and found that large portions of food production occur in areas forecast to face varying levels of water stress risk due to climate change. Including all levels of water stress, we also assign a "materiality" rating to assess the impact of global food security from a decline in a region's food production. This rating is based on crop production levels, export levels, population size, and other water indicators such as drought.

Food Production At Risk

Potential Impacts of No Action Doing nothing to prevent a potential water and food crisis will not only impact people's health and nutrition, but could also cause economic damage and political instability.&nbsp;

Doing nothing to prevent a potential water and food crisis will not only impact people's health and nutrition, but could also cause economic damage and political instability.&nbsp;

Potential Impacts of No Action

Solutions To help reduce and adapt to the impact of climate change on water resources and food production, we highlight both innovation-based solutions and improvements to water governance.

To help reduce and adapt to the impact of climate change on water resources and food production, we highlight both innovation-based solutions and improvements to water governance.

Solutions

We take things for granted every day. In the morning it’s easy to take the coffee cart on the sidewalk outside the office for granted, despite it allowing us to start day with a warm cup of caffeine and a buttered roll. At 7a.m. there are likely few thoughts around the logistics necessary for the cart to be fully stocked and in the right location each morning, let alone the details around where the flour and coffee beans were grown. Being able to easily get breakfast is all the matters. In the Citi GPS Sustainability series, we have written extensively about climate change. Specifically, in Food and Climate Change: Creating Sustainable Food Systems for a Net Zero Future, we discussed the impact of food production on greenhouse gas emissions, and in Food Security: Tackling the Current Crisis and Building Future Resilience, we explored how climate change can heighten the ever-present global threat of food insecurity. But the big issue we may be overlooking is the relationship between food, water, and climate change. What happens if changes in climate affect the availability of water resources? And with water already stressed in many regions, could climate change lead to pressures on food production? In our new report, we investigate the connections between water, food, and climate change — known as the water, food, and climate nexus — with particular attention given to the impacts that too much or too little water could have on food production. Staple crops — rice, wheat, maize (corn), and soybeans — make up around two-thirds of the world’s food calories, making them critically important to consumers worldwide. Global production of these staple crops is highly concentrated in regions known as “breadbaskets,” and at least 72% of the global production of each of these crops is found in just five regions. Any changes to the growing conditions in these regions would have huge global consequences. In our analysis, we looked at the water stress levels in these five regions and found that in a “business-as-usual” climate change scenario, many countries have an extremely high risk of water stress in 2050. India is of particular concern, with over 70% of rice and 78% of wheat currently produced in areas that could have high-to-significant water stress in 2050. We then looked at the materiality of staple food production in each country, including whether the country is a large producer or exporter of these staple crops and the size of the country’s population. We found that a failure, or even a reduction, in crop yields in any of these countries would have a material impact on global food security, with cereal prices rising by 1% to 28% and an additional 1 million to 180 million people potentially going hungry. Moreover, nearly $3 trillion of business revenues of publicly listed companies could be affected. The good news is there are plenty of technological solutions that can help us avoid this dismal scenario, but good governance will also be important. We explore these opportunities in the report. The food, water, climate change nexus is critical and should not be taken for granted. Food Insecurity, Water, and Climate Change Agricultural production is highly susceptible to changes in climate. It is also reliant on the availability of water resources, which are already stressed in many regions important for food production. These water pressure will increase with climate chnage.&nbsp; Food Production At Risk We analyzed crop-producing regions in key "breadbaskets" and found that large portions of food production occur in areas forecast to face varying levels of water stress risk due to climate change. Including all levels of water stress, we also assign a "materiality" rating to assess the impact of global food security from a decline in a region's food production. This rating is based on crop production levels, export levels, population size, and other water indicators such as drought. Potential Impacts of No Action Doing nothing to prevent a potential water and food crisis will not only impact people's health and nutrition, but could also cause economic damage and political instability.&nbsp; Solutions To help reduce and adapt to the impact of climate change on water resources and food production, we highlight both innovation-based solutions and improvements to water governance.

Climate change would have a devastating impact on water resources, which would in turn affect food production. Many of the regions that are important for the production and exportation of staple crops have a medium-to-extremely-high risk of water stress under our "business-as-usual" climate change scenario. Technologies and innovation can help but we need to act soon and elevate water in our sustainable agendas and discussions. 


Solutions for Tackling this Critical Nexus

Climate change would have a devastating impact on water resources, which would in turn affect food production. Many of the regions that are important for the production and exportation of staple crops have a medium-to-extremely-high risk of water stress under our "business-as-usual" climate change scenario. 

Food, Water, and Climate Change

Over the past decade, amazing progress has been made toward addressing climate change. In 2015, 196 parties adopted the breakthrough Paris Agreement at the COP15 meeting, creating a legally binding international treaty focused on keeping the rise in the mean global temperature below 2°C above pre-industrial levels. At the COP26 meeting in 2021, world leaders assembled again to lay out a global agenda for a path to net-zero emissions, and they established an actionable framework around the promises made in the Paris Agreement. Once the plan was put together, the next challenge was figuring out how to pay for global action on climate change. Between 2016 and 2020, climate-related projects mobilized between $600 billion and $900 billion on average annually. However, to reach the IEA Net Zero by 2050 Scenario, an estimated $125 trillion is required over the next 30 years. Despite global finance flows more than doubling in 2022 to $1.4 trillion from 2020, the estimated annual climate finance gap between 2030 and 2050 is nearly 7x 2022 flows. Investment progress in the energy transition is being made — in developed markets via private capital financing, and in emerging markets primarily from public sector capital and supranational organizations. To achieve already-established global climate goals, much of the climate finance in the coming decades will be in emerging markets. The challenge is to mobilize private capital with lower risk profiles to invest in higher-risk emerging markets that need funding for climate projects. In this report, we lay out a framework for the development of “bankable projects” that relies on stakeholders to building an understanding of the challenges facing each party by creating an enabling environment, looking at projects through an investment prism, developing a project lifecycle, and delivering successful outcomes. What this means in practice is each stakeholder doing their part to bring very much needed climate finance to emerging and developing markets. For public sector this means developing a stable and predictable political and economic backdrop while also intentionally setting a climate agenda. Government officials should work with multilateral development banks (MDBs) development finance institutions (DFIs), and importantly the private sector, to prepare complete feasibility studies that further their climate agendas. MDBs and DFIs know that they are a major contributor to the mitigation of risk and their ability to reform their frameworks for capital deployment, among other calls will be key to the success of scaling in new markets or technologies. Private sector corporates and financial institutions also play a role; their ability to understand risks, markets, and the immense opportunities ahead is imperative. The hard part of the energy transition is mostly done — there is a will to invest in projects, and there is capital to fund those projects. Bridging the gap and releasing the flow of capital is the next step.

Over the past decade, amazing progress has been made toward addressing climate change. In 2015, 196 parties adopted the breakthrough Paris Agreement at the COP15 meeting, creating a legally binding international treaty focused on keeping the rise in the mean global temperature below 2&deg;C above pre-industrial levels.
At the COP26 meeting in 2021, world leaders assembled again to lay out a global agenda for a path to net-zero emissions, and they established an actionable framework around the promises made in the Paris Agreement. Once the plan was put together, the next challenge was figuring out how to pay for global action on climate change. Between 2016 and 2020, climate-related projects mobilized between $600 billion and $900 billion on average annually. However, to reach the IEA Net Zero by 2050 Scenario, an estimated $125 trillion is required over the next 30 years. Despite global finance flows more than doubling in 2022 to $1.4 trillion from 2020, the estimated annual climate finance gap between 2030 and 2050 is nearly 7x 2022 flows.
Investment progress in the energy transition is being made &mdash; in developed markets via private capital financing, and in emerging markets primarily from public sector capital and supranational organizations. To achieve already-established global climate goals, much of the climate finance in the coming decades will be in emerging markets. The challenge is to mobilize private capital with lower risk profiles to invest in higher-risk emerging markets that need funding for climate projects.
In this report, we lay out a framework for the development of &ldquo;bankable projects&rdquo; that relies on stakeholders to building an understanding of the challenges facing each party by creating an enabling environment, looking at projects through an investment prism, developing a project lifecycle, and delivering successful outcomes.
<img src="/rcs/v1/media/citigpa/akpublic/storage/retrieveMediaFile/656a05755cb9b8276cef16df.png" alt="Bankable" />
What this means in practice is each stakeholder doing their part to bring very much needed climate finance to emerging and developing markets. For public sector this means developing a stable and predictable political and economic backdrop while also intentionally setting a climate agenda. Government officials should work with multilateral development banks (MDBs) development finance institutions (DFIs), and importantly the private sector, to prepare complete feasibility studies that further their climate agendas. MDBs and DFIs know that they are a major contributor to the mitigation of risk and their ability to reform their frameworks for capital deployment, among other calls will be key to the success of scaling in new markets or technologies. Private sector corporates and financial institutions also play a role; their ability to understand risks, markets, and the immense opportunities ahead is imperative.
The hard part of the energy transition is mostly done &mdash; there is a will to invest in projects, and there is capital to fund those projects. Bridging the gap and releasing the flow of capital is the next step.

In climate finance, there has historically been a mismatch between the risk appetite of capital and the risk profile of projects. At the heart of the issue is creating bankable projects. The best way to deal with this challenge is to build capacity, education, understanding and will while at the same time creating an enabling environment where each player understands what the others need. If this is achieved, it will go some way to creating a framework which will allow capital to flow.


Creating Bankable Projects

In climate finance, there has historically been a mismatch between the risk appetite of capital and the risk profile of projects. At the heart of the issue is creating bankable projects. The best way to deal with this challenge is to build capacity, education, understanding.

Unlocking Climate and Development Finance

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