The bank for a changing world

Sustainable agriculture—an imperative for emerging markets

  • 21.01.2019

Agriculture will need to overcome the major challenges of rising global demand for food (fueled by population growth and dietary changes) and climate change. The US National Academy of Sciences warns that climate change may trigger crop failures for one third of all fruits and vegetables. A more sustainable form of agriculture is part of the solution. BNP Paribas is one of the most committed private sector players in this area, notably working to support farms in India and Indonesia, to optimize their productivity and reduce their carbon footprint.

$7 trillion to build a better world

In the context of the Paris Agreement, the UN estimates that achieving its sustainable development goals will take US$5-7 trillion, including $2.5 trillion for developing countries, alone. As a leading driver of the energy and ecological transition, BNP Paribas takes action to help achieve these goals.

  • Jean-Laurent Bonnafé

    Director and CEO of BNP Paribas Paris

    “We are an international bank and we consider it our duty to help build a better world. We have a role to play. Through our central role in the economy, we can not only take action but also encourage a wide range of players to devote capital to projects that respond to the challenge of climate change and, more broadly, sustainable economic development. It is our responsibility to direct this funding towards developing countries and the most vulnerable populations.”

     

At COP21, industrialized countries committed to a minimum of US$100 billion per year through 2025 to help emerging markets carry out their energy transition, with funding coming from a mix of public and private sources. In this context, the BNP Paribas Group has set up several innovative funding solutions to help the United Nations achieve its 17 Sustainable Development Goals and make progress on the 2030 Agenda for Sustainable Development. 

Sustainable lending platforms

Reforestation in Indonesia

In 2016, BNP Paribas launched the Tropical Landscape Finance Facility (TLFF) in Indonesia , in partnership with the UN Environment Programme (UNEP), ADM Capital, the World Agroforestry Centre and local authorities. The goal is to create a platform for issuing green loans using private capital to finance sustainable economic development for farmers and restore deteriorating agricultural landscapes. The operation has become an enormous success. In February 2018, a vast rubber tree plantation received funding through the initiative.

Zero Budget Natural Farming in India

BNP Paribas and UNEP decided to replicate their model based on Zero Budget Natural Farming (ZBNF), a set of farming methods and a growing peasants’ movement in India. Faced with the agrarian crisis plaguing the country, Zero Budget Natural Farming aims to end the cycle of excessive debt for farmers by substantially reducing their production costs. This new type of natural farming also aims to rediscover more virtuous production methods that use less water, no pesticides or chemical fertilizers and also favor reforestation. A trial was launched in collaboration with 220,000 farmers. By setting up this funding platform, 6 million farmers have made the switch to ZBNF. 

Mobilizing $10 billion in green loans

During the One Planet Summit in December 2017, the Group, in collaboration with the United Nations Environment Programme, signed an agreement aiming to create financing instruments to drive sustainable growth in emerging markets. The UNEP and BNP Paribas will collaborate to identify suitable commercial projects in developing countries with measurable environmental and social impact, with a capital funding target of US$10 billion by 2025. 

Crédit photo : ©Jairson

Encouraging the development of renewable energies in rural areas

In 2018, BNP Paribas also teamed up with the foundation Goodplanet to put in place a vast carbon offsetting program for solidarity, which aims to install 13,000 biodigesters and improve living conditions for nearly 70,000 people. 

Biogas—a promising alternative

The agriculture industry generates several million metric tons of organic animal and plant waste every year. Most of it is burnt, or left to decompose in pits, adding to greenhouse gas emissions. However, these materials can be transformed into biogas via methanization. The process is carried out in tools called biodigesters, which in turn power household stoves. Each unit produces enough energy to cook daily meals for up to five people. Offering a great way to improve quality of life and the health of families and the environment, the solution has a bright future ahead of it. 

Changing fuels in rural homes—an imperative

India is home to 75 million family farms, 43% of which own more than four animals. At this level, a biodigester can produce enough gas to provide the energy needed to cook food for an average family. This is a major issue in a country where rural populations depend heavily on wood, a burdensome material that also produces considerable emissions, to cook their food. This challenge is even more critical as the World Health Organization indicates that indoor air quality is responsible for more than 4 million deaths worldwide every year. Aside from the disastrous health consequences, the environmental impact of this practice is equally concerning: continued burning of a non-renewable material contributes to climate change and the increase in greenhouse gas emissions. 

Encouraging and guiding agricultural development

Representing 6% of global GDP and 30% of jobs, agriculture is a key part of the economy. However, if it is not guided by suitable management, its development can have disastrous consequences on local communities, ecosystems and climate change. That’s why BNP Paribas has instituted a financing and investment policy dedicated to guiding the activities of this industry. Each policy applies to all its subsidiaries and business units worldwide.

Crédit photo header : ©mrmojo101 // ©Calin Stan

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