June 10, 2021, Zurich, Switzerland – WWF and South Pole today launched the Landscape Resilience Fund (LRF) to tackle the impact of climate change head-on. With the support of the Global Environment Facility and the commitment of Chanel as anchor investor, the fund is ready to rally more institutions to invest in a resilient future.
The LRF, which will be managed by South Pole, was co-developed by South Pole and WWF. The new fund is an independent non-profit foundation under Swiss law and is driven by the objective to generate the maximum possible level of environmental and social impact. Anchor investor Chanel is committing USD 25 million to complement finance from the Global Environment Facility's Least Developed Countries Fund and Special Climate Change Fund.
The LRF aims to mobilize USD 100 million by 2025 for climate adaptation projects that support more sustainable agricultural and forestry supply chains and that protect smallholder farmers in developing countries. Smallholders produce roughly 80% of global food supply. They play a critical role in ensuring the resilience of corporate value chains against external shocks. They are also the most exposed to the natural hazards of a warming world, putting entire economies in peril and risking the breakdown of global food supplies.
"By investing in SMEs and local communities in developing countries, the Landscape Resilience Fund is fostering shared understanding and effective implementation of actions which enhance climate resilience and human well-being – landscape by landscape, SME by SME, village by village," said Stefan Schwager, President of the Foundation “Landscape Resilience Fund", former Global Environment Facility Council member, board member of the Green Climate Fund and former head of environmental finance in the Swiss government.
Despite the intensifying frequency and impact of physical climate risks, only 5% of climate finance goes towards climate adaptation – and virtually none of it comes from the private sector, a problem that the Landscape Resilience Fund seeks to tackle.
“The numbers speak for themselves: climate adaptation remains grossly underfinanced, even while extreme weather events continue to disrupt societies and supply chains. Now is the time for companies to show leadership and join us in shaping the future of transformative climate adaptation finance through the Landscape Resilience Fund," said Urs Dieterich, Managing Director, LRF, and Land Use Fund Manager at South Pole.
This innovative fund blends public and private funding and provides a scalable way to finance sustainable solutions that build resilience to a changing climate. The fund encompasses three pillars: strengthening an integrated landscape approach; providing technical assistance for small and medium-sized enterprises (SMEs) towards investment readiness; and concessional loans to SMEs. The LRF was recognised as a winner of the 2019 Global Environment Facility Challenge Program for Adaptation Innovation.
“The Landscape Resilience Fund is an excellent example of the sort of innovative partnership that is so urgently needed to address the increasingly devastating impacts of climate change and biodiversity loss. This is a compelling model of blending public and private finance to attract large-scale investment for localized adaptation action, economic recovery, and global supply chain resilience. The Landscape Resilience Fund will help countries in their green, blue, clean and resilient recovery from the pandemic," said Carlos Manuel Rodriguez, CEO and Chairperson of the Global Environment Facility.
The LRF will provide financing and technical assistance to SMEs that work with smallholders in vulnerable landscapes – such as cocoa growers and rattan harvesters – and help them access better farming materials, such as drought-resistant seeds, as well as training and finance. Repaid loans will be re-invested in other SMEs, creating a self-sustaining, efficient financing tool for adaptation. Financial returns will not be disbursed to the funders, who instead will see positive environmental and social benefits from the projects.
The LRF's support for SMEs will be reinforced by an integrated and sustainable landscape approach, which means that farmers and landscapes are intertwined and support each other. Project implementation under such an approach builds on strong stakeholder engagement and considers a diverse set of objectives when planning interventions – such as community well-being, a thriving environment, and biodiversity conservation. It also helps mitigate climate change by addressing the drivers of deforestation, and increases carbon sequestration through climate-smart agriculture practices, such as multi-use crops and agroforestry.
"Climate change induces wide-ranging and significant local and global impacts. Even with substantial reductions in future greenhouse gas emissions, these impacts will escalate over the next decades. Therefore, we urgently need financing beyond climate change mitigation. Action for climate and ecosystem-based adaptation - through the Landscape Resilience Fund - brings a “triple dividend" of avoided losses, economic benefits, as well as social and environmental impacts," said Simone Stammbach, Head Global Network Development and Executive Board Member of WWF Switzerland.
By committing funds to the LRF, companies can go above and beyond their own climate commitments, including actions to reduce their own emissions, and support climate adaptation projects with immediate impact on the ground. Such climate leaders can expand their knowledge about building climate resilience into their own supply chains.
“Chanel is proud to be supporting the Landscape Resilience Fund as anchor investor and we look forward to working together. This reflects Chanel's commitment to support the most vulnerable communities and landscapes to adapt to climate change, which is vital to help build resilience in global supply chains. There has never been a more critical time for the private sector to step up and help close the investment gap needed for effective climate adaptation. Chanel's involvement in the LRF provides an opportunity to explore different approaches and methodologies that could help advance changes in our own supply chain and business practices, as we progress on our own business transformation," said Andrea d'Avack, Chief Sustainability Officer at Chanel.
The LRF welcomes interested corporate and public funders to get in touch. The fund is global in scope and has a strong pipeline of over 20 SMEs/projects focused on sustainable agriculture and forestry located in Sub-Saharan Africa, Southeast Asia, and Latin America.
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Note to editors
For more information about the Landscape Resilience Fund, please visit: https://www.southpole.com/clients/case-study-landscape-resilience-fund
Isabel Hagbrink, Director of Communications, South Pole
About the LRF: The Landscape Resilience Fund (LRF) is an independent Swiss foundation, co-developed by South Pole, acting as fund manager, and the World Wide Fund for Nature (WWF), as an advisor and service provider. The LRF finances small businesses and projects applying sustainable land management, and supports climate adaptation on the landscape level.
About South Pole: South Pole, recognised by the World Economic Forum as a Social Enterprise, has been at the forefront of decarbonization since 2006. With its global Climate Solutions platform, South Pole develops and implements comprehensive strategies that turn climate action into long-term business opportunities for companies, governments and organizations around the world. South Pole is also a leading project developer, and has provided nearly 1,000 projects in over 50 countries with climate finance to reduce over a gigaton of CO2 emissions, and to provide social benefits to less privileged communities who are particularly vulnerable to climate change.
About WWF (World Wide Fund for Nature)
WWF is one of the world's largest and most respected independent conservation organizations, with over 5 million supporters and a global network active in over 100 countries. WWF's mission is to stop the degradation of the earth's natural environment and to build a future in which humans live in harmony with nature, by conserving the world's biological diversity, ensuring that the use of renewable natural resources is sustainable, and promoting the reduction of pollution and wasteful consumption. WWF-US is an accredited GEF Agency and is supporting South Pole in the design and implementation of the GEF-funded investment readiness for the LRF.
About the Global Environment Facility
The Global Environment Facility (GEF) was established 30 years ago on the eve of the Rio Earth Summit to tackle our planet's most pressing environmental problems. Since then, it has provided more than $21.5 billion in grants and mobilized an additional $117 billion in co-financing for more than 5,000 projects and programs. The GEF is the largest multilateral trust fund focused on enabling developing countries to invest in nature, and supports the implementation of major international environmental conventions including on biodiversity, climate change, chemicals, and desertification. It brings together 184 member governments in addition to civil society, international organization, and private sector partners. Through its Small Grants Programme, the GEF has provided support to more than 25,000 civil society and community initiatives in 135 countries.