COP27: SMEs Play A Critical Role At The Nexus of Climate And Nutrition

On the continent of Africa, small and medium enterprises (SMEs) are responsible for the delivery of at least 75% of all food consumed, particularly among the poor. With their critical location— at the crossroads of climate and nutrition— SMEs have the power to merge nutrition and affordable diets with climate resilience, while supporting the livelihoods of smallholder farmers who are among the most climate-vulnerable groups, and comprise at least 65% of all farmers in Africa.

This was a major takeaway from panels that reflected on the nexus of healthy diets and climate resilience, on the “Enhance” themed day at the Food Systems Pavilion at COP27 in Sharm El Sheikh, Egypt— the first UN climate conference to make a strategic connection between climate and nutrition.

During the sessions, panelists reflected on the opportunity to empower farmers and SMEs to deliver on the nutrition and climate objectives of the Sustainable Development Goals (SDGs).

“The vast majority of Africans— approximately three-quarters— cannot afford a healthy diet,” said panelist Michael Ojo of the Nigeria office of the Global Alliance of Improved Nutrition (GAIN).

According to Ojo, SMEs play an important role in making healthy and affordable foods accessible. They can also help countries to meet SDG targets associated with poverty, hunger and climate.

But despite their importance to food security and sustainability, SMEs are typically too small to have a loud-enough voice or to be integrated within national policy making discussions.

SMEs often fall in “the hidden middle” with respect to their size, making them too big for micro-finance and too small to be eligible for formal finance or prioritization at a national policy-level, said Lawrence Haddad, Executive Director of GAIN.

Panelist, Dick Kamuganga of the Uganda National Farmers Federation, upheld that climate cannot be divorced from nutrition and stressed that two major needs of the five-million smallholder farmers that he represents are the transfer of climate-related technical knowledge as well as access to finance.

And of course there is also the policy element of the equation.

Cecil Havekamp of United Nations Sustainable Development Solutions Network heads up a team that is looking at 24 nationally determined contributions associated with food and land use, with the objective of mobilizing action to integrate food and climate goals.

“The Agriculture, Forestry and Other Land Uses (AFOLU) sector is critical to increasing land-based carbon removals and reducing non-CO2 GHG emissions,” reads a policy brief produced by the Food and Land Use Coalition, which was presented by Havekamp. “Sectoral targets and a clear action map are often lacking in current nationally determined contribution (NDCs) and net zero targets.”

Lawrence Haddad drew a picture of the required recipe for change, using the term “baked in” to depict the integrated approach of accounting for both climate and nutrition in policy and business decisions.

“The nutrition community should not get complacent about their contributions to climate. Healthy diets are not always climate aware,” said Haddad, as he stressed that “the climate folks” also need to embrace nutrition in the movement.

“Climate and nutrition should be ‘baked in’ at a policy level,” he said. Nutrition should be included in NDCs.”

“Climate and malnutrition are two sides of the same coin,” echoed Saskia Osendarp, Executive Director of the Micro-nutrient Forum, who spoke of “the new era of cooperation between climate and nutrition.”

Simon O’Connell CEO, SNV Netherlands Development Organization spoke of the necessity for climate resilient, localized value chains that bring farmers and consumers closer together through innovation.

Panelists also stressed on the need to create better partnerships that help to de-risk finance for small and medium enterprises.

“Climate-sensitive nutrition must be part of ESG investing and those investments should be directed at both large food companies and SMEs,” said Greg S Garrett, Executive Director of Access to Nutrition Initiative (ATNI) which is providing a bridge between investors and small businesses via data-driven bench marking.

ATNI’s investment eco-system is driven by a bench marking tool that includes 27 indicators related to management, product portfolio, labeling, workforce and finance and favors SMEs that sell a nutritious food product (as defined by nutritional profile models), are climate sensitive and have a strong business model.

ATNI is currently working with 81 institutional investors who have pledged to invest in nutrition, and is working to attract dozens more impact investors who would invest in its growing portfolio of SMEs in emerging markets.

In 2021, ATNI worked with more than forty SMEs in Bangladesh in Nigeria and hopes to expand its index to six countries— five in Sub-Saharan Africa and one in South Asia— in 2022.

At a national level, the Government of Egypt’s Initiative for Climate and Nutrition (ICAN) is an example of what panelists referred to as the new frontier of the integration of climate and nutrition policy— or Haddad’s “baked in” policy approach that factors in nutrition, climate and investment.

“We need stronger partnerships, sustainable financing…,” summarized Sharan Burrow, General Secretary of the International Trade Union Confederation who moderated one of the sessions. “We need everyone from those doing the work, to those supporting them to be on board.”

“How effectively you connect [climate and nutrition],” asserted Haddad, “is all about humility and leadership.”