Agri-food Transition Principles Discussion Paper

This discussion paper by the Climate Bonds Initiative proposes a framework for credible transition finance in the agri-food sector. It argues that current transition instruments, such as Sustainability-Linked Bonds (SLBs), often lack ambition and fail to account for scope 3 emissions. To address this, the paper applies five 'Credible Transition Principles' and five 'Hallmarks' for transforming companies to ensure alignment with 1.5°C climate targets, science-based pathways, and broader sustainability goals including biodiversity and just transition.

• Agri-food systems contribute significantly to global environmental degradation, accounting for 31% of anthropogenic greenhouse gas (GHG) emissions and nearly 90% of annual global deforestation.
• Existing agri-food transition finance instruments, specifically Sustainability-Linked Bonds (SLBs) and Use of Proceeds (UoP) bonds, are often viewed as unambitious and unreliable due to a lack of scope 3 emissions coverage and gaps between corporate pledges and actual actions.
• For many agri-food companies, scope 3 emissions represent the vast majority of their total carbon footprint, making their exclusion from performance targets a fundamental failure in demonstrating meaningful change. For example, scope 3 emissions account for 90% of Tesco's, 96% of General Mills', and 98.9% of DLG Group's total emissions.
• Climate Bonds proposes five 'Credible Transition Principles' for agri-food: alignment with a 1.5-degree trajectory, basing goals on science, prioritizing internal decarbonization over offsets (including scope 3 emissions), prioritizing technological viability over economic competitiveness, and requiring concrete action over pledges.
• The paper introduces five 'Hallmarks' to evaluate the credibility of a company's transition plan: Paris-aligned targets, robust plans (including financing and governance), implementation action (CapEx/OpEx), internal monitoring, and external reporting with independent verification.
• Economic activities in the agri-food sector are categorized by their alignment with net zero: 'near zero' (e.g., landscape restoration), 'pathway to net zero' (e.g., crop production), 'interim' (e.g., intensive livestock production), and 'stranded' (e.g., fossil fuel fertiliser manufacture).
• Technological viability is emphasized as the primary driver for decarbonization pathways, regardless of current cost. Examples include precision farming, feed additives to reduce enteric methane, and green ammonia as a substitute for fossil gas-based nitrogenous fertilisers.
• The Agriculture, Forestry and Land Use (AFOLU) sector is uniquely positioned to reach net zero before 2050 and provide a negative emissions balance through carbon sequestration, which is vital for maintaining global net zero beyond 2050.
• A comprehensive agri-food transition must extend beyond GHG emissions to include other critical sustainability goals: land use change, biodiversity, water use and quality, food loss and waste, circularity, and just transition.

APA

Climate Bonds Initiative (2022). Agri-food Transition Principles Discussion Paper. https://www.climatebonds.net/files/drupal-files/files/agri-food-transition-principles-fullv2_0-141122.pdf

Chicago

Climate Bonds Initiative. Agri-food Transition Principles Discussion Paper. 2022. https://www.climatebonds.net/files/drupal-files/files/agri-food-transition-principles-fullv2_0-141122.pdf.

Wikipedia

{{cite report |author=Climate Bonds Initiative |title=Agri-food Transition Principles Discussion Paper |date=7 December 2022 |url=https://www.climatebonds.net/files/drupal-files/files/agri-food-transition-principles-fullv2_0-141122.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatebondsinitiative2022agrifood, author = {{Climate Bonds Initiative}}, title = {{Agri-food Transition Principles Discussion Paper}}, institution = {Climate Bonds Initiative}, year = {2022}, month = dec, url = {https://www.climatebonds.net/files/drupal-files/files/agri-food-transition-principles-fullv2_0-141122.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }