Agrifood systems are a major contributor to climate change and among the most climate-vulnerable sectors. Global agrifood systems contribute approximately 30% of greenhouse gas (GHG) emissions, making them the second-largest emitter after the energy sector. Agricultural producers, including fishers, landowners, smallholder farmers (SHFs), and small and medium enterprises (agri-SMEs), are among the most exposed to climate-related risks due to their direct reliance on natural resources and limited adaptive capacity. Climate change is already undermining their livelihoods through reduced crop yields, declining natural resource availability, and increasing volatility in production systems.

Transitioning agrifood systems holds substantial mitigation and adaptation opportunities. Investing in climate-smart practices across the value chain, from production and processing to distribution and consumption, can deliver significant mitigation and adaptation outcomes, while generating substantial co-benefits for gender equity, poverty reduction, and community health and nutrition. These interventions have the potential to fundamentally reshape extractive, post-industrial food systems and enable base-of-pyramid producers not only to withstand climate shocks but also to create and capture greater value from their production.

Climate-smart agrifood systems remain significantly underfinanced, constrained by fragmented markets, limited financial returns, and high perceived risks. While funding has grown steadily this decade, global climate finance for agrifood systems has reached only USD 95 billion (CLIC, 2025). This is merely 7.2% of the USD 1.31 trillion total climate finance across all sectors in 2021/22 (CPI, 2024), and 8.3% of the USD 1.1 trillion annual funding needed to align agrifood systems with a net zero (CPI & FAO, 2024). Existing capital tends to cluster in more established segments and regions—crops and livestock systems attracted over 40% of funding, while Western Europe and East Asia received nearly three-fourths of investment. In contrast, high-impact areas like nature-based solutions (NbS) and SHF adaptation remain critically underserved.

This underinvestment is not merely a function of capital volume, but also of mandate and adequacy of the financial instruments available. Governments must continue funding public goods that provide critical societal benefits but lack clear revenue models, such as low-emission infrastructure, rural road networks, watersheds, and soil fertility restoration. Private capital must accelerate the shift from high-emission models by investing in commercially viable, low-carbon solutions. However, while public and private actors must expand their roles, concessional capital is best suited for the critical missing middle: opportunities with substantial social and environmental impact but sub-commercial returns. These require de-risking, patient capital, and early-stage technical assistance (TA) to reach financial sustainability and unlock later-stage private investment.

Building on field evidence and expert insights, this playbook is designed to support concessional investors to strategically and effectively invest in climate-smart agrifood systems. Concessional investors, including donors, bilateral development agencies, foundations, and some development finance institutions (DFIs), are critical to transition agrifood systems. However, they often face complex trade-offs, including balancing impact and financial sustainability, allocating the right level of concessional funding, assessing pathways to sustainability, and setting appropriate performance and impact targets. This playbook is intended as a practical guide to inform concessional strategies, recognizing that each investor will adapt according to their mandate and risk appetite.

Our Blended Finance Playbook for Climate-Resilient Agrifood Systems, co-authored with ISF Advisors, outlines five high-impact investment ‘plays’ or practical strategies to drive systemic transformation for an agrifood systems transition. Each play is illustrated with real-world examples and actionable guidance to help capital providers align their investments with systemic priorities. The five investment strategies are as follows:

Deploying a system-level investment approach, with deep dives on Ireme Invest (Development Bank of Rwanda, Rwanda Green Fund) and the &Green Fund (SAIL Investments)

Supporting the large-scale restoration of natural capital assets, with deep dives on the Blue Alliance Blended Finance Facility (Blue Alliance Marine Protected Areas) and the Livelihoods Fund (Livelihoods Venture)

Strengthening climate-smart infrastructure shared across value chains, with deep dives on the Climate Investment Fund (CIF) (World Bank) and the Catalyst Fund Resilience I (Catalyst Ventures, BFA Global)

Expanding technical assistance for climate innovation, with deep dives on the Commercial Agriculture for Smallholders and Agribusinesses (CASA) (UK Foreign, Commonwealth, and Development Office) fund, and the Acumen Resilient Agriculture Fund (ARAF) (Acumen)

Incubating and scaling local financial intermediaries, with a deep dive on the Financing for Agri-SMEs in Africa (FASA) (Investisseurs & Partenaires) fund.

The playbook also equips investors with a practical framework to design, implement, and reduce the time-to-market of blended finance strategies. This includes guiding questions, decision points, and curated resources on investing in climate-smart agrifood systems. The framework seeks to encourage collective action and engagement across donors and development partners to scale effective models and enhance the enabling environment for climate investment.

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