The importance of fostering sustainable food production

Globally, the agri-food sector faces the challenge of feeding a world population estimated to reach around 10 billion people by 2050. This will mean increasing food production on a global scale by no less than 60% in the same period.

However, as FAO points out, this role does not come without costs, since agriculture and the use of forest land for cultivation are responsible for more than 30% of greenhouse gas emissions and the consumption of 70% of freshwater worldwide. Therefore, we must promote sustainable agriculture that guarantees global food security and ensures production in line with environmental requirements, respectful of the environment through the sustainable management of land, water and natural resources.

But this sustainable production must also meet social and ethical demands, be profitable for the producer (mostly family businesses and SMEs), and nurture economic and social development in rural areas, by providing an income, jobs and infrastructure.

The sustainable production must also meet social and ethical demands

BBVA contributes to these best practices by offering financing for the acquisition of no-till machinery that promotes soil care, energy-efficient equipment such as specific machinery for processing or packaging, or solar panels for electricity generation, efficient irrigation systems such as sprinkling or drip, and the construction of recycling plants or any biodiversity conservation project.

Ledesma, an agro-industrial company, is a good example of the multiple approaches to sustainability. First, it makes thorough use of sugarcane to produce food, renewable fuels (ethanol), sustainable paper (using cane fiber instead of fibers from trees), and recycles waste for biomass production. Second, it has a strong focus on the preservation of its environment and seeks to have a positive impact on its community, an area with a vulnerable population.

In Argentina, the agro-industrial sector is dominant. And Ledesma is an example of what is happening in our country. Sustainability in all its ESG dimension is becoming more relevant within the strategic axes of companies and other social players. For example, in line with global trends, sustainable financing has grown substantially in the last two years, with the development of regulatory frameworks in the capital market and the Sustainable Finance Protocol signed by banks, to name a few instances. As a reference in the capital market, we went from 1 ESG transaction in 2019, to 16 in the last 12 months.

BBVA Argentina has led this process in recent years through sustainable mobilization. The loan to Ledesma was a milestone since it was the first KPI-Linked loan, and the first loan with independent opinion for a company in Argentina. Sustainability is a strategic priority for BBVA, but also for all those companies that seek to help build a sustainable future for all, and to change their business models to maintain or increase their competitiveness.

For this reason, at BBVA we want to assist those who put sustainability at the center of their strategy, generating environmental and social impact through their own business models.