IN FOCUS: Transforming food systems

2021 was the year the world came together to agree on the actions needed to protect the future of our food systems. In September, United Nations Secretary-General António Guterres convened a Food Systems Summit as part of the Decade of Action to achieve the SDGs by 2030. This represented an unprecedented opportunity for us to share our unique experience and knowledge gained from working with the most vulnerable people in food systems, and to advocate for positive change on the global stage.

This meant not only speaking on behalf of the rural people we serve, but also – equally important – finding ways to allow them to speak directly to world leaders. We had to ensure that small-scale farmers and other rural people were at the centre of food systems transformation.

We also needed to inject our expertise and knowledge to advance action-oriented global commitments that would help bring about the required transformation.

The United Nations Food Systems Summit was a culmination of 18 months of work to increase IFAD’s visibility and positioning as the organization that puts rural people at the centre of food systems transformation.

Major initiatives in 2021 included:

● Through our interactive Rural Voices platform and our partnership with Farm Radio International, supported by Canada and World Vision, rural people had the opportunity to directly share their own challenges and solutions with the world. The On Air Dialogues: Listening to Rural People report, and the event that resulted from this, generated broad media coverage and social media engagement.

●Ahead of the summit, the Rural Development Report was launched, providing detailed recommendations on actions to transform food systems. The launch event, microsite, videos, ^► extensive social media campaign and top-tier media outreach ensured that IFAD was positioned as a thought leader in this process, offering real solutions to food systems challenges.

●We led the development of a coalition of public development banks along with our partners at Agence Française de Développement and Cassa Depositi e Prestiti to increase financing for the world’s poorest farmers. Subsequent to IFAD convening a dedicated plenary session on “Mobilizing trillions: Financing for impact” at the pre-summit in July, a group of public development banks announced the launch of a dedicated platform to speed up greener and more inclusive investments in food systems.

●At the summit itself, the speech made by the President of IFAD, which was amplified in the media and through social media channels, outlined IFAD’s strong call for action. The momentum continued in the days following the summit, including through IFAD’s Goodwill Ambassador Sabrina Elba carrying IFAD’s message to the stage of Global Citizen’s 24-hour concert. ^►

●From July to September, we produced a series of podcasts focusing on the summit, especially on the need to connect farmers.

In addition, IFAD played a variety of roles within the summit architecture. Most notably, we acted as the United Nations anchor agency for Action Track 4, “Advancing equitable livelihoods and value distribution”. This entailed being part of the leadership team for the action track and taking part in a wide range of activities related to content and coordination, such as identifying and developing game-changing solutions to promote equitable livelihoods. We also contributed to each of the other four action tracks through the engagement of IFAD senior technical staff specifically to ensure coordination and knowledge exchange across the tracks.

A major outcome of our work on Action Track 4 – and of the summit in general – was the establishment of the Coalition of Action on Decent Work and Living Incomes and Wages for All Food Systems Workers. IFAD is leading this coalition along with the International Labour Organization and CARE. The coalition is focused around the overarching objective of ensuring economic and social justice and the right to adequate and nutritious food for all food systems workers. This will involve creating viable opportunities to earn decent incomes through productive farming, fishing and pastoralism, and improving decent employment and entrepreneurship opportunities in on- and off-farm food system enterprises.

The theme of creating decent work and incomes is integral to IFAD’s work, through activities such as the following.

●Extending training, equipment and technology to women fishers in the Philippines to add value to their fish products.

“[Now] I can buy food, clothes for my children and school supplies. Before, it wasn’t like that." Ruperta Manadong Gagarin, participant in the Fisheries, Coastal Resources and Livelihood Project.^►

●Providing local farmers with secure market access by linking them to school feeding programmes in Guatemala, and improving the nutrition of schoolchildren in the process.

“One of the benefits we’ve seen is the security of a confirmed offer. That order is marked on the calendar.” Francisco Mejía, participant in a school feeding programme organized by IFAD with the Food and Agriculture Organization of the United Nations and World Food Programme in collaboration with the Government of Guatemala.

●Linking initiatives to restore local mangrove ecosystems with profitable new business activities, such as oyster farming and processing, and beekeeping, in Senegal.

“I like beekeeping because it is good for my family and myself. We can share what we earn and keep the rest for ourselves. We then use some of our savings to reforest the mangrove and protect it.” Bana Diouf, participant in the Agricultural Value Chains Support Project.

Our work through the Rural Poor Stimulus Facility continues to be an important part of our efforts to build the resilience of food systems during the pandemic. Since its establishment in April 2020, US$86 million has been approved to finance 55 single-country and 9 multi-country projects, together with US$19.3 million in cofinancing. In 2021, we completed quality assurance for 64 new project proposals and 44 additional financing requests under the Rural Poor Stimulus Facility, which will extend the benefits of the facility to millions more rural people.

Learning from IFAD’s operational work will inform our leadership of the coalition. It will provide an opportunity to bring IFAD’s work with small-scale farmers and other food systems workers to global audiences, and to advocate for the centrality of decent work for all food systems workers. This, in turn, will be integral to building the future food systems that work for all.

IFAD was also entrusted with a leadership role in addressing the area of finance as a “means of implementation” for food systems transformation, with a focus on addressing the funding gap and promoting sustainable and inclusive food systems finance.

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IN FOCUS: PUTTING RURAL PEOPLE AT THE CENTRE OF CLIMATE ACTION

COP26 was the most important global climate meeting since the 2015 United Nations Climate Change Conference, which resulted in the Paris Agreement. In 2015, countries pledged to keep the global temperature increase below 2°C. They set up five-year review cycles to evaluate their progress – COP26 was the first of those reviews.

The meeting came at a time when the first part of the sixth assessment report of the Intergovernmental Panel on Climate Change showed temperatures were rising faster than ever before. And the world’s small-scale farmers are already feeling the effects: more frequent extreme weather events are destroying crops, killing animals, reducing earnings and increasing conflicts over natural resources. Across the world, it is small-scale farmers who are on the front line as the impacts of climate change become more severe.

That’s why they need the world’s attention, just as the world needs them and their work – small-scale farmers produce around one third of the global food calories on less than 11 per cent of the world’s land. Making sure that this happened, that they received attention, was IFAD’s overarching objective at COP26.

IFAD actively participated in COP26, with a physical presence in Glasgow during the two weeks of the conference. Our strong presence on the ground, focused messaging, thought leadership and visibility in the global media helped to draw global attention to small-scale farmers and the need for increased investments in adaptation. Our participation at COP26 included the following.

●IFAD’s Goodwill Ambassadors, Idris and Sabrina Elba, delivered strong speeches in the plenary session ^► and at the official press conference, which led to significant coverage in top-tier media, with news outlets rating their participation one of the key COP moments, and crediting them with bringing small-scale farmers into the COP26 spotlight.

●The 31 events at the IFAD Pavilion attended by live and virtual audiences ensured that the voices of rural producers, youth and indigenous peoples, who are so often marginalized, were given a space in this global forum.

●The combination of a dedicated IFAD COP26 microsite and an extensive social media campaign reached an estimated audience of 4 million people, while ensuring regular, real-time and engaging updates on our key messages and visibility moments.

Our messaging on small-scale farming resonated with global audiences, generating more than 1,200 media stories in global publications. Importantly, our strong presence and outreach enabled us to drive home our main messages and play a thought leadership role by highlighting specialized knowledge and data related to climate change, small-scale agriculture and food systems. This included fresh evidence generated in our report What Can Smallholder Farmers Grow in a Warmer World?, launched in the lead-up to COP26.

It also included the knowledge gained from our ongoing work on the ground with rural people across the world, with climate action being integral to all our country strategies.

IFAD’s activities to build climate resilience are wide-ranging and depend on local conditions and contexts.

Examples include:

In 2021, IFAD launched a new and enhanced phase of ASAP, the Adaptation for Smallholder Agriculture Programme, to address the climate change drivers of food and nutrition insecurity and build the climate resilience of rural people, with a particular emphasis on targeting the most marginalized and vulnerable women, men, young people and indigenous communities. The new phase, ASAP+, will be integrated into IFAD’s programme of work in early 2022, while continuing to mobilize resources for its intended beneficiaries. It will build on the success of ASAP, IFAD’s flagship programme for channelling climate and environmental finance to small-scale farmers, which consists of 43 projects implemented in 41 countries. Indeed, during the Eleventh Replenishment of IFAD’s Resources period (2019-2021), around 35 per cent of our programme funds were climate finance, at US$1.2 billion, the greater part of this being for adaptation.

A growing number of IFAD-supported projects are promoting innovative ways for small-scale farmers to build their resilience to climate change. For example, in Kenya, the Climate-Resilient Agricultural Livelihoods Window (KCEP-CRAL) started an insurance pilot, designed specifically to meet the needs of farmers in the arid and semi-arid lands and to protect their rainfed crops against drought, floods, and notifiable pests and diseases. The project provides area yield index insurance, in which harvests are sampled and measured against historical norms. Compensation payouts are triggered for all farmers in a particular agro-ecological area if production falls below a set yield threshold. So far, over 40,000 farmers have signed up, over 11,500 of whom received compensation in 2021 as a consequence of droughts. The insurance payouts have been credited to farmers’ savings e-wallets, making the money available for the next planting season in March 2022. More local farmers are now joining the scheme. “In terms of this insurance … I got to know about it through my neighbour who is going to be paid because he was affected,” said Musa Omar Mlamba, a farmer and participant in KCEP-CRAL. “It has motivated me to pay it this time.”

Also in 2021, the IFAD Independent Office of Evaluation conducted a thematic evaluation of IFAD’s support for smallholder farmers’ adaptation to climate change. The evaluation report noted IFAD’s achievements, especially in mobilizing climate finance, mainstreaming climate change in projects and targeting the poorest and most vulnerable people. It also highlighted areas where IFAD can do more, especially related to going beyond risk management towards identifying livelihood opportunities for rural people linked to climate adaptation and mitigation – that is, going beyond a do-no-harm approach and building more on win-win solutions, such as those highlighted above in Georgia, Peru and Senegal.

In 2022, keeping climate adaptation and resilience high on the global policy agenda will be a priority, especially at COP27. To solidify the work that IFAD has done so far, we are already actively engaging with the Egyptian Presidency of COP27 to explore opportunities, including hosting and/or participating in high-level events focused on building coalitions among interested parties, and ensuring that the voices of rural people are heard and heeded at COP27 in Sharm El-Sheikh.

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IN FOCUS: Influencing global debates and advocating for investment in rural areas

The COVID-19 pandemic, food systems and climate change dominated the global agenda in 2021. These issues have profound impacts on the rural people we serve. Equally important, thriving rural communities and decent work and livelihood opportunities in rural areas are crucial aspects of building global resilience to these challenges.

Rural people and their work are key to helping us address the most pressing global issues.

We needed to deliver this narrative to global audiences, and we made significant efforts to raise IFAD’s visibility for this purpose and to play a thought leadership role in shaping global debates.

Throughout 2021, we ensured that the relevance of IFAD’s mission and the central role of small-scale farmers and other rural people were prominent in global discourses. As a testament to IFAD’s increased participation on the global stage, in 2021 IFAD’s President and senior management delivered more than 150 speeches at global events – a 25 per cent increase on 2020. Since 2019, the number of media stories featuring IFAD has increased annually, from approximately 13,000 to more than 17,000. Throughout 2021, IFAD’s experts were regularly featured in global top-tier media, demonstrating an increased recognition of IFAD as a thought leader on the global stage.

Major global events during the year included the United Nations Food Systems Summit and Pre-Summit, COP26, the 2021 Finance in Common Summit and the Nutrition for Growth Summit.

Our thought leadership role was underpinned by the launch of a series of authoritative studies on the issues under discussion at these global events. In addition to our flagship Rural Development Report Transforming Food Systems for Rural Prosperity, launched in the lead-up to the Summit, we published research reports linked to global climate debates. Both the technical report Nature-based Solutions and the series of climate risk analysis reports produced in partnership with the University of Cape Town What Can Smallholder Farmers Grow in a Warmer World?, were launched to coincide with COP26 and provided evidence to support our call for more investment in climate adaptation for small-scale farmers.

We are also bringing new ideas to debates on food systems transformation through the IFAD Innovation Talks, a series of learning sessions featuring innovative approaches developed by IFAD and its partners. In 2021, the topics covered included digital agriculture and opportunities for poor rural people, with the participation of Nobel Prize-winning economist Michael Kremer. Showcasing innovation is an intrinsic part of thought leadership, and other notable initiatives in this area in 2021 included the Sharefair – a virtual ideas marketplace – ^► that we organized and hosted at COP26 on “Geospatial tools and applications for climate investments” and our contribution to the Moonshots for Development working group of the innovation arms and laboratories of international financial institutions.

Furthermore, by giving rural people their own public platform in media interviews, ^► in video stories, ► at events and on the Rural Voices microsite, they were able to share their challenges and solutions first-hand. This gave them valuable opportunities to have a voice in the global discussions that have an impact on their lives.

During 2021, IFAD engaged prominently in a range of significant high-level forums, including the first-ever joint G20 Foreign Affairs and Development Ministerial Meetings in Matera in June, under the Presidency of Italy. The Matera Declaration includes a specific reference to IFAD and its central role in leading the Finance in Common Working Group on Financing Sustainable Food Systems.

Alongside and complementary to our G20 work on financing food systems, IFAD has led international partners in promoting the role of public development banks in mobilizing public and private sector financing for inclusive and nature-positive food systems transformation. This was supported by our role in organizing the Finance in Common Summit held in Rome, and underpins the multistakeholder coalition on public development banks, which was an outcome of the Food Systems Summit.was an outcome of the Food Systems Summit.

Late in the year, we played a prominent role at the Nutrition for Growth Summit, hosted by Japan, where we organized a number of events focused on maintaining the momentum in implementing the outcomes of the United Nations Food Systems Summit. This provided a valuable opportunity to showcase lessons from our activities, in particular on topics such as making food affordable and nutrition-sensitive agriculture.

Being a thought leader also means sharing knowledge and lessons from our projects, and 2021 has seen a number of milestones for South-South and Triangular Cooperation (SSTC) at IFAD. In support of our response to COVID-19 and to build on the increasing role of SSTC in fragile contexts, four new projects were approved under the China-IFAD SSTC Facility, to share knowledge on how to address pandemic challenges in rural areas. One of these is in the United Republic of Tanzania, where the project will strengthen the value chains of three high-demand crops (beans, cassava and sunflower) and benefit more than 100,000 farmers.

We also used new partnerships to boost the role of SSTC in sharing solutions for improved rural livelihoods. On the Rural Solutions Portal, 46 innovations from the South were published and a new section for partners was created, incorporating over 25 institutions that support SSTC activities across the world. In addition, we launched the Latin America and the Caribbean Knowledge Platform, a space within the IFAD website dedicated to sharing knowledge and promoting replicable good practices among the Spanish-speaking rural development practitioner community.

Increasingly, IFAD’s knowledge and research is influencing initiatives on the ground –carried out under IFAD-supported projects but also by our partners – to boost rural people’s livelihoods. Our Agricultural Research for Development (AR4D) activities – focused on improving the resilience and livelihoods of rural people through scientific research – produced a series of impressive results in 2021. These included the production and release of 11 high-yielding sorghum varieties and seven finger millet varieties in Kenya and the United Republic of Tanzania. In addition, thanks to AR4D research, five sorghum varieties were developed as commercial crops, benefiting 25,000 contract farmers for the brewing industry in Kenya and 15,000 in the United Republic of Tanzania.

During the year, we intensified efforts to integrate AR4D into IFAD country programmes. Some of the major contributions to programmes included solutions for the restoration of degraded land in East Africa and the Sahel, the development of climate-resilient crops in Senegal and Uganda, and the introduction of vaccines against pests in Mali.

While learning and knowledge inform our operations, we also prioritize learning from our operations. A series of reports from IFAD’s Independent Office of Evaluation showed how IFAD is addressing both the drivers and the consequences of fragility, highlighting our role in mitigating natural resource conflicts and in involving young people as agents of positive change. The Independent Office of Evaluation has adapted its approach to evaluations in the context of the COVID-19 pandemic, ^► and is continuing to provide valuable lessons to help us do even more for rural people.

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IN FOCUS: Working at the grassroots level to build rural communities from the bottom up

IFAD is unique in its commitment to work with rural people at the grassroots level and transform food systems and rural economies from the bottom up.

In 2021, we continued to put the most vulnerable, remote and marginalized people first and to use our distinctive knowledge of key rural development topics – among them rural finance, value chain development, land tenure, rural institutions, risk management and remittances – to achieve positive change.

WORKING WITH RURAL PEOPLE’S ORGANIZATIONS

Our partnerships with farmers’ organizations have been especially crucial in keeping food systems functioning as the pandemic continued to disrupt economies throughout 2021. These organizations have played a vital role in keeping food systems and rural livelihoods going, and we have been supporting their excellent work through the SAFE 2020 programme, which had reached approximately 300,000 small farms across Africa by the end of 2021.

The support provided by SAFE 2020 falls into two main categories. First, the programme provides vulnerable small-scale producers with productive inputs and finance so they can continue their activities. Second, the programme established communication platforms to disseminate accurate, up-to-date information on the pandemic, including advice on how to stay safe from the virus. “[Farmers] really turned to us as a trusted source of information, even though health issues are not at the core of our work,”says Norbert Tuyishime, from the Eastern Africa Farmers Federation.

Our work with farmers’ organizations is an important means of amplifying the voices and concerns of rural people in policy dialogues, both nationally and globally. For example, within the Joint Programme for the Sahel in Response to the Challenges of COVID-19, Conflict and Climate Change (SD3C), we have been working with regional pastoralist networks to share the findings of the report Listening to Herders.

Farmers’ organizations also continue to play an important role in informing IFAD’s operational activities. And the relationship goes both ways: strengthening and providing capacity to farmers’ organizations is a fundamental aspect of IFAD operations. One avenue for this symbiotic relationship is the IFAD-supported Farmers’ Organizations for Africa, Caribbean and Pacific programme, which provides dedicated institutional support to farmers’ organizations.

BUILDING FARMERS’ RESILIENCE THROUGH HOLISTIC APPROACHES TO RISK MANAGEMENT

Building resilience in the agricultural sector is becoming increasingly urgent. A holistic approach to agricultural risk management (ARM) must be integrated into food systems to assess the multitude of risks and their interrelations, and to identify and design risk management tools tailored to each context.

This is the approach adopted by the multi-donor Platform for Agricultural Risk Management (PARM) and the Insurance for Rural Resilience and Economic Development (INSURED) programme, which is managed by IFAD through PARM.

In 2021, PARM and INSURED expanded country activities, strengthening the abilities of local farmers to deal with the specific risks they faced, and alerting them to the benefits of insurance. For example, in Viet Nam, we began a training-for-trainers programme and developed a set of complementary materials about different types of insurance and their suitability for different agricultural subsectors. One of the main areas of focus for the training was improving farmer awareness and trust for better uptake of formal insurance. “The technical assistance from IFAD has come to us at the right time as we are formulating the National Agriculture and Rural Development Strategy 2021-2030 with Vision to 2040,”said Dr Tran Cong Thang, Director General of the Vietnamese Institute of Policy and Strategy for Agriculture and Rural Development. “The agriculture insurance development strategy recommended by IFAD is one of the important elements of this national strategy.”

SPEEDING UP RECOVERY AND RESILIENCE THROUGH DIGITAL AND FINANCIAL INCLUSION

Over 200 million migrant workers – and their families – have been among the most vulnerable to the economic fallout of the pandemic.

Despite projections, remittances continued to flow as a result of increased access to formal channels, thanks to an accelerated adoption of digital technology. In 2021, IFAD’s Financing Facility for Remittances (FFR), through the Platform for Remittances, Investments and Migrants’ Entrepreneurship in Africa (PRIME Africa) programme, expanded its operations to ensure that this continues to be the case. Through PRIME Africa, we set up new National Remittance Stakeholder Networks in Kenya, Morocco and Uganda, to join those in The Gambia, Ghana and Senegal. We worked closely with these networks throughout the year to promote ideas and innovations to reduce remittance costs, promote tailored financial services for migrants and their families, and create opportunities in rural communities in countries of origin.

In 2021, IFAD’s FFR was also active in shaping global debates on the topic of remittances, including through leading the technical support provided to the G20 Global Partnership for Financial Inclusion and the global campaign for the observance of the International Day of Family Remittances on 16 June, as well as through the IFAD-led Remittance Community Task Force and Global Forum on Remittances, Investment and Development. Along with the World Bank, we also released a major study, Resilience in the Market for International Remittances during the COVID-19 Crisis, endorsed by the G20 under the Italian Presidency.

EXPANDING OUR WORK ON OTHER KEY THEMES IN 2021

Throughout the year, we continued to expand our work on the issues that affect rural people’s lives the most.

●We are doing more to promote secure access to land and affordable finance for youth across Africa through our Rural Youth Employment Opportunities:

Support to Integrated Agribusiness Hubs programme. To aid implementation of the programme and contribute to the global knowledge base on this topic, we published a toolkit on “Access to land for rural youth employment and entrepreneurship”.

●We are using inclusive approaches to the adoption of digital technologies For example, in Viet Nam, digital salinity monitoring and forecasting systems are helping farmers protect their crops and more effectively plan their activities.

Renewable energy technologies are an increasing focus of many of our projects and we are pioneering approaches to make these technologies affordable and adaptable to small-scale agriculture. One avenue for this is through pilot projects with our partners, such as the Water and Energy for Food Grand Challenge and the regional Climate Innovation Hubs Project with the German Agency for International Cooperation. Considerable success in this sphere has already been achieved elsewhere in our portfolio and, in 2021, we produced a publication documenting successes in extending renewable technologies to small-scale farmers in Cambodia.

●During the year, we made major efforts to share our knowledge and lessons on livestock development, in particular its role in rural livelihoods.

For example, we organized events dedicated to issues such as “promoting closer cooperation between the human and animal health sectors and recognizing the links between humans, animals, and the environment” – an especially crucial issue as the world grapples with diseases that move between species.

●Our reimbursable technical assistance programme has covered a range of issues and shaped the development of national policies and approaches to building resilient rural communities in 2021.

In Mauritius, a revolutionary national seed policy providing solutions for small-scale farmers is entering into legislation. In Botswana, a reimbursable technical assistance programme that focused on small ruminants marks a critical step towards improving small-scale farmers’ self-sustainability, nutrition and market access.

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IN FOCUS: Bringing more investment into rural areas: a precondition for realizing ambitions for a more resilient and inclusive world

A RECORD IFAD REPLENISHMENT

IFAD is seeking to double and deepen its impact by 2030. A key part of delivering on this ambition will be our ability to expand the size of our investments in rural areas.

On 16 February 2021, IFAD Member States joined the final meeting of the IFAD12 Consultation, pledging their financial contributions for the programme period 2022-2024. The outcome at the end of the Consultations was around US$1.1 billion in core contributions, more than in any previous IFAD replenishment cycle.

The IFAD12 replenishment outcome represents a vision for IFAD, particularly in contributing to global recovery, rebuilding and resilience in a post-pandemic world.

If the final mobilization targets are achieved, it will enable us to expand our programme of work to US$11.1 billion in IFAD12, compared with the US$8.4 billion target of IFAD11.

The IFAD12 outcome agreement includes a number of important commitments, underscoring a shared vision for IFAD’s role in advancing global change. We will continue to concentrate our investments on the poorest people and the poorest countries, with 100 per cent of core IFAD resources directed at low-income countries and lower-middle-income countries. We will increase our focus on fragile countries. And IFAD-supported projects will continue to target people most likely to be left behind: women, young people, indigenous peoples and people with disabilities.

DIVERSIFYING OUR FUNDING BASE, WHILE CORE RESOURCES REMAIN THE BEDROCK OF OUR MODEL

A major IFAD12 commitment is that we will take a leadership role in ensuring that global climate finance reaches small-scale farmers and poor rural people. Indeed, climate finance is already a particular focus of our efforts to increase the size of our investments. During 2021, we continued to mobilize global climate resources from the Adaptation Fund, the Green Climate Fund (GCF) and the Global Environment Facility (GEF). Over the past three years (2019-2021), we have mobilized almost US$300 million from these sources.

We have committed to doing even more in the years ahead, building on the positive outcomes of COP26, where we advocated for greater investment in climate adaptation. Seizing this momentum, IFAD will redouble efforts to mobilize resources for ASAP+ through a two-pronged approach: first, by raising additional funds from Member States and, second, by developing a multi-country programme to be financed by the GCF and submitted to the GCF in 2023. Beyond ASAP+, IFAD will continue to maximize efforts to mobilize cofinancing from climate funds such as the Adaptation Fund, the GCF and the GEF, and from multilateral and bilateral partners.

While core replenishment contributions remain the foundation of IFAD’s capital, borrowing is fully integrated into our financial framework.

Building on a strong AA+ credit rating, IFAD seeks to complement core replenishment contributions with borrowed resources through the recently introduced Integrated Borrowing Framework, while also pursuing increased international cofinancing through mutually beneficial partnerships.

In June, we launched the Sustainable Development Finance Framework (SDFF), an entry point for selected impact investors with a demonstrated interest in supporting our mission. Funds raised in accordance with the SDFF will be entirely channelled to projects to support our target population: the poorest, most vulnerable and marginalized rural people.

In September 2021, another important step was taken in preparation for the full implementation of the Integrated Borrowing Framework: the Executive Board approved the establishment of IFAD’s Euro Medium-Term Note Programme, which is a standardized set of documents under which IFAD will be issuing its private placements.

All of this activity is to ensure that IFAD is ready for its inaugural transaction under the Integrated Borrowing Framework in 2022, in line with the borrowing needed to support the IFAD12 target programme of loans and grants.

GOING FURTHER TO GUARANTEE OUR INVESTMENTS ARE ALIGNED WITH OUR MANDATE AND CORE VALUES

As we diversify our funding base and shift to a new financial model, it is even more important that we ensure that 100 per cent of the investments we are involved in are directed, in a sustainable manner, towards what IFAD does: that is, improves the lives of poor rural people.

That is why we are solidifying our commitment to demonstrate the positive impacts of our investments on the SDGs. Indeed, we have taken the important initiative of setting treasury investment policies and targets in order to shape collective outcomes in line with the SDGs.

We are also integrating environmental, social and governance considerations into the investing of treasury assets. This was central to the latest annual update of IFAD’s Investment Policy Statement. Indeed, as a responsible investor, IFAD actively advocates for sustainable investment strategies and strictly adheres to the Ten Principles of the United Nations Global Compact. We systematically exclude products, services and business practices that are incompatible with the fundamental principles of human rights, labour, the environment and anti-corruption of the United Nations Global Compact. Applicable sanctions from the United Nations Security Council Consolidated List of sanctioned individuals and entities are likewise used to screen IFAD’s treasury investments.

Furthermore, as a way of steering towards the best performers among suitable investors, we are building up our investments in green bonds and other thematic environmental, social and governance securities.

Also in 2021, we developed an IFAD investor presentation to introduce our organization, mandate, and business and financial models to a wider audience.

The year 2021 marked the beginning of the implementation of our first-ever regional lending operation: the Joint Programme for the Sahel in Response to the Challenges of COVID-19, Conflict and Climate Change (SD3C). The design, drafting and negotiation of the programme required extensive work by IFAD’s legal experts, especially in drafting and negotiating financing agreements with six different participating countries, as well as our partners – the Food and Agriculture Organization of the United Nations, the World Food Programme and the Secretariat of the G5 Sahel. All agreements were signed in February 2021 during a signature ceremony in Nouakchott, Mauritania.

Ensuring that our investments reach their intended beneficiaries also means safeguarding against financial crime. In this area, we became the first United Nations agency to develop an anti-money laundering and countering the financing of terrorism policy, ^► to be implemented by a new Financial Crime Unit. Under this policy, in 2021, we implemented a range of measures to combat financial crime, such as automated daily sanctions screening, anti-money laundering, counter-terrorism financing screening, know-your-customer questionnaires for new vendors, deep-dive enhanced due diligence assessments and reporting based on industry databases.

We are also using new technologies to trace our investments. Our TRACE Blockchain pilot traces funds from donor to farmer, while capturing development results directly from farmers using mobile phones, speeding up payments and ensuring compliance with anti-money-laundering standards.

Realizing the ambitions of our Private Sector Financing Programme has required much diligence and cooperation across IFAD. In 2021, the first non-sovereign private sector operation (NSO) debt transaction in IFAD’s history – under the Babban Gona project in Nigeria – was supported by IFAD’s legal team. So too were several other NSO transactions during the year, as we began delivering on the promise of the Private Sector Financing Programme. Furthermore, an NSO quality assurance tool was introduced to comprehensively assess quality at the design stage of NSO project appraisal reports and to support strategic decision-making. The tool is based on the IFAD principles of engagement with the private sector and screening criteria as specified in the Private Sector Engagement Strategy 2019-2024. It takes into account, among other issues, country ownership, complementarity with the programme of loans and grants, compliance with IFAD’s Rural Finance Policy, avoidance of control, and promotion of transparency and accountability.

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IN FOCUS: Leading by example: modelling change through IFAD’s organizational culture

All of IFAD’s work is geared towards contributing to a world that is fairer, more inclusive and more sustainable, and a world where hunger and poverty have been eradicated. This is clearly a huge task that requires us to work across many topics, with many partners, and to bring a range of innovative tools and approaches.

But we also need to model the change we want to see in the way we do business. We need to walk the walk on inclusion, equity and sustainability. This means meeting the highest standards of organizational culture.

AN ORGANIZATIONAL CULTURE BUILT AROUND OUR CORE VALUES

Diversity, equity and inclusion (DEI) are core tenets of IFAD’s identity, and we actively promote them throughout our workplace. For this purpose, we established a dedicated DEI Working Group in 2021 to embed DEI in every aspect of IFAD’s workplace culture and within IFAD’s workforce. This will result in a strengthened culture of mutual respect and accountability and, in turn, in a safe and ethical work environment for all IFAD staff. Ultimately, it will ensure that everyone can contribute to their fullest potential, drawing on their unique abilities, to help achieve IFAD’s mandate.

A precondition for an inclusive and welcoming working environment where everyone can thrive is zero tolerance of discrimination, racism and all forms of hate speech. IFAD’s multidivisional task force on hate speech, racism and discrimination leads our response to this global scourge. In 2021, the task force conducted an IFAD-wide survey to assess experiences of these issues and to determine what actions are needed to ensure that they have no place at IFAD.

We also continued to focus on combating sexual harassment, exploitation and abuse in the workplace and everywhere that IFAD works. Mandatory training for all individuals holding an employment contract with IFAD was a continued priority during the year. In 2021, we also rolled out a groundbreaking new training module on sexual harassment in the workplace. In addition, the IFAD Ethics Office provided extensive face-to-face and virtual training on sexual harassment, exploitation and abuse to implementation partners of IFAD-supported operations.

We also launched the Ethics in Action programme, a dedicated space on the IFAD internal log-on platform where videos and other communications materials on ethical themes are shared with the IFAD-wide workforce, wherever they may be across the world. The programme serves to reinforce required ethical standards and to provide concrete examples displaying IFAD’s core values.

Sustainability is another area where we see ourselves leading by example, and we went even further on this issue in 2021. We cut our energy use and water consumption by harvesting renewable energy, collecting rainwater, reducing non-recyclable waste and decreasing paper usage.

We also increased biodiversity in our grounds by adding bees, other pollinators, and wild flowers. These and other initiatives have enabled us to maintain our platinum certification for Leadership in Energy and Environmental Design (LEED), ^► the highest green building certification available worldwide.

OUR CULTURE IS DRIVEN BY OUR PEOPLE

Being leaders in modelling positive change requires bringing the right people to IFAD. To do this, we have changed the way we look at recruitment: from previously assessing candidates for one position only, to assessing them on their fitness for a career at IFAD. And we’re investing more in finding the right people by establishing IFAD as an “employer of choice”. In 2021, we established partnerships with online job boards and recruitment advertising agencies, and IFAD human resources representatives participated in a series of virtual career fairs throughout the year.

Nurturing the leaders of the future is another aspect of our approach. Early in 2021, we launched an initiative called “Fireside Chats with IFAD Leaders”. These events provide a space for open exchange and informal conversations, led by IFAD’s younger staff members, where IFAD leaders provide words of advice. To date, members of the IFAD Youth Network have interviewed seven leaders, including a special event with the President of IFAD ^► in December 2021.

In addition, we are actively promoting opportunities for young innovators at IFAD to harness innovation and intergenerational partnerships through the IFAD and United Nations System Staff College mentoring partnerships programme using the UN Innovation Toolkit.

GETTING CLOSER TO THE RURAL PEOPLE WE SERVE

While getting the right people into IFAD is indispensable in maintaining and building an organizational culture that models the positive change we want to see, it is not enough. We need to bring those people closer to the rural people we serve. Despite the pandemic, our efforts towards decentralization are continuing at speed. With the goal of having 45 per cent of staff based in the field by 2023, recruitment activity has experienced a surge in national professional, international professional and locally recruited administrative staff positions in IFAD Country Offices.

We also took several steps to strengthen support for IFAD staff in the field and enhance our field activities. We set up new regional centres and reorganized a number of offices to ensure harmonization of functions. The establishment of two regional offices – in Nairobi, Kenya, overseeing the East and Southern Africa region, and in Abidjan, Côte d’Ivoire, overseeing the West and Central Africa region – increased effectiveness by clustering functions. Importantly, our increased field support was focused around alignment with the United Nations reform and efficiency agendas. For example, our field offices piloted a system- wide tool – the United Nations Booking Hub – that is dedicated to resource- sharing across United Nations agencies.

ADAPTING AND INNOVATING TO MEET THE CHALLENGES OF A CHANGING WORLD

As IFAD moves towards a more decentralized structure, we must recognize the new challenges emerging from links between risks – strategic, operational (including fraud and corruption), information and communications technology risks, cybersecurity or business continuity management risks. In response, we have rolled out new governance initiatives, instruments and tools to manage the risks that IFAD faces, centred on the gathering and processing of risk data to support risk-informed decisions and build effective risk processes (i.e. identification, analysis, prioritization, control and monitoring). Indeed, under the new overarching Enterprise Risk Management Policy, our integrated project risk matrix generates reliable data and analyses to support more robust risk management and oversight and to further develop an early warning system. Our immediate focus when reviewing the data generated has been to detect and analyse any variances in project performance and to identify – if any – areas where risk reporting and management can be further improved.

The approval and operationalization of our industry best-practice Enterprise Risk Management Framework was a major 2021 milestone. Building on this, we are implementing an effective risk management model that has seen, within the oversight function, the creation of dedicated units to identify, assess and monitor risks, including those related to programme delivery and those associated with decentralization. We also continue to strengthen the controllership function under our Internal Control Framework, provide tools for IFAD offices and divisions to map, monitor and implement efficiencies, and certify internal controls in business processes.

Organizational culture is also bound up in ceaseless efforts to improve efficiency. IFAD’s Enhanced Efficiency and Resource Management initiative aims to optimize the use of resources by defining a revised business model based on improved information and management processes. To enable us to do this, we conducted a thorough analysis of efficiency at peer institutions by reviewing practices in both United Nations organizations and international financial institutions. Based on this, we developed a proposal to enhance efficiency and resource management within IFAD. The initiative will optimize the use of organizational resources, with a stronger focus on results. It will also provide increased transparency on costs, ensuring that no additional bureaucracy is added.

Enhanced efficiency is one of the benefits of the reform of our project financial management function. Over the course of the year, we laid the groundwork to enable us to evolve from an approach that is largely rule-based and transactional to one that is more principle-based and agile, with the aim of creating efficiencies, investing in country financial management systems and staff, and ensuring alignment with international best practice. In the medium to longer term, this will alleviate the burden placed on borrowers and recipients in running parallel ring-fenced systems, and will pave the way for more investments in improving transparency. Other key aspects of this reform include enhancements in financial discipline through a more robust financial reporting and monitoring relationship, introducing training to ensure that project staff are appropriately trained, and overhauling our financial management policies and procedures so that they are both principle-based and fully integrated in IFAD’s wider operational manuals.

Achieving continual improvements in efficiency requires innovation. The second IFAD Innovation Challenge was launched at the end of 2021 and will support ideas that bring innovations into our work and business practices, with a specific track dedicated to “innovations for culture change”. Winners of the Innovation Challenge will receive not only funding to test and develop their ideas, but also coaching in behavioural sciences, innovation and storytelling to accelerate innovation.

THE PATH TO DIGITAL TRANSFORMATION

We continue to focus on innovation and modern technologies to find solutions to business challenges – something that became increasingly important in 2021. This has meant sustaining a high level of digital services for IFAD clients. In 2021, the IFAD Client Portal remained open for business with all of IFAD’s beneficiary countries, eclipsing the target set to on-board 75 per cent of countries, and with all prepared eligible countries active on the platform today. It has also meant the first-ever full virtual Governing Council for IFAD’s membership, thanks to the use of the latest conference and streaming technology.

For IFAD’s global workforce, a robust digital infrastructure ensured the availability of all corporate systems and tools 24/7, with zero disruptions for the workforce regardless of their geographical location. The workforce remained productive and connected, engaged in thousands of virtual meetings, all while vital exchanges continued to take place virtually to ensure no disruption of communication and support between management and staff. 

Further, we initiated our first-ever corporate automation programme. Initiating the programme during the pandemic underlined the critical role that automation technology can play at IFAD. During 2021, 11 automation pilots were launched, impacting areas ranging from operations to financial management, with the vast majority deemed successful and fit for mainstreaming. The using of smart robotic process automation technology, or virtual agents and chatbots, enabled these technologies to be seamlessly embedded into IFAD’s day-to-day work.

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