Sustainable investment has been highlighted as the “only solution” to the ever-growing demand for food, in a report by global investment boutique, Sustainable Asset Management (SAM).
The study, called Harvesting Opportunities for a Sustainable Food Supply, examines the trends and obstacles surrounding the global food production industry.
It claims that any hopes of meeting the increased global demand for food are currently being quashed by “declining productivity and limited opportunities for expansion of agricultural land”, and picks out sustainable investment as key in solving the problem.
“Food security is an issue that is set to increase in importance over the coming decades”, said Jürgen Siemer, senior analyst at SAM.
“Population growth and the continuing improvement in diets around the world are things to celebrate; but they bring their own challenges.
“The only solution to these challenges is increasing investment in sustainable food supply.”
As food demand increases, owning to the sharp rise in global population, available space for agricultural land is becoming evidently sparser. The graph below charts compares the steady decline of agricultural land per capita with the increasing demand for food.
But there is a solution: sustainable investment in agribusiness. SAM attributes the sector’s attractiveness to three key reasons: its “ability to offer diversification to portfolios, protection against inflation risk and exposure to emerging markets”.
Siemer added, “Agribusiness has no choice but to be sustainable.
“Companies that operate sustainably tend to have more reliable supply chains, are better prepared to maintain their social license to operate, experience less volatility in their profits and losses, and are therefore better positioned to deliver greater shareholder value.”
The requirements that emerge from SAM’s report chime well with previous studies into global population and consumption, including ones by the Royal Society and the WWF. One of the authors of the Royal Society report, Jules Pretty, spoke with Blue & Green Tomorrow in May about the need for swift action in both areas.
“If [population and consumption] both go up”, he summarised, “then we’re in real trouble.”
SAM’s report says that food production might have to increase by 70% by 2050 to meet the bloated demand. It’s up to us to feed ourselves, our children and our grandchildren in a sustainable, balanced manner.
Take a look at our Guide to Sustainable Investment for ways in which your finances can be aligned towards tackling one of the world’s most urgent problems.