by Tytti Kaasinen, Head of Stewardship & Risk Engagement at GES
The first part of the blog underlined how food is the cause of all sorts of problems and negative impacts. But here comes the good news: sure, things are a bit gloomy and systems-thinking needed to address the food security challenge will be no easy feat, but experts reassure that we can feed the world within planetary boundaries and the EAT Forum confirmed that there are various encouraging developments underway. Many companies and individuals are coming up with innovative and/or technical solutions and authorities have woken up to the need to act.
The key changes most actors highlight as necessary include dietary shifts (towards plant-based but also e.g. improving the nutrition quality of packaged foods and enabling shoppers to make informed and sustainable choices), reduction in food loss and waste, better functioning trade, strict management of land and oceans and a sustainable intensification of production systems to close yield gaps. Needless to say, these changes present both material risks and opportunities for investors and they should hence be considered when analysing companies’ prospects as well as discussed in collaborative and one-to-one engagements. One example of an investor network focusing on food-related profitability and returns is FAIRR, which GES is a member of. FAIRR assesses risks associated with animal factory farming and encourages e.g. food producers to limit antibiotic use in livestock supply chains, and food retailers to strategically diversify their protein sources.
Many of the changes (must) happen on the individual level, however food is an emotive and personal issue and it is hard for policy-makers trying to regulate how people eat. Factors at play include culture, values, traditions and life choices, and money is not an insignificant influence either – at any stage of the food system. It is also worth noting – and a little bit sad – that marketing is much more efficient than education in changing minds and behaviour and, importantly, shaming rarely leads to positive changes. My other favourite concept, nudging, should therefore come in handy along with educators taking a leaf out of the marketers’ book and paying more attention to what people enjoy, not just what they ought (not) to do.
Summa summarum, the global food system is broken and must change for the benefit of our health, societies, economies and the environment. But this is now a recognised fact and the transformation has begun, or to quote Christiana Figueres: Cinderella has been invited to the ball. Indeed, all things considered, my most important takeaway from the EAT Forum discussions was that optimism is not the result of success, it’s the starting point for it.
by Tytti Kaasinen, Head of Stewardship & Risk Engagement at GES
If I didn’t already know it, it became obvious at the EAT Forum last month that there are numerous big problems associated with food: hunger, malnutrition, obesity, lifestyle diseases, climate impacts, water risks, land degradation, food waste, plastic packaging, struggling farmers, food insecurity… Apparently what makes it possible for us to stay alive is also making it difficult for many to stay alive and the food system is seriously harming the well-being of people and the planet alike.
GES is already addressing many of these pressing dilemmas in its Stewardship & Risk engagements: the Waterstewardship project covers the related aspects in food production, the Food supply chain engagement focuses on the challenges facing farmers and agricultural workers, and Sustainable seafood provides a take on more responsible protein sources. Furthermore, I warmly recommend that you read our previous blog posts about plastic waste, deforestation, pollinators and food waste.
I would also like to draw your attention to things like climate impacts, dietary aspects and the general unsustainability of the current food system. For example, have you realised that food is the leading cause of climate change? Underlying reasons vary from transportation to deforestation and from methane emissions to global food loss & waste alone generating about 8 per cent of humankind’s annual greenhouse gas emissions – food production is undeniably a crucial piece in the climate jigsaw. The world will fail on the Paris agreement without a major food systems change.
While there was a myriad of people and perspectives at the EAT Forum, what everyone agreed on was that the current food system is completely untenable and in a desperate need of fixing. Not only for the sake of climate change; food is a big player in global transformations much more broadly than that. By way of an example, the Food and Agriculture Organization (FAO) estimates that world food production must rise 60 per cent to keep pace with demographic change, even though food security is already a concern on a global, national and individual level. Sufficiency, sovereignty and safety are the food security cornerstones, none of which is entirely functioning at the moment, and this has in turn contributed to tensions and migration as well as harming socio-economic development. Considering the concurrent environmental and societal pressure points, we need to urgently strike a balance between production and protection.
Not helping the matters is corporate consolidation in the sector, leading to concentration of power and purchasing terms dictated by those who can. It’s easy to guess that growers are not in a strong position to make a living, increase local self-sufficiency or invest in more sustainable practices. Also not helping is the fact that food is often valued incorrectly: how can it be right that the price increases for agricultural commodities are massively lagging behind the trajectories for diesel or gold, for example? The inputs, impacts and costs of growing are not correctly valued either on the system level or by the consumers expecting constantly low prices. As with many problems, the short-termism traditionally associated with investors is accused of partly contributing to the skewed food system. But investors can also be a force for good by engaging on system-level issues with portfolio companies and peers, and collaborating widely to better align the financial flows and production frameworks with the huge challenges that lie ahead. This will likely result in a more stable long-term investment environment.
If fixing the whole food system sounds a bit unrelatable and intimidating, let’s talk about you and me instead. Or more to the point: what we and those around us eat. I expect everyone to have heard about excessive meat eating being bad both for our bodies and the planet, but it is still staggering that 60 per cent of all mammals on Earth are livestock and 70 per cent of all birds chicken and other poultry.
Humankind’s seemingly insatiable appetite for animal proteins is just one concern, but when it comes to global shifts towards unhealthy diets overall, they actually risk to undermine the health gains in the last 50 years. I was slightly conflicted to hear a claim that people “get” food waste much better than nutrition – I am passionate about food waste but are we really not realising that what we put in our mouths matters? Shockingly, while the consumption of healthy foods is increasing modestly, the trend is exponential for unhealthy ones, and in fact bad diets now outweigh the negative health impacts of tobacco and alcohol combined. These two are sectors excluded by many investors, so I wonder if businesses linked to e.g. trans fats and sugar, if not meat, will soon start being blacklisted from investment universes? Even though harmful eating habits do not always show outwards and weight is not an automatic proxy for a person’s health, investors and companies should nevertheless take as a warning sign that there are over 2 billion adults and 41 million children who are overweight, with the related knock-on effects possibly beginning to have very material consequences.
It’s not all bad news, however. Amazingly, pretty much all the speakers and people I spoke to at the EAT Forum were actually optimistic. If you’re wondering why, keep an eye out for the second part of this blog coming up shortly.