Our consumption of food plays an important role in the economy and is obviously essential for life. However, what many of us are unaware of is the impact that different types of foods have on the environment.
Food accounts for approximately 26% of global greenhouse gas emissions. This is a result of: deforestation; emissions from fertilisers and manure; methane from cattle; methane from rice production; energy use on the farm; supply-chain emissions from food processing, refrigeration and transport.
Even if we stopped emissions from fossil fuels right now, emissions from food production alone would take us well beyond the “carbon budget” for 1.5°C and leave little room to reach our 2°C target agreed globally.
As the human population has grown, demand for meat has risen. Cattle and soy production are now the leading cause of deforestation in the Amazon rainforest. Nearly 80% of all soy produced is used to feed livestock, including cattle. Deforestation not only leads to emissions of huge quantities of carbon through forest biomass combustion and decomposition, but it also alters soil carbon content.
A recent study in the UK reported that meat consumption within the UK has fallen by 17% over the last decade – but scientists warn that this is not happening quickly enough to help reduce the environmental impact of our diets. The National Food Strategy recommends meat consumption in the UK needs to fall by 30% over the next 10 years. Another report in the US showed that Americans are cutting back (although not enough) on meat consumption for reasons of health, environment, food safety and animal welfare.
It isn’t just meat that is adding to the problem, as food packaging also contributes negatively to the environment. As awareness grows, 69 countries in the world have passed some sort of full or partial ban and/or tax on usage of new plastic bags.
There is also a change to the labelling of food arising in the UK where the UK’s biggest supermarkets and food brands are uniting to show a front-of pack environment score on our food products with a colour coded traffic light style system similar to the one used for nutritional content to be applied to all food products across Europe. This should enable customers to make more sustainable buying choices – expected to be in place in 2022.
The ultimate aim is ‘to save the planet’. The hope is that consumers, armed with credible, independent information, will swing their purchases towards more sustainable products. In turn, food producers will be motivated – or shamed – into improving processes, sourcing and emissions to secure a better score, according to Foundation Earth’s executive director.
In 2019, the global market value of green packaging amounted to some $178.6bn and is forecast to reach $246.3bn by 2025.
Consumers around the world are becoming more aware and the growing environmental movement and increasing health awareness has the potential to be the single biggest thing we can do as consumers to reduce deforestation in places such as the Amazon (largely attributable to beef production) and Borneo (largely attributable to palm oil production).
The value of the plant-based meat market is now on track to rise from $10.1bn in 2018 to $30.92bn in 2026.
In Europe, interest in the future of food has led to the launch of some investment products including an exchange-traded fund (ETF) that aims to capture consumer food buying changes. In 2020, Rize ETF providers launched a fund that includes companies involved in the sustainable food industry and which potentially stand to benefit from the accelerating transition to more sustainable food production systems and consumption patterns. Inclusion into the fund is to capture companies that are predominately plant based, including companies producing reusable, recycling and compostable packaging. The ETF has an aptly named identified ticker of FOOD.
There are a number of exclusions – companies involved in GMO seeds and products (companies involved in gene editing are included), land-reared meat (including beef, lamb, pork, poultry and fish), eggs and dairy. Companies also need to demonstrate sustainable procurement of major forest risk commodities within their supply chains – palm oil, soybean, cattle and timber through the CDP Worldwide Group. Finally, there are a number of ESG exclusions like tobacco and weapons companies.
This is early days for this investment sector and the theme is likely to take many years to play out, but sustainability of our food supply is an issue that will not go away.
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