![]() Race to Zero research estimates that solutions for a net zero, nature-positive, resilient food system could generate up to USD 4.5 trillion of new business opportunities annually by 2030. This will provide opportunities for investors across the value chain – from food production, to packaging and distribution. These companies will be fundamental in transforming the food system, facilitating the shift to plant-based diets and alternative proteins embracing agro-ecology and regenerative agricultural practices that reduce the reliance on chemical-based fertilisers and sequester more carbon in the soil and reducing waste and moving to electrified and renewables-powered transport and supply chains. That is, investment in companies that drive deforestation can generate financial, regulatory and reputational risks. Deforestation linked to production of crops such as soy and beef has been described as the ‘ new coal’ in portfolios. It is critical that companies and investors act now to counter the considerable risk of investing in unsustainable food practices. Their targets must cover at least 95% of related emissions across scopes 1 and 2 and 67% of scope 3. To be approved by SBTi as having science-based targets – a metric increasingly required by investors – firms in relevant sectors need to set targets that are consistent with scenarios that limit the increase in global average temperatures to 1.5 degrees by 2050. The newly released and much-anticipated Forest, Land and Agriculture (FLAG) guidance targets emissions from, among other areas, soil loss, deforestation and degradation, and emissions from land management. To help, the Science Based Target initiative has launched guidance for land-intensive companies to set transition targets in line with climate science. Such a transformation will require all companies working in the sector to transition their operations. The commission called for a shift towards plant-based diets, a reduction in food waste and substantial improvements in the food production supply chain. In 2019, the EAT-Lancet Commission published a definitive report on healthy diets from sustainable food systems. The successful transition of food and land use systems depends on a host of actors working together, and on humanity shifting to live within the planetary boundaries. Nor will we be able to make good on the Sustainable Development Goals by 2030. Given the level of emissions that the food system generates, the IPCC has made it clear that the world cannot achieve a 1.5C future as envisioned in the Paris Agreement without addressing how food is produced and transported, or without a substantial shift in diets. On top of this, to deliver the essential global transition to net zero emissions, the food system has to undergo its own transition. It notes that, without action, individual global food supply firms could permanently lose up to 26% of their value by 2030, with a sector average loss of over 7%. As the Race to Zero initiative highlights, climate-linked disasters caused USD 108 billion losses in crop and livestock production in developing countries between 20. ![]() The food system is at further risk from both long-term and acute climate change impacts, including floods, drought and extreme heat. The climate/food nexusīNP Paribas Asset Management is pleased to have been one of the strategic advisors of an analysis commissioned by the PRI and carried out by Vivid Economics to generate robust estimates of both the risks and opportunities facing investors related to food system transformation. Meanwhile, climate-related impacts are destroying farmland and resulting in hunger in, for example, Pakistan, Nigeria and the Horn of Africa. A third of all food is wasted.Ĭampaign group Feedback EU has highlighted that the EU throws away 153 million tonnes of food each year. Agriculture is the largest source of anthropogenic methane emissions, the second most potent of all greenhouse gases. Significant action is needed to create a food system that is fit for the future – particularly when it accounts for 37% of all greenhouse gas emissions. These shocks arrived on top of a trend of already rising prices. ![]() Not only does this make putting food on the table harder for many families, every 1% increase in food prices pushes another 10 million people into extreme poverty. As we previously explored, the Food and Agriculture Organization’s (FAO’s) Food Price Index earlier this year reached levels last seen in the 1970s oil crisis (it has subsequently fallen, but to still-high levels last seen in 2011). One of the many effects of the Ukraine war has been to highlight the fragility of our global food system. ![]() How can investors help transform it? Rachel Crossley, Head of Stewardship for Europe at BNP Paribas Asset Management, explores. The global food system is emissions-intensive and wasteful.
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