All Insights

Currently reading

Food for thought

Sponsorships

8 min read

Food for thought

The global agricultural food (agri-food) system is under immense pressure to simultaneously meet the needs of a growing population and produce food in a more sustainable way.

Marketing & Communications
Marketing & Communications

The complex relationship between food production and sustainability

The sustainability focus of many countries, regulators, investors, NGOs and social movements around the world is currently directed at mitigating climate change and the need to reduce greenhouse gas (GHG) emissions. The requirement to move away from fossil fuels and revolutionise energy production in favour of greener alternatives is now well embedded in common opinion.

Nevertheless, there is another revolution that needs to be better understood, reinforced and appreciated. It is the food chain revolution. Here, the concept of sustainability has more relevance than is initially apparent. The global food system is far from resilient and negatively impacts the environment, the climate itself and our health. Never has so much affordable food been delivered by the agriculture food (agri-food) chain. Yet, this is happening at the expense of future generations. Moreover, it has reached a critical juncture and may be approaching a declining phase: a reduction of output could be upon us. 

The agri-food system currently creates a dangerous reinforcing loop which exacerbates the planet’s climate change issues. As such, the green revolution cannot happen without a substantial change in the food system. In fact, it may surprise many to discover that the food chain – from production to distribution, consumption all the way through to food-waste – is responsible for between 25% and 30% of GHG emissions.  A good proportion of this is linked to methane released by livestock and their waste.

Despite agriculture being the second biggest cause of climate change, it does not draw as much public attention as other matters contributing to greenhouse emissions. One of the reasons of this low awareness, or concern, might be linked to the fact that reducing emissions in the food chain is much more complex than the energy switch from oil to wind or solar power. Additionally, as humans, we don’t like to hear the uncomfortable truth.

The food agriculture food sector is being impacted by climate change and in turn causing it

The whole food chain has a perverse relationship with climate change, being both victim and perpetrator. Agriculture is interconnected with the climate, biodiversity, urbanisation, resource scarcity and demographics. According to the UN, the human population will grow from the current 7.7 billion to 11 billion towards the end of this century. As a result, our food systems will have to feed around 40% more people, while at the same time faced with the task of reducing GHG emissions.

So, we need more agricultural land, but we cannot cut trees that absorb CO2 emissions; we need better irrigation, but water is becoming more and more scarce; we need greater productivity, but we have to refrain from using traditional fertilisers based on damaging phosphorous and nitrogen.

Even more worrisome, the thickness of topsoil – the portion that contains organic matter and nutrients for plants and crops – is slowly decreasing because of the combined action of intense use and heavy rainfall resulting from changing climate patterns. We are approaching a threshold below which crop productivity will be reduced. In this context, the land to raise animals may have to be increased. The UN’s Food and Agriculture Organization estimates we need 70% more animal products by 2050 to feed the world,  but this expansion cannot take place at the expense of agricultural land nor forests. 

Additionally, meat and dairy production has a big impact on pollution: 2,500 dairy cows pollute the atmosphere at a comparable amount to a city of more than 400,000 people. 

Food waste is another huge source of methane emissions, not to mention the significant ethical implications. According to the European Economic and Social Committee, more than 170kg of food waste per person is produced every year. Better packaging to protect and conserve food for longer is required, but we now seek plastic alternatives. In 2019, each person living in the EU generated an average of 177.4kg of packaging waste. 

What new opportunities has the food revolution presented?

The harsh reality is that our food system needs to be completely redesigned and the incongruities must be solved. Partial solutions include: aquaculture (controlled farming of fish and other aquatic organisms); vertical farming (growing crops in vertically stacked layers); cleaner fertilisers; precision agriculture (technology enhancing farm production); move to a circular packaging system (reduce single-use packaging); and of course, a radical change in consumer habits.

Innovative solutions then need to be sustained by regulators through taxes, incentives, public procurements, awareness campaigns, standards and labels. As this dynamic evolves, some companies, industries and activities will innovate and prosper, others will slowly die.

The challenge to reinforce our food system is immense which can only be solved through concerted and co-ordinated action between governments, businesses and consumers.

“Building Bridges” sustainable finance conference

Stefano Montobbio, EFG’s Global Head of Investment Governance and ESG, and Sam Glover, manager of the EFG's Food Revolution portfolio, will host a panel with the title "Food Revolution – Is technology going to disrupt the entire food and beverage value chain?" on 01 December from 10.00 to 11.30 a.m as part of the Building Bridges sustainable finance conference.

They will discuss this burning topic and the related investment opportunities with their guests, Christoph Jenny, founder of Planted; Dr. Martijn Sonnevelt, ETH Zurich and World Food System Center; Sofia Condes, Head of investor outreach manager at FAIRR initiative. The panel will be moderated by Lorenz Altwegg, Head of Corporate Sustainability at EFG.

1 USDA NASS; “Determining Climate Effects on US Total Agricultural Productivity”, Liang et al, Proceedings of the National Academy of Sciences, 2019. GMO, The race of our lives, revisited, 2017
2 UN IPCC Fifth Assessment Report (2014); UN FAC Food Wastage Footprint (2013);  https://www.universityofcalifornia.edu/longform/where-do-greenhouse-gas-emissions-come
3 FAO, More fuel for the food/feed debate, http://www.fao.org/ag/againfo/home/en/news_archive/2017_More_Fuel_for_the_Food_Feed.html
4 https://youaretheirvoice.com/resources/the-daunting-facts-print-friendly-en.pdf
5 https://www.europarl.europa.eu/resources/library/images/20170512PHT74421/20170512PHT74421_original.jpg
6 Eurostat, October 2021