Investing in a sustainable and future-proof food system: that was the key theme of the seminar titled 'Invest in the future of our Food.' The current system is no longer tenable. A transition is required, in which producers, consumers, investors and governments all need to play their part. The seminar took place at Colruyt Group premises in Halle, Belgium.
An untenable situation
"How can the world feed almost 10 billion people by 2050 in an economical and sustainable manner?" This is the question that Craig Hanson, Global Director for Food, Forest and Water of the World Resources Institute, asked. If we maintain our current lifestyle, we will need the equivalent of almost three planets to achieve that. This is an untenable situation, which is why we need to find solutions now.
The urgency is clear and is also embedded in the Sustainable Development Goals (SDGs), the 17 development goals defined by the United Nations. With this clear message, Craig Hanson, as the first speaker, set the tone for the event 'Invest in the Future of Our Food' that Triodos Investment Management had organised for private banks, insurance companies, institutional investors and family offices in Belgium. "The biggest challenges are the scale and the need to connect all the players and factors."
Colruyt Group: step by step towards a more sustainable world
One of these important players is the corporate sector. Jef Colruyt, CEO of Colruyt Group, spoke about the role that his company plays in making the food system more sustainable. Colruyt Group is best known as a food retailer, but is also active in wholesale and food services, and with its chain of Bio-Planet supermarkets this frontrunner in sustainability is also active in the organic segment.
"Sustainability," says Jef Colruyt, "has several sides for us: the way in which we run our company, which includes reducing our CO2 emissions as far as possible, strong partnerships with our suppliers, but also providing inspiration to our customers." Customers are, for instance, given tips on creative cooking with leftovers, in order to reduce food wastage. As a 'voice' of the SDGs, Colruyt Group also plays an active part in the efforts to make the general public enthusiastic about the development goals and to encourage them to actively contribute to realising these goals.
What is the real price of our food?
Agriculture and food is a complex theme that needs to be placed within an ecological as well as a social context. This starts with the soil, which is subject to increasing erosion. "50% of our agricultural soil is no longer fertile, says Marilou van Golstein Brouwers, Chair of the Management Board of Triodos Investment Management. And the next link in this chain, the farmers, is also under pressure. "500 million small farmers - most of them in developing countries - produce 70% of our food and many of them are underpaid. Take, for instance, the price of a bar of chocolate. Only 6% of the price that a consumer pays goes to the cocoa farmer." And that is another important issue that Marilou van Golstein Brouwers raised during her presentation: "What is the real price of our food?" Unhealthy food is often much cheaper than healthy food: for a salad you sometimes pay four times as much as for a hamburger. "There is a lot wrong in the food sector. As consumers, we look at the price, but not at the social costs behind it."
Everyone has a part to play
Consumers, producers, governments and investors: everyone has a part to play in the transition to an agricultural and food system that is more sustainable and future proof. "We are on the eve of a transition", says Marilou van Golstein Brouwers. This is a big challenge, but everyone present at the seminar wants to get to grips with it. "The agriculture and food sectors are often seen as a problem, but they can also be turned into an inspiring success story. A healthy company that works with healthy animals and plants on healthy soil results in healthy people."
Sustainable food and agriculture is one of the impact strategies of Triodos IM. Investors can invest in this sector through various Triodos investment funds. A long-term view is indispensable.
Shareholders still tend to focus on the short term and that is a missed opportunity. "Established, large companies often want to take serious steps, but their shareholders sometimes force them to take a few steps back. To achieve sustainable development, investors with a long-term view are incredibly important", says Marilou van Golstein Brouwers. "Fortunately, however, we are seeing more and more of these investors."
Many sustainable, growing companies are not keen to take on board shareholders with a short-term view. Riëlla Hollander, Director Food & Agriculture at Triodos Investment Management: "They are often approached by large companies, but their way of thinking does not fit in with that of these value-driven companies. That is why we have created Triodos Organic Growth Fund, which invests in the share capital of unlisted front-runners in the European sustainable food sector.” These companies are looking for long-term capital to fund the further expansion of their market positions. "In us they find a shareholder who subscribes to their mission and values, commits for the long term and contributes to the thought process about the strategic development of the company," says Riëlla Hollander.
Big companies, big impact
Front-runners in sustainable food can also be found among listed companies. "When these companies start moving, that has a huge impact," says Iris Lether, who as Senior Sustainability Analyst is involved in the selection of these front-runners for the Triodos Socially Responsible Investment funds. Examples include Sprouts Farmers in the US, Wessanen in the Netherlands and Naturex in France.
Interested members of the audience asked about the impact of a potential stock market correction on the system. "Long-term investment means investing in a different way, with a focus on the future. That means not removing a company from your portfolio the minute its performance shows a blip," explains Iris Lether. Others wonder whether sustainable investment and attractive returns can go together. "During the past year, Triodos Sustainable Pioneer Fund generated a return of 10%,” says Iris Lether. “Various studies show that companies that focus on sustainability are healthier in the long term and achieve higher returns.”
Directly or via funds?
Another question is: should investors invest directly in companies or via funds. Rogier Pieterse, Managing Partner Investments at PYMWYMIC, addresses this issue, drawing on the conclusions of the report ‘Beyond Direct Deals’. Experienced fund managers, lower due diligence costs and risk diversification across a broad portfolio can be reasons for investors to opt for fund investment.
Focus on transparency
"An event such as this seminar also causes debate and brings people together. That is important," says Hollander. "Personally, I emphasize the need for transparency in pricing. The social cost of unhealthy food must be reflected in the price. If we manage to achieve that, people will change their consumption habits. Governments also need to contribute, for instance by imposing taxes."
The lively discussion continued afterwards during drinks, showing that the importance and urgency of a healthy and sustainable food system had struck a chord with the audience.