Sustainalytics’ Research Report Assesses the ESG Risks and Opportunities Facing Companies that Contribute to the Global Food Value Chain
January 26, 2021, Toronto – Sustainalytics, a Morningstar Company and a globally-recognized provider of ESG research, ratings and data, today released a new thematic research report titled, 10 for 2021: Investing in the Circular Food Economy. With the global human population forecast to reach 9.7 billion by 2050, the demand for more food production is expected to increase by 25 to 70 percent over the next 30 years. However, meeting this growing demand for food while minimizing negative environmental and human health impacts remains a challenge. Against this backdrop, Sustainalytics’ report aims to support investors interested in gauging the ESG risks and opportunities in the global food value chain.
By examining a range of subindustries, from agrochemicals to agriculture to aquaculture and food products, Sustainalytics identifies 10 companies that are developing solutions that can support the principles of the circular economy. These principles include minimizing waste and pollution, extending the use-phase of products and ecosystem regeneration. The report assesses how these 10 companies are managing the ESG impacts of their operations, supply chains and product offerings in relation to their industry peers. Below are key insights from the report.
- Agrochemicals and Preservatives: While agricultural manufacturers are generally underprepared to manage environmental and social risks, Sustainalytics research finds Yara, DSM and Novozymes have strong management approaches to mitigate carbon intensity, emissions effluents and waste, and the environmental and social impact of products and services.
- Agriculture and Aquaculture: Farming and fisheries help to feed the world’s population and support economic and social development. Olam International and ADM are using natural processes and technological innovations to mitigate the ESG risks from production and supply chains. Leroy Seafoods and Bakkafrost are also developing sustainable aquaculture practices to maximize energy and water efficiency.
- Food Consumption: Food and packaging waste presents serious environmental and social problems, however businesses can streamline processes and integrate circular approaches into their value chains. With emerging regulations around waste globally, firms that address these issues are well-positioned to limit their risks. Danone, Tesco, and Starbucks are offering solutions to address these issues through their strong waste management programs.
“Global food security is a critical concern, which has been heightened by the pandemic,” said Martin Vezér, Sustainalytics’ Manager of Thematic Research. “Yet the environmental and social footprint of food production and consumption continues to grow. By taking a deep dive into the key industries most connected to the global food chain, this report provides insights into how industry players are managing ESG risks and investing in solutions.” Sustainalytics’ 10 for 2021 report also looks at a set of circular economy themed funds and discusses approaches to portfolio construction, engagement and financing strategies. To access Sustainalytics’ 10 for 2021 report, please click here.
About Sustainalytics, a Morningstar Company
Sustainalytics, a Morningstar Company, is a leading ESG research, ratings and data firm that supports investors around the world with the development and implementation of responsible investment strategies. For more than 25 years, the firm has been at the forefront of developing high-quality, innovative solutions to meet the evolving needs of global investors. Today, Sustainalytics works with hundreds of the world’s leading asset managers and pension funds who incorporate ESG and corporate governance information and assessments into their investment processes. Sustainalytics also works with hundreds of companies and their financial intermediaries to help them consider sustainability in policies, practices and capital projects. With 17 offices globally, Sustainalytics has more than 800 staff members, including more than 300 analysts with varied multidisciplinary expertise across more than 40 industry groups. For more information, visit www.sustainalytics.com.