New Sustainable Food and Water Fund Springs Up

    Stockholm (NordSIP) – According to the UN Food and Agriculture Organisation (FAO), while world hunger is on the rise, an estimated 1/3 of all food produced globally is lost or goes to waste. The Swedish Environmental Research Institute (IVL) estimated in 2018 that foodwaste in Sweden could fill the Ericsson Globe Arena four times over. At the same time, the UN warns that a 40% shortfall in freshwater resources by 2030 “coupled with a rising world population has the world careening towards a global water crisis.”

    To address these issues, on December 14th, Schroders announced the launch of a global equity portfolio that aims to invest in companies driving the transition towards more sustainable food and water.

    “Our current food and water system is untenable and will experience an unprecedented confluence of pressures over the next 30 years. By 2050 the world will need to produce 70% more food and drinking water, whilst producing less carbon and using 70% fewer resources. Regulation, consumer behaviour, and new technology are changing fast, and are now starting to impact the long overdue change that is required to make the whole system less carbon-intensive, wasteful and polluting, whilst improving biodiversity and encouraging healthier diets globally,” Mark Lacey, Head of Global Resource Equities and Portfolio Manager of the SISF Global Sustainable Food and Water, commented.

    “Current estimates suggest this structural shift will require at least $30 trillion of capital reallocation by 20503. We believe companies whose products and services are facilitating this movement will be in great demand and can exhibit strong long-term growth potential. That is why SISF Global Sustainable Food and Water will invest across the entire food value chain, allowing us to capture this whole opportunity,” Lacey added.

    The Schroder ISF (SISF) Global Sustainable Food and Water fund will be managed by Mark Lacey, Felix Odey and Alex Monk and is part of the Schroders Global Transformation Range The team will have a high-conviction unconstrained approach and will look to allocate to 35-60 stocks based on a ‘focus list’ of around 190 stocks has been developed using stock-level research and Schroders proprietary tools. The new fund will target emerging technologies and strategic industries integral to changing the food and water system. It will seek long-termopportunities across key value chains, including the likes of water management, food production and processing, distribution, and recycling. The fund is classified under the EU Sustainable Finance Disclosure Regulation (SFDR) as Article 9.

    “Food and water already account for 26% of global green house gas emissions4. If we are to sustainably feed a predicted global population of 10 billion in 2050 while meeting the two degree target set in the Paris accord5, real structural changes are needed. “The development of new technologies improving yield and efficiency, shifting dietary habits towards organic plant-based food, combined with stricter government action expected in agriculture and food packaging, offer huge earnings potential for well placed companies that will disrupt and thrive in changing food and water markets,” Felix Odey, Portfolio Manager of the SISF Global Sustainable Food and Water, added.

    “Solving the global sustainability challenges we face requires a huge reorientation of capital. The United Nations suggests that there is a gap of between $5-$7 trillion dollars a year that needs to be invested in new technologies, companies and industries to meet their Sustainable Development Goals which are a ‘blueprint to achieve a better and more sustainable future for all’. Investors therefore have a critical part to play as we can deploy capital towards those companies enabling the transition to a more sustainable future. Not only does this new fund seek to address the challenge of providing food and water to our growing global population at the same time, it looks to reduce the environmental impact of these industries,” Hannah Simons, Head of Sustainability Strategy, Schroders, concluded

    Filipe Albuquerque
    Filipe Albuquerque
    Filipe is an economist with 8 years of experience in macroeconomic and financial analysis for the Economist Intelligence Unit, the UN World Institute for Development Economic Research, the Stockholm School of Economics and the School of Oriental and African Studies. Filipe holds a MSc in European Political Economy from the LSE and a MSc in Economics from the University of London, where he currently is a PhD candidate.

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