Food – Feature ESG

The warmer it gets, the greater the impact on ecosystems and the less arable land there will be.

Yuko Takano, Newton Investment Management

challenges is that there is no net-zero roadmap for food in the way that we have for oil and gas or utilities.” There is also a lack of scenarios which outline what a net-zero system looks like for food. The IPCC tells us that the world’s crop land needs to shrink by the size of South Africa, according to the IPCC, but what does that mean for food producers. “The SDG are adequate as a sustainability roadmap to high- light the pressure points of, among others, food security,” Ker- nohan says. “Yet they are not designed to provide turn-by-turn instructions for getting from A to B.”

Alternative tastes If it looks like a burger, feels like a burger and tastes like a burger, it does not necessarily mean that it is a burger. The range of meat and dairy substitutes is growing. In the US, for example, vegetarians and vegans account for 6% of the market, while people who do not rely on red meat for their protein intake, known as flexitarians, make up a quarter of the popula- tion, Takano says. “A lot of these plant-based meat companies are trying to cater for flexitarians. That implies a much bigger market size,” she adds.

Lab grown meat could ease concerns that there might not be enough protein to feed the world’s growing population, but it is not in the commercial phase yet. “Lab grown meat is meat, it is not beans,” Takano says. “When it commercialises, regula- tors will have to decide if it is a safe alternative to meat.” Such alternatives are not just for vegetarians or vegans, but the

mainstream consumer. They are more aware of the environ- mental and social impact of eating animals. Livestock contrib- utes almost 15% of global harmful gas emissions through methane and the conversation of the land to feed them. “Peo- ple are focused on their health but are also concerned about the climate impact that their food has,” Takano says. “They are more aware of where the food they consume comes from.” Covid has accelerated this awareness. “The pandemic woke a lot of people up to sustainability,” Kernohan says. “Covid com- ing from an interaction between wild animals and humans has led to people questioning the sustainability of the food they eat, where it is grown and how.” Soussan believes there is no need to recreate the look, texture and taste of beef. “Why try so hard to mimic meat? Working on a tasty plant-based protein could mean less processing and a lower investment.” Yet some of the plant-based alternatives on the market are not the health fix that they appear to be. “It is heavily processed, so it is no panacea,” Soussan says. “For me, the positives outweigh the negatives for this new seg- ment,” he adds, “so it should continue to grow.”

A new menu To halt biodiversity loss, we will need to adopt a diet that is more varied. “Meat will always be part of our diet.,” Svan says. “Human beings are omnivores. But just as we need to use less coal and oil to achieve the Paris Accord, we will have to eat less animal protein.” Williams has a similar outlook. “There is a trend towards health and wellness,” he says. “The food consumed in the future will look more like the Med- iterranean diet consisting of healthy oils, nuts and fewer unhealthy products.” The alternative dairy and meat market could see reductions in the salt, sugar and fat content to fulfil consumer demand for healthier options. “Consumers are going to be given more sus- tainable options that are higher in quality,” Takano says. “Companies that create higher quality products with an envi- ronmental or health impact are going to be popular with con- sumers,” she adds.

While animal products are likely to remain part of our diet, consumption levels will fall. “In the future, meat will be viewed as a luxury that we reserve for the weekend. It will not be a ham sandwich that we eat at our desk for lunch,” Svan says. Kernohan believes there are huge challenges ahead, but they will be solved.

“Land is finite, but we have to increase scale to feed an expand- ing population and feed them with more nutritious food. I am optimistic that agriculture can respond to this challenge,” he adds.

Issue 102 | April 2021 | portfolio institutional | 29

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