News | ESG


Invest in sustainable food sources to fight climate change, says new countryside commission


Cheap food is a threat to our planet as well as our health so the government must act to make farming more sustainable, a new commission says. A two-year study by the RSA Food, Farming and Countryside Commission, concluded that the UK must have a sustainable farming system by 2030. Pro- moting healthier produce will avoid further destruction to our climate and ease pressure on the health service.


Cheap food causes pollution, deforestation, is a danger to wildlife, damages soil and causes anti-biotic resistance as well as diet-related ill health. Institutional investors also have a role to play by backing more sustainable sources of food and avoiding companies with practises that harm the planet. To help focus efforts here, the commission called for a National Agro-ecology Development Bank to help long-term investors fund the transition to a sus- tainable food system. The study, funded by the Esmée Fairbairn, a foundation that seeks to improve the quality of life, found that most farmers believe that they could do more to help the environment in the next decade if they have the right support.


Investor group to push companies on environmental impact disclosure


A group of almost 90 investors with £8trn of assets under management are to push companies to disclose more information on their environmental impact. Exxon Mobil, BP, Chevron, Amazon, Volvo, Alibaba and Qantas Airways are among the more than 700 companies across 46 countries that the group is target- ing over a lack of transparency on their climate change, water security or deforestation impact. Candriam, HSBC, the Environmental Agency Pension Fund, Investec and the Washington State Investment Board will be engaging with these companies through not-for-profit disclosure platform CDP. Emily Kreps, global director of investor initiatives at CDP, said that the “vow of silence” on this issue from non-disclosing companies cannot go on. Vincent Hamelink, Candriam’s CIO added that it is important that companies disclose and manage their environmental impact. “Collaborative initiatives are crucial for effective impact, as they ensure a consistent message from asset owners. These will continue to increase in importance, as the financial community’s ESG awareness gains momentum.”


Renewable energy cost fall opens the door for institutional investors


The UK leaving the European Union, and its Common Agricultural Policy, is an opportunity to adopt a new national food and farming policy. Alongside this, farmers need advice and access to finance to change their cur- rent practices, the commission said.


The study wants the government to support farming in a way that learns from, works with and enhances natural and social systems. “What we eat, and how we produce it, is damaging people and the planet,” said Sue Pritchard, a director of the commission. Sir Ian Cheshire, chair of the RSA Food, Farming and Countryside Commis- sion, said: “Our planned exit from the EU creates a once-in-50-years opportu- nity to change our food and farming system, but we need to act now: whatever happens next, the climate emergency makes urgent, radical action on the environment essential. “The UK has the capability to become the world-leader in healthy, sustainable food production and we set out how in just 10 years, we could make radical change and harness farming as a force for wider economic, public health and environmental good,” he added. “We invite government to adopt this plan to establish an agro-ecological, sustainable future.”


The falling cost of developing wind and solar power parks is creating an opportunity for more private capi- tal to fund Europe’s transition to a low carbon economy. It is now cheaper to build and operate renewable energy generation assets than a coal, gas or nuclear- fuelled power plant, NN Partners points out. Indeed, the cost has fallen to a level that such projects no longer qualify for subsidies, so private capital will have to fill the void by investing in the equity and debt of renewable infrastructure projects in Europe. With the cost of harnessing the power of the sun and the wind falling below that of more traditional sources of energy, this could reduce the reliance on fossil fuels. Political will could be another factor in the rising use of sustainable energy sources.


The UK government has announced the almost impos- sible of aim of eradicating the country’s carbon foot- print by 2050 and so has a sustainable agenda, unless, of course, the new prime minister changes the policy. In Europe, renewables already account for 47% of installed capacity and 36% of power generation.


Issue 85 | June–July 2019 | portfolio institutional | 23


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