A key focus of ESG is climate change, but there is more interest and sophistication in the discussions we are having around biodiversity. Ian Burger, Newton Investment Management


Of course, fuel cell applications and heavy industry need to move beyond cars and trucks. It is fascinating and encouraging to see the type of money that is going into efforts to transform how we move ships across the ocean and planes through the air. This is not just science fiction; they are being developed. More effective ways to produce biogas from waste streams as urban environments grow. That can lead to greener ways of fertilising. Lastly, there is a growing revolution in how we feed ourselves. This ranges from alternative proteins to precision greenhouse agricul- ture that maximises yield and minimises water consumption and pesticides. That is potentially transformative.


PI: How else is climate change impacting the food chain? Burger: The acceleration of the S and the E in ESG most definitely lends itself into the food supply chain. People are more cognisant of what they are eating and its carbon footprint. That is not just food miles, but also the farming technologies used to produce food. There is a recognised statistic that around 15% of global emissions come from the production of animal proteins. The conversations I am having with companies today are much more sophisticated than 10, 15 years ago and that is partly due to regulation.


The free market is fantastic at coming up with innovative ways to


solve the high-level policy initiatives that will come through on the food side.


In terms of innovation, we see significant advances in farming technologies and new plant-based proteins, which is becoming an investable part of the landscape. Food is one of Newton’s overarching investment themes. We have, in fact, launched a fund around the future of food. This is a signif- icant area of development. We need food to survive. To generate sufficient amounts of the right types of food to sustain a popula- tion requires innovation, and that is what we are starting to see.


PI: Covid-19 is believed to be a zoonotic disease in that it came from animals. Will it change how the food chain is managed within portfolios? Llewellyn-Waters: Not directly. The UK government’s review of biodiversity pointed to 80% of global agricultural land is used for livestock or to grow feed for livestock. If we think about that in terms of pricing these border externalities, more than half of global GDP is tied to biodiversity and natural capital. The Task- force on Nature-related Financial Disclosures has been initiated, so there is increasing awareness of the tools available to consider these factors within the investment framework. Jackson: The spread of Covid is linked to many ESG issues, in- cluding biodiversity. I hope that it changes the way the food chain


March 2021 portfolio institutional roundtable: Responsible investing 11


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