In brief
- Food systems globally are essential for supporting a growing global population. Yet, they are vulnerable to a wide range of risks, particularly from the degradation of natural capital.
- Investors can look to generate returns by supporting more sustainable ways to produce, manufacture, distribute and consume food. At the same time, there are a number of ways in which investors can seek to mitigate natural capital risk exposures in their portfolios.
- Investors may have material risk exposures across the food value chain, but it is the food production and agriculture segments that are the most dependent on – and have a large impact on – natural capital. Investments related to food production and agriculture may therefore face significant natural capital risks.
- While investment opportunities in this segment of the food value chain can still be difficult for mainstream investors to access, there are also attractive opportunities related to the broader transformation of global food systems.
How investors are exposed to global food systems
Global food systems are complex networks that include all the inputs and outputs associated with food production and consumption. Investors across the board are exposed to companies that are either directly or indirectly linked with food systems, because of their involvement somewhere along food value chains or in related sectors.