Food security: where environmental and social collide
ESG increasingly sees environmental concerns intersecting with social issues. As a case in point, food security becomes even more urgent when considered against the backdrop of a warming world. Lack of food security can lead to higher prices, acute shortages, and ultimately social unrest. The invasion of Ukraine will likely disrupt already tight agricultural markets: Russia and Ukraine are responsible for about 25% of the world’s wheat exports, 65% of sunflower oil exports, 20% of barley and 18% of corn.
Food price shocks also hit EMs, retail, discretionary
Food price shocks hit lower-income countries the hardest (check out EM sovereign credit spreads). Rising cost of living will hit a global retail sector eager to rebuild after covid, with effects stretching to food wholesale, beverages, hospitality, and gaming. Paper and packaging may also feel the impact of falling wholesale and retail demand. Second order effects could be seen in telecoms and media due to rising wage pressure.
Fertilizer availability at risk, prolonged pain in grain
Sanctions on Russia and Belarus and the war in Ukraine will likely reduce global fertiliser availability: together, the three account for c. 38% / 11% / 7% of global potash / ammonia / phosphate supply and c. 19% / 24% / 11% of global exports. Grain market disruptions risk food shortages, especially if planting is disrupted and ports stay shut.
Challenges? >2bn people experience food insecurity
Food systems generate over a third of GHGs! By 2050, the world will have to feed up to 10bn people, more nutritiously and with far lower emissions. Challenges today include near-term food supply chain dislocations. Further out, climate change, loss of farmland, loss of habitats, freshwater depletion and pollution, and poverty weigh on prospects.
Recipes for change: reducing food waste
Fully one-third of food produced annually is lost or wasted: this food waste contributes 8-10% of GHG emissions. Using just 25% of this wasted food could feed almost 900mn hungry people. Loss and waste occur across the food value chain and can be reduced.
Longer term: policy prescriptions ahead of net zero
Further out, advance planning, budgeting and government policies are key to food security, social development and overall poverty reduction. Recommendations include lowering the cost of a healthy diet, scaling up climate resilience in food systems, tackling poverty and structural inequalities, and changing consumer behavior.
Plating up in 2050: eggless eggs? Fishless fish?
Today, fewer than 15 crop types and five livestock species provide about 80% of our global food supply – that’s it! Agriculture in the future will look very different, with technological advances taking some food production off the farm and into the lab.
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