The think tank’s new report, ‘Financial Markets Roadmap for Transforming the Global Food System’, uses data captured from 400,000 companies across 160 countries – including food giants Nestlé and McDonalds – to create a framework for financial institutions to guide their capital allocation and engagement with food companies.
Planet Tracker outlined six priority actions to be taken by financial institutions before 2030 to help guide investment in the food and drink industry and stem its impact on the environment.
Action plan
These six actions were: Require fully traceable supply chains, halve food loss and waste, stop funding deforestation, cut agri-methane emissions by 45%, encourage regenerative agricultural systems and invest in alternative proteins. A full breakdown of each action can be found in the box below.
Priority actions
Before 2030, Planet Tracker calls on financial institutions to:
1) Require fully traceable supply chains: with a particular responsibility for investors and banks funding companies towards the downstream end of the supply chain (manufacturers, retailers and service companies)
2) Halve food loss and waste: by engaging with companies to reduce losses through the production process and waste at the retail and consumer end while maximising efforts to reuse food that is not fit for consumption for other purposes
3) Stop funding deforestation: by implementing policies including publicly committing to ensuring zero deforestation risk in portfolios and targeting deforestation-linked emissions in net zero plans
4) Cut agri-methane emissions by 45%: through allocating capital away from industrial animal protein production towards alternative protein producers, increasing disclosure around methane emissions and engaging with investees to ensure producers are aligned with the Global Methane Pledge
5) Encourage regenerative agricultural systems: through activities such as engaging investee companies to adopt regenerative techniques and establishing strong due diligence processes to ensure regenerative practices are genuine
6) Invest in alternative proteins: by engaging with governments to ensure regulatory frameworks encourage the development of alternative proteins and with investee companies to set time-framed targets for shifting away from industrial meat and dairy
Following these six actions would wipe out about 10 gigatonnes of carbon dioxide emissions (GtCO2e) – equivalent to double current US annual emissions – by 2030, Plant Tracker claimed. This would reduce the current global food system footprint (17.9GtCO2e) by 60% and humanity’s overall greenhouse gas emissions by a fifth.
Planet Tracker estimated that the annual investment to achieve these result would be $300-350bn, equivalent to just 45 of the $8.6tr of current investment.
Economic benefit
Moves to reduce greenhouse emissions would also have an economic benefit for food businesses, calculated at $1.5 trillion USD. However, should financial markets fail to follow these steps and address the harms caused by the global food system, they face ‘significant risks’ to their investment portfolios, with individual food firms stand to lose 26% of their value.
Peter Elwin, Planet Tracker director of fixed income and head of the food and land use programme, said: “Unless the global food system is transformed, none of the global targets, pledges and ambitions that have been agreed in recent years with respect to people, planet and climate will be achieved.
“Financial institutions providing debt and equity finance have an outsize opportunity to influence systemic change. From halving food waste to stopping deforestation, six steps by investors could take 60% of food’s emissions off the table.”
