Over the next three decades, we will see more change than we can fathom given the growing resource scarcity and the undeniable fact of our changing climate, which will impact our lives immeasurably.
At ADM Capital and ADM Capital Foundation we see the opportunity to invest in responsible change – both via our funds, our research and our non-profit work.
We are hopeful that we will be part of a “Business Unusual” scenario of improved efficiency in resource use and more of a circular economy.
We also see fiduciary responsibility in working to mitigate the risks inherent in Business as Usual, where we consume the resources of three planets while occupying just one. In the world we are entering, disruptions are inevitable and the many interlinked risks we face are material and imminent.
Clearly, we are not now planning adequately for the even-more resource scarce environment that inevitably lies ahead. World population is set to expand by over one third, or 2.3 billion people, by 2050.
Most of this growth will be in the developing world, which has consumed less, taken less from our planet, but shouldered production of our wasteful Western consumption. As the global South builds a middle class and becomes more affluent, consumption inevitably expands.
Agriculture, for example, is a major consumer of water and other resources and is adversely affected by climate change. We believe ADM’s Cibus Fund can help lead thought in how we manage food production, logistics and supply by investing in companies that don’t further damage our future.
Indeed, when ADM Capital Partner, Rob Appleby established the London-based Cibus Fund in May 2017, he set out to integrate learnings relative to how we are using our planet’s resources, the risks associated with our changing climate, and invest in companies that were invested in efficiency.
Certainly, the Foundation’s work over a decade had shown that environmental risk wasn’t just that any more, it was also economic risk. This understanding became the genesis of an investment approach: How to promote better companies and more efficient use of resources in the critical food sector. How to promote Business Unusual?
How to use this knowledge and improve the portfolio’s risk profile and ultimately its returns. The Cibus Fund therefore promotes sustainable agriculture and food chains to increase efficiency, avoid waste and allow us to produce more with less.
As Cibus moves to build a portfolio and a pipeline of companies that respond to a sustainability agenda, ADMCF has been working to build knowledge in the sector. ADMCF initiative, Chinawaterrisk.org, has produced important reports on water and agriculture, for example.
A new report, Charting Asia’s Protein Journey, commissioned by ADMCF from Asia Research and Engagement and released at the September 4th Sustainable Food Summit in Singapore, shows that Asia’s growing appetite for meat and seafood is a recipe for environmental destruction.
The key message is that population growth and rising incomes across Asia will drive a 78% increase in meat and seafood consumption by 2050.
The report, which examines the environmental effects of meeting Asia’s growing demand for protein, discloses for the first time the dramatic impact on water, land-use, anti-microbial use and the climate.
Specifically, the report finds that between 2017 and 2050:
• Greenhouse gas emissions will rise 88% from 2.9 billion tonnes of CO2 to 5.4 billion tonnes per year – equivalent to 95 million cars’ lifetime emissions
• A land mass the size of India will be required to accommodate food production with land usage rising 81% from 3.9 million km2 to 7.1 million km2
• Water use will rise 83% to 1,054 billion m3 from 577 billion m3 per annum
• Antimicrobial use will rise 44% growth from 27 thousand tonnes to 39 thousand tonnes per annum, raising risks of antibiotic resistance
The report also charts a range of potential solutions towards more sustainable protein. These include making use of improved farm technology, stronger sustainability policies from multinational food corporations and more effective regulation, monitoring and enforcement from governments.
The ADM Capital Group is investing in companies that are part of the solution, while reducing risk, driving better returns and using research and thought leadership to seek new areas for investment.