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If you had to come up with a snappy title for this topic, what would it be?
Food could save the world, but it depends what we eat and how we eat.
Agriculture alone makes up 11 per cent of global greenhouse gas emissions, but if you add in other activities like storage, packaging, food waste, things like that, it goes up to as much as 37 per cent. It's a huge problem.
One area that has attracted huge interest in the last couple of years is plant-based protein. Lab-grown meat is an area where there's a lot of innovation, a lot of people are trying to get it right. Farmers can use technology like drones or satellites to use exactly the right amounts of water and fertiliser for their crops. There are apps that you can use now where it will tell you what sort of food the consumers are throwing away, and then it will help the restaurant to produce less of that food and more of another kind of food.
In order for some of this new technology to work we do need investors to back us. And fortunately, that is happening. Investment in food start-ups doubled in 2019 to hit more than $1bn. It's driven a lot by consumers changing their eating habits, it's driven a lot by investors backing this new technology, and in terms of governments what they can do is introduce stricter regulations on food waste, for example, on recycling, on energy efficiency. That's one of the big areas, generally in climate change, where governments can really get involved.
Tech has been a big disruptor in many other industries, as we know. So far, it hasn't made that many inroads into farming. That's good, because it means that there's a lot of room for development.
So another area that's changing quite rapidly is the interest in sustainability linked loans, where banks are making loans to companies, and the interest rate that they pay on that loan will fluctuate according to whether they're hitting certain ethical or environmental targets. Green bonds are a really quickly, rapidly growing area of finance. But historically, there have been way more green bonds and renewable energy than agriculture, which has very much been sort of a laggard. When something isn't very developed, you can always say there's a lot of potential in it.
It can be an issue for ESG investors who aren't necessarily rushing to pile into the food industry, because it's quite hard to measure the food industry sustainability, because you have a lot going on. You've got things like packaging, transport, long supply chains. So it's not just about start-ups. At the moment, there's a lot of interest in the new guys, the smaller players, the new technology. But we're also seeing that the larger, more established food companies - household names - are also backing this kind of thing.
You can compare it to other industries, like the oil and gas industries. Traditional food companies can pivot their business models more quickly than an oil and gas company, so it can become more sustainable more easily than a big oil major.
In terms of disruption to the food industry, we're sort of in the foothills of that happening at the moment, which means there's a long way to go, but that it's also quite exciting.