Technology can support lower-emission food production.GettyImages/AFP/Getty Images
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When Beyond Meat Inc. BYND-Q went public in 2019, its stock surged to around US$65 a share, an almost 165 per cent rise over its initial public offering price of US$25. That was based on speculation that meat alternative products like the ones the company produces would be the wave of the future.
Although the investment rose to as high as US$196 a share a couple of months after launching, it hasn’t been quite as appetizing. Since then, Beyond Meat’s stock has fallen dramatically as consumer demand was not as predicted. The stock currently trades for around US$6 a share.
Yet, more sustainable food systems still offer opportunities to investors – and remain a priority for the sake of the planet.
The use of animals for food, as well as livestock feed, is responsible for 57 per cent of all food production emissions, according to a study published in the journal Nature Food.
Furthermore, a recent special report that Royal Bank of Canada (RBC) produced entitled, “The Next Green Revolution: How Canada can produce more food and fewer emissions,” states that this country’s agriculture and food systems sector produces 93 megatonnes of greenhouse gas (GHG) emissions annually. That’s just more than 10 per cent of our national GHG emissions.
If Canadian farmers maintain current practices and market share, as the global population grows, these emissions could rise to 137 megatonnes by 2050. That’s the same year the world is trying to achieve net-zero emissions.
“This is a critical opportunity to grow food exports across Canada and cut our national emissions,” says Mohamad Yaghi, agriculture and climate policy lead at the RBC Climate Action Institute.
From agricultural technology (agtech) to investing directly in local farming initiatives, investors have many ways to put their money into sustainable food systems.
Current spending on more sustainable food systems amounts to US$20-billion annually, according to the International Food Policy Research Institute. That’s less than 4 per cent of total climate finance. The institute estimated that transforming the food system will require up to US$350-billion annually by 2030.
This significant challenge also creates space for big investment opportunities. According to Bain and Co., developed markets are supporting technology-enabled agriculture from advanced aquaculture (the farming of aquatic organisms) to self-driving tractors. Much of the innovation comes from startups, as large food companies spend only 1.4 per cent of revenue on research and development.
In recent years, exchange-traded funds (ETFs) – such as VanEck Sustainable Future of Food ETF, which trades on the London Stock Exchange, and VegTech Plant-Based Innovation & Climate ETF EATV-A – have given investors exposure to several players in the sustainable food product sector and the agtech industry.
Where might opportunities be found? The RBC report notes seven agtech technologies that can help reduce emissions and offer opportunities for Canada to lead. That ranges from anaerobic digesters (turning animal waste into renewable energy) to controlled environment farming (without the use of a field).
Global independent asset manager Wellington Management Co. LLP recently published a report on why sustainable food systems matter to investors, and noted the potential around precision agriculture – which reduces the use of water, fertilizers and pesticides – and innovative soil management tools.
For investors interested in green, vegan and sustainable food startups, the website Vegpreneur has an investing hub with listings of meat and dairy alternative companies, and organic fruit and vegetable providers.
Knowing where to direct investments can be complex. The Sustainable Finance Hub of the United Nations Development Programme and the Good Food Finance Network are working together to develop a Good Food Investing Framework. It includes a targeted guide to help financial institutions and enterprises evaluate investment opportunities in sustainable food systems that enhance long-term profitability and mitigate risks.
Some European countries are seeing greater investments in the local food processing and distribution infrastructure, as well as moves to encourage local food consumption to stabilize demand for farmers, says Alison Blay-Palmer, founding director for the Centre for Sustainable Food Systems at Wilfrid Laurier University in Waterloo, Ont.
“We want to have a food system that’s better for the environment, and more accessible to people. I think we got a taste of that through COVID because people naturally turned to their regional food systems,” she says.
There are models in Canada for investing in local sustainable food systems. In Nova Scotia, FarmWorks Investment Co-operative Ltd., based in Wolfville, offers small loans to local agricultural and food businesses. FarmWorks runs a Community Economic Development Investment Fund. It enables Nova Scotians to receive tax credits for investing in food-related businesses dedicated to increasing the viability and sustainability of agriculture, providing local food sources and protecting food security.
While the tools exist to invest in local farms and food production, the way we think about food needs to shift, too, says Linda Best, managing director of FarmWorks. For example, in Canada, we’re used to having grocery store access to strawberries in the middle of winter.
“It’s difficult to get people to change their point of view,” she says.
With a global population of 8 billion that’s headed to 9.8 billion in 2050, we’re challenged to feed the world in a way that’s healthy, reduces GHG emissions, and protects our land and water.
With rising concerns around global food security and an increase in catastrophic weather events due to the climate crisis, investors and the public at large may do well to consider sustainable food systems.
“We have a responsibility to make choices for better quality food that supports local production and supports the growth of really good quality food on good land,” Ms. Best says.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
