Feeding billions without cropping our climate ambitions

Feeding billions without cropping our climate ambitions

8 000 000 000. On November 15, 2022, according to the United Nations, the world population reached eight billion people. Although the growth rate is slowing, the UN projects that by 2050 there will be 9.7 billion on the planet.

2050 is also the year where countries and companies will have to reach their net zero targets, while providing sufficient food for the global population. As the Sustainability Accounting Standards Board materiality map makes clear climate change and food production are closely intertwined. The food and beverage industry is exposed to material risks related to climate change including: greenhouse gas emissions, energy management and water management among others.

Considering food emissions is crucial as they could consume most of the carbon budget available to remain under 1.5°C or 2°C. Indeed, Our World in Data estimates that taking a business-as-usual scenario and population, dietary and agricultural trends, the cumulative greenhouse gas emissions from food production between 2020 and 2100 would use 96% of the carbon budget available to keep global warming under 2°C, with a 67% chance, leaving only 49 billion tonnes of CO2 warming equivalents for all non-food sectors.


Food emissions and the carbon budget

Source: Our World in Data, 2021


Action in the agri-food sector is urgently required. But where to start? According to McKinsey major contributors to agricultural emissions include enteric fermentation (a digestive process in ruminants that produces methane), crop production for both cattle and human consumption, and land-use changes. These factors are responsible for about three-quarters of the greenhouse gas emissions from food production.


Major contributors to agricultural emissions

Source: McKinsey 2020


Reducing enteric fermentation through agri-tech innovations

To reduce the biggest carbon contributor in the agriculture sector, namely enteric fermentation, companies like DSM-Firmenich have developed innovative solutions such as Bovaer. According to the company, this feed supplement helps to reduce methane emissions from cattle by at least 30% from dairy cows and 45% from beef cattle.

Producing more with less: how to improve crop yields?

Another way the food sector can decrease its share of the global carbon budget is by improving crop yields. Research published in Science magazine in 2020 has shown that higher yields could reduce food emissions by 14%, from 1,356 billion tonnes to 1,162 billion tonnes of CO2 equivalent. Achieving higher yields could be facilitated using fertilisers and palm oil.

Fertilisers

Fertiliser can help increase yields by providing essential nutrients to crops to ensure optimal growth. This enables food producers to maximise agricultural productivity to meet global food demands while reducing pressure on natural ecosystems leading to reduced land conversion and deforestation.

Fertilisers have been heavily criticised for their negative environmental consequences which include water pollution, eutrophication and high greenhouse gas emissions in production. While at present they are generally produced using ammonia and fossil fuels (normally natural gas), the use of renewable sources for fertiliser production will result in ‘cleaner’ nitrogen and the emission of fewer greenhouse gases. A second criticism is that reliance on fertilisers impacts soil health. However, when sustainably managed and applied correctly, fertilisers can actually improve soil.

Farm practices can incorporate nutrient management which enable the more sustainable use of fertilisers. By analysing the soil’s nutrient content, application can be targeted using slow-release and controlled-release fertilisers to meet crop requirements, providing plants with essential nutrients that may be deficient in the soil. Consequently, farmers can optimise the use of their land, water and energy. Lastly, these technologies reduce waste and minimise the risk of nutrient runoff or leaching.


How to reduce global greenhouse gas emissions from food?

Source: Our World In Data, 2021


Palm oil

Palm oil has been widely criticised for its devastating impacts on the environment, largely because of deforestation. The ecosystems that disappear to produce palm oil are generally carbon sinks and as a result, according to the United Nations Environment Programme, this deforestation could cause up to 10% of additional global carbon emissions. However palm oil has a yield per hectare that is four to twenty times higher than other vegetable oils (sunflower, rapeseed, soy) and therefore has the potential to reduce land use change and deforestation.

It is also the most widely used oil in countries with growing populations. It has benefits including the ability to withstand high cooking temperatures, making it useful for frying and a long shelf life.

Conclusion

To reach the necessary reduction in emissions in the food value chain, we will need a combination of solutions. These will range from technological innovation in farming to changes in consumer habits (plant-rich diets) and solutions to tackle food waste. Even if we implemented all these changes at 50%, it would still be a significant step in the right direction. However, emissions from food production would still consume the entire global carbon budget needed to limit the temperature rise to 1.5°C (with a 67% chance), according to Science magazine’s research.

In sum, feeding a rapidly growing global population while meeting ambitious climate targets is a challenge, but not an impossible one. Reducing greenhouse gas emissions from the agriculture sector, particularly through advances like methane-reducing feed additives and improved crop yields, is essential. Fertilisers can play a role if used sustainably and palm oil presents a viable option for reducing land-use change. Finally, the importance of engagement with companies active in this sector, using dedicated data and research and emphasising materiality, cannot be overstressed.

Disclaimer

Marketing Communication. Investing incurs risks.

The views and opinions contained herein are those of the individuals to whom they are attributed and may not necessarily represent views expressed or reflected in other DPAM communications, strategies or funds.

The provided information herein must be considered as having a general nature and does not, under any circumstances, intend to be tailored to your personal situation. Its content does not represent investment advice, nor does it constitute an offer, solicitation, recommendation or invitation to buy, sell, subscribe to or execute any other transaction with financial instruments. Neither does this document constitute independent or objective investment research or financial analysis or other form of general recommendation on transaction in financial instruments as referred to under Article 2, 2°, 5 of the law of 25 October 2016 relating to the access to the provision of investment services and the status and supervision of portfolio management companies and investment advisors. The information herein should thus not be considered as independent or objective investment research.

Investing incurs risks. Past performances do not guarantee future results. All opinions and financial estimates are a reflection of the situation at issuance and are subject to amendments without notice. Changed market circumstance may render the opinions and statements incorrect.

要查看或添加评论,请登录

社区洞察

其他会员也浏览了