What caught our eye
Here are three stories that we found particularly interesting this week and why. We also give our lateral thought on each one.
- Shareholder activism over AMR targetting food companies.
- Almost two-thirds of the world's population face water security issues.
- Europe waters down its Pesticide Reduction Act.
Shareholder activism over AMR targetting food companies.
The FT reports that investors are increasingly putting pressure on food companies to address the overuse of antibiotics in food production, particularly those that produce or buy large amounts of meat - roughly 70% of antibiotics are used in the animal farming industry. Companies including McDonald's, Hormel Foods, Brinker, Yum! Brands and Abbot Laboratories have faced investor resolutions on the topic in the past year.
AMR is a macro threat to the sustainability of the human race and other species. It is of a similar level to that of the worst impacts of climate change and biodiversity loss. Together they pose a triple threat with many overlapping underlying causes and exacerbating factors. For AMR, bringing together biological, behavioural, and physical solutions with appropriately incentivising funding we should be able to continue to enjoy the benefits of our microbe partners whilst avoiding their darker side. This is potentially a massive, if complex, investment theme for those who care about sustainability; the potential goes well beyond the pharma industry.
It's a topic we have written on extensively. A starting point is the Primer we published back in October 2022. A lot of focus is on developing new antibiotics and incentivising that development. Behavioural changes such as better stewardship in agriculture as mentioned above are also important. A lesser focused area is how physics and material science can help too.
Link to blogs 👇🏾
Sandy Jayaraj
Sandy Jayaraj
(Built environment / Wellness, Professional)
Almost two-thirds of the world's population face water security issues.
Water - it’s something we take for granted, until we don’t have enough of it, or if it’s too polluted. And yet without it, life is not really viable.
The fine folk at The Visual Capitalist have done their normal excellent job of turning a recent report from the United Nations University into an easily understood graphic.
The bottom line is that countries facing water security issues account for 72% of the world’s population, with an additional 8% of the global population facing critical water insecurity. That includes 4.3 billion people in the Asia-Pacific region alone, and an additional 1.3 billion people across Africa. Many of these countries are grappling with issues including fast-growing populations and drought conditions faster than they can develop the necessary infrastructure to deal with them.
We need to find ways to scale up investment in this area, before the challenge becomes almost insurmountable.
We have written on water before in The Sustainable Investor - both on issues that can arrive and also on potential solutions.
Link to blogs 👇🏾
Sandy Jayaraj
Sandy Jayaraj
(Agriculture / Natural Capital, Professional)
Europe waters down its Pesticide Reduction Act.
Pesticide reduction. The gap between intent and reality on the ground can be large. Back in June 2022, to great fanfare, the European Commission released its proposal (Sustainable Use of plant protection products Regulation or 'SUR') aiming to halve the use of pesticides by 2030, and to promote more sustainable farming practices.
Since then the proposal has faced a wall of objections, and now some politicians are suggesting that the European Parliament, a key party to any EU regulation, may not vote on the proposal before the European elections next year. Which raises the risk that a new parliament might start over again.
It’s hard to know if the opposition is just politics, or if it’s more about farmers livelihoods and the lack of alternative products. Regardless, it’s possible that the SUR may end up being like its predecessor: a non binding directive. The aim back then (2009) was to measure and reduce usage of pesticides. Despite this, sales have remained stable at c. 360,000 tonnes. Even the Commission’s own auditors describe progress as “limited”.
We are generally skeptical about the ability of regulation, on its own, to make the required progress. In parallel we need investors to get behind the alternatives - and get buy-in from farmers on the ground.
One area of concern is that pesticides are a vector for introducing PFAS into the food and water system. This is something we wrote about back in November 2022.
Link to blog 👇🏾
Sandy Jayaraj
(Agriculture / Natural Capital, Professional)
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