With the UK government backtracking on measures to prevent biodiversity loss, a report published today by The Food Foundation warns that if we fail to address biodiversity loss now, it will only lead to much higher economic costs down the line.
The report demonstrates that nature and biodiversity loss are no longer “tomorrow’s problem” and brings together evidence showing that as well as contributing to biodiversity loss, our food system and supply chains are also vulnerable to its impacts. For example, one study shows that a 30% decline in UK pollinator populations over 10 years would cost nearly £200 million a year in lost crop yields. The Food Foundation says these trends can no longer be ignored by the food industry and is calling on investors to play their part in safeguarding nature and biodiversity through their corporate stewardship and financing activities.
The food system is a major driver of nature and biodiversity loss as a result of issues such as deforestation (as forests are cleared to make way for agricultural expansion, animal grazing and feed production) and industrial farming of livestock (leading to water and air pollution through run off waste, antibiotics and hormones as well as emissions of ammonia and methane).
These actions are weakening nature’s productivity, resilience, and ability to adapt, posing major risks to economic stability and competitiveness, national security, food security, and human well-being.
Ironically, the agriculture sector is almost entirely dependent on natural capital for its continued viability, and so will suffer if farming methods and consumption patterns aren’t adapted to preserve and restore the natural environment. Shifting to more plant-rich diets in the UK could make a real difference, reducing by 58% the projected number of species projected to become extinct over the next 100 years as a result of what we are eating.
PwC research shows that over half the world’s GDP is moderately or highly dependent on nature. Yet biodiversity is declining at an unprecedented rate, with extinction rates 100 to 1,000 times above natural levels and rising. In the UK alone, nature loss is projected to reduce GDP growth by between 6% and 12% in the 2030s, which would be a decline greater than that caused by the 2008 financial crisis or the Covid-19 pandemic.
The Food Foundation and the Investor Coalition for Food Policy, a group of 35 member organisations with more than £6 trillion in assets under management and which exists to harness the power of the investment community to engage with the Government on food system related issues, are calling for:-
-Businesses and investors to support climate- and nature-friendly actions such as shifting to portfolios centred around more plant rich diets and innovating and investing in more sustainable and regenerative farming practices.
-Companies to ensure board-level expertise in, and oversight of, sustainability and climate matters, including nature and biodiversity loss as well as climate. Currently only 2% of businesses have board-level expertise on biodiversity or climate.
-Businesses should have a clear idea of the steps they need to take to improve traceability and manage their nature and biodiversity-related risks and impacts, and how long those steps will take. According to the World Benchmarking Alliance, only 5 % of companies across more than 20 industries assess their nature-related impacts, and less than 1% understand their nature dependencies
-Investors to reframe their understanding of nature not as an externality butas an asset to be valued, accounted for and invested in. Short-term investorreturns should be considered against the importance of nature and biodiversityupon which a healthy economy, society and longer-term investors’ returns depend.
Sarah Buszard, Responsible Investor Engagement Lead, said, “Over the last few years, increasing attention has been paid by investors to the nature and biodiversity impacts of the food system, with the recognition of the need for an urgent shift towards more sustainable and healthier diets. Since all of us are dependent on food production and consumption for our very survival, by extension the viability and prosperity of the whole economy – and not just investors in food businesses – is dependent on efficient and sustainable management of natural capital. How we move our food system to one that is healthier and more sustainable is something business leaders, investors and policymakers alike should be thinking about and taking urgent action on.”
Antony Yousefian, General Partner at The First Thirty Ventures, said, “I commend The Food Foundation for urgently calling for action against biodiversity loss. This loss impacts ecosystems and contributes to declining UK health. A teaspoon of healthy soil hosts more microorganisms than entire human population, yet intensive farming has depleted ecosystems and the quality of our food. Investors should actively engage with companies to support sustainable agriculture and diets, delivering nutrient-rich, pesticide-free foods for resilient, nature- and health-positive financial returns.”
Baroness Walmsley , Honorary Ambassador to the Investor Coalition on Food Policy and Chair of the House of Lords Commitee on Food Diet and Obesity, said, “Nature and biodiversity loss are particularly acute material financial risks for the food system. If we are to have a healthy population who can help grow our economy, we need access to healthy and sustainable foods, especially from fruit, veg, beans and other plant-rich sources. And yet fruit and vegetable supply chains are highly vulnerable to climate shocks, as recent fresh produce shortages have illustrated. Rethinking what we eat and how we produce food has the potential to mitigate the harm current food systems are having on the environment, as well as unlocking significant benefits for public health and the economy.”
