Sustainable food systems and systemic risks

Following Greenbank’s recent report 'Sustainable food systems and systemic risks', stewardship and engagement lead Sophie Lawrence explains why the Investor Coalition on Food Policy exists, why investors should focus on sustainable food systems, and the role the Coalition plays to promote health and resilience. Watch Sophie's introduction to the topic below or read the full report here. 

Read the full report here. 

Introduction from Sophie Lawrence

Stewardship and Engagement Lead, Greenbank 
Chair, Investor Coalition on Food Policy

Greenbank’s vision is to empower our clients to invest their money as a force for good, together championing the transition to a healthier planet and a more equitable society. Sometimes, this involves us working to inform policy that helps sustainable investing thrive. Public policy can play a powerful role in shaping and incentivising progress toward sustainable development by setting the rules of the game. Throughout the economy, ‘externalities’ can occur - which is where the production or consumption of goods or services results in costs or benefits to a third party which are not reflected in the market price of the activity. For example, companies which produce unhealthy food do not pay for the healthcare required to treat diet-related health problems. Policies and regulation are often needed to establish frameworks that require broader social or environmental impacts to be reflected in the cost of the product being sold.

This holds true when we are thinking about how to effectively address some of the longer-term systemic risks and opportunities our economy faces, from climate change to biodiversity loss and poor nutrition. As sustainable investors, we can help to mitigate whole-system threats through strategic engagement with policymakers and standard setters. Engagement with policymakers also creates a supportive enabling environment for sustainable investments, as it can create a level playing field that rewards companies and investors for higher levels of social and environmental performance. Managing and mitigating long-term systemic risks is also consistent with our fiduciary duty to act in the best financial interest of clients and their beneficiaries.

Greenbank has had long-running engagement with food sector companies on a wide range of environmental and social issues, both through direct dialogue with companies and through collaborative engagements such as the Food Foundation’s Plating up Progress initiative, the Access to Nutrition initiative and ShareAction’s Healthy Markets initiative. Through these collaborations we identified structural challenges and externalities that we believed could only be effectively addressed through government policy. Ultimately, we felt that if the challenges are left for the market to address, a widening gap would exist between leaders willing to take voluntary action and laggards who would not, and it will be difficult to create the transformational change to our food environment which is required.

Fast forward to 2024 and the Investor Coalition on Food Policy now comprises over 30 investors with over £6 trillion in assets under management or advice. 

In July 2021, the National Food Strategy was launched, a ‘farm to fork’ review of England’s food system, commissioned by the Department for Environment, Food and Rural Affairs. This provided a window of opportunity for Greenbank to launch a project to bring together investors to engage with parliamentarians on the risks and opportunities facing the food system and what policies and regulation investors would like to see introduced. Fast forward to 2024 and the Investor Coalition on Food Policy now comprises over 30 investors, with over £6 trillion in assets under management or advice. Health is one of the three priority pillars in our engagement strategy for 2024, closely aligned to one of our eight sustainable development themes: health and wellbeing. Alongside
our work with the Coalition, we also have strands focused on access to medicine, air pollution and worker health. You can read more about our engagement approach and strategy here. Investors now have a seat at the table as part of food policy discussion, including being part of government working groups deciding what data should be reported by companies as well as contributing to House of Lords reviews on the topic and holding several bilateral meetings and round tables with parliamentarians. The report shares the story of the Coalition so far, looking first at the why the coalition exists and what its core aims are and then exploring its activities and impact to date.

Read the full report here.