Investors will have to consider their ability to influence the long-term sustainability of food supply chains, according to First State Super’s chief investment officer Damian Graham.
Speaking in Sydney, Mr Graham said issues relating to production, utilisation and wastage would become increasingly critical as global food demand is predicted to grow by more than 10 per cent each decade during the next 30 years.
First State Super has around $1 billion invested in the agriculture sector, but this could grow substantially once it completes its potential merger with VicSuper. The pair would create Australia’s second largest super fund, managing $120 billion in members’ savings.
Some of First State Super’s more recent investments it listed include the sale and leaseback of land for almond production along the Murray River and the ownership of facilities to support poultry production on a rent by area basis. However, there have been concerns there will not be enough water come summer for the boom of almond farms along the Murray-Darling basin.
To date, much of the focus on food investments has been reported to be based on the growth of the Asian middle class and subsequent increased demand, but Mr Graham said this needed to be complemented by the long-term supply-side considerations such as environmental impact and sustainability.
“When we’re thinking about our job as a responsible investor, we’re really thinking about having a positive impact on society and the communities in which our members retire,” Mr Graham said.
“Through our investments in food and agriculture, we are seeking to continue to optimise the efficiency of production around energy, water and other inputs to help meet increased global demand in a more sustainable way; while continuing to meet our obligation to provide our members with the best possible investment returns.”
He outlined four issues impacting the future of food: utilisation and waste, production, meat substitution, and distribution and storage.
“Addressing these issues is important for investment decisions and for the future of food supplies across the globe,” Mr Graham said.
“Innovations such as ‘clean meats’, just in time food delivery and ‘super glass houses’ will be important developments driven by investment in technology.”
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio.
You can contact her on [email protected].
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