Global investment manager Schroders announced today the launch of Schroder ISF Global Sustainable Food and Water, a new global equity portfolio aiming to invest in companies driving the transition towards more sustainable food and water.
The new portfolio will form part of the Schroders Global Transformation Range suite of funds providing investors with long-term exposure to the most powerful and persistent themes shaping the world’s future. The fund will be managed by Mark Lacey, Head of Global Resource Equities, and Portfolio Managers Felix Odey and Alex Monk.
“The development of new technologies improving yield and efficiency and shifting dietary habits towards organic plant-based food, combined with stricter government action expected in agriculture and food packaging, offer huge earnings potential for well placed companies that will disrupt and thrive in changing food and water markets.”
According to Schroders, the food and water system must become more resource efficient and sustainable in the face of mounting challenges, including a growing global population, and sustainability issues ranging from carbon, water intensity, and biodiversity to physical waste, and health. The sectors also have significant sustainability impacts, with the food and water system responsible for around a quarter of global greenhouse gas emissions, and 65% of fresh water usage.
“Regulation, consumer behaviour, and new technology are changing fast. These are now starting to impact the long overdue change that is required to make the whole system less carbon intensive, wasteful and polluting, whilst improving biodiversity and encouraging healthier diets globally. Current estimates suggest this structural shift will require at least $30 trillion of capital reallocation by 2050.
“We believe companies whose products and services are facilitating this movement will be in great demand and can exhibit strong long-term growth potential. That is why SISF Global Sustainable Food and Water will invest across the entire food value chain, allowing us to capture this whole opportunity.”
Schroder ISF Global Sustainable Food and Water will hold between 35-60 stocks, targeting emerging technologies and strategic industries integral to changing the food and water system. The fund will look for opportunities across key value chains, including water management, food production and processing, distribution, and recycling. According to Schroders, the fund is classified under the EU Sustainable Finance Disclosure Regulation as Article 9.
Hannah Simons, Head of Sustainability Strategy, Schroders, said:
“Solving the global sustainability challenges we face requires a huge reorientation of capital. The United Nations suggests that there is a gap of between $5-$7 trillion dollars a year that needs to be invested in new technologies, companies and industries to meet their Sustainable Development Goals which are a ‘blueprint to achieve a better and more sustainable future for all’.
“Investors therefore have a critical part to play as we can deploy capital towards those companies enabling the transition to a more sustainable future. Not only does this new fund seek to address the challenge of providing food and water to our growing global population at the same time, it looks to reduce the environmental impact of these industries.”