Food wastage

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One-third of the food the world produces is wasted

In Europe, 50% of the food produced goes uneaten. Each year, the 27 European Union member states generate over 89 million tonnes of food waste – that’s 179 kilos per person. According to the EU, by 2020 this figure will have risen by 40% to 126 million tonnes. Worldwide, the figures are alarming too. One-third of the world’s food is lost or wasted at a cost of some USD 1 trillion.

The environmental cost? USD 700 billion a year

Beyond the economic loss, food wastage has a massive environmental cost of USD 700 billion. The effects of climate change are making themselves increasingly felt and are already hitting numerous regions around the world that are suffering weather extremes. In addition, by 2025, more than half the world’s population will be living in areas of water stress due to rising temperatures. So reducing greenhouse gases is crucial for the future of our planet.

Food wastage alone accounts for the production of 3.3 billion tonnes of CO2 equivalent – that’s 7% of total greenhouse gas emissions. What has to be taken into account just as much are the resources used to produce this wasted food – for example, producing 1kg of beef requires 5-10 tonnes of water. Each year, 250 cubic kilometres of water – enough to fill Lake Geneva three times over – is used in the production of food that is lost or wasted.

Global losses – for different reasons

It must be pointed out that, whereas developing countries mainly suffer food loss during agricultural production, medium to high income regions see most food wastage at the retail and consumer levels. In terms of the former, the problem mainly involves the methods and technologies used, because the way in which crops are harvested and stored is inefficient. In richer countries, it’s about how food is stored in shops as much as it is about the end consumer.

So for better food safety, storage methods – in particular packaging – need perfecting. And food wastage is just as much about educating consumers, because even food that is still edible is being thrown in the bin.

In pursuit of innovative solutions

Some food sector companies, keen to lessen their environmental impact, are working towards finding solutions to reduce food wastage and loss. One such is Sonoco, an innovative company listed on the Dow Jones Sustainability World index for the sixth year running. Sonoco manufactures smart packaging 1that enables food to keep better, and it recycles over three million tonnes of paper, plastic and metal.

Another company actively involved in reducing food wastage is Sealed Air Corporation, which produces more environmentally-friendly packaging that keeps food products fresher. Sealed Air aims to come up with innovative ideas that will improve food safety and reduce the environmental impact. For example, it has created lighter packaging to reduce the amount of fuel used in food transport.

Sustainable and Responsible Investing is one of the nine themes which we think reflect investors’ key priorities this year.
Linked to those themes we have chosen funds which we believe represent the most relevant solutions to the challenges of the current market environment as well as the evolving needs of our clients.
Alexandre Jeanblanc

Investment Specialist, SRI

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