INVESTING TOWARDS SUSTAINABLE LIFE ON LAND



As a response to the climate emergency and social crises, the United Nations has established a set of Sustainable Development Goals, to be achieved by 2030. These are organized in 17 concrete objectives to tackle global issues in order to reach a sustainable and peaceful future for everyone, everywhere. The SDGs aim to bring together all countries, private companies, and individuals to promote a prosperous future while protecting the planet. The achievement of a particular goal is often interlinked with the others, as will be seen in our series of articles.


In this article, Kanopé analyzes investment alternatives which contribute to the 15th SDG, aiming to sustainably manage forests, combat desertification, halt and reverse land degradation, and halt biodiversity loss.



Our health and survival largely depends on nature, which provides us with our oxygen, regulates the weather patterns, and offers us food, feed and fiber. However, human activities and climate change are putting it under increasing pressure and are causing major challenges for sustainable development.


Human activities such as road building, mining, hunting, urbanization, and logging are disrupting ecosystems and posing serious problems to human health. Most recently, the Covid-19 outbreak, which emerged from Wuhan’s wet food market has been a reminder that excessive encroaching on forests and other wild landscapes, which harbor an abundance of animals and plants species, are facilitating the crossing of pathogens from animals to humans. Closer contact with wild animals and increased connectivity and globalization allow viruses to spread more quickly, which can have dire consequences.


Forests play a major role in fighting climate change, notably through carbon-storing. Investing in land restoration is crucial to improve livelihoods and reduce vulnerabilities and risks for the economy. Urgent action is needed to reduce the loss of natural habitats and biodiversity, which are not only vital to our survival in terms of global food and water security, but are also part of our common heritage. There are many small gestures we can implement in our daily life to mitigate our impacts, such as recycling eating locally and sustainably grown food, consuming only what we need and reducing our energy consumption.


The targets of this SDG include mobilizing significant resources at all levels to finance sustainable forest management and provide adequate incentives to developing countries to advance towards conservation. Promoting fair and equitable sharing of the benefits arising from the use of natural ressources and taking urgent and significant action to reduce the degradation of natural habitats and halt the loss of biodiversity are also objectives linked to SDG 15.

KEY FIGURES


Forests are extremely important for humanity, covering around 30% of Earth's terrestrial surface and home to over 80% of all terrestrial animal, plant and insect species. Around 1.6 billion people depend on forests for their livelihoods, including 70 million indigenous people. Forests are important sources for clean air and water, and are key to combating climate change due to their role in carbon storing and regulation of hydrological cycles. Yet, every year 13 million hectares of forests are lost. Deforestation is increasingly linked to the expansion of agricultural land, and this trend is likely to continue given the growing global population.



The persistent degradation of drylands has led to the desertification of 3.6 billion hectares, disproportionately affecting poor communities who see their food security and access to water greatly reduced. Each year, 12 million hectares are lost (23 hectares per minute) due to droughts and desertification. This has an impact on health as well as education, eroding opportunities for sustainable economic development. Once again, it is often the poorest populations who are most vulnerable. 2.6 billion people directly depend on agriculture for their livelihoods, but 52% of land used for this purpose is moderately or severely affected by soil degradation, putting jobs and food security at risk.


It is difficult to grasp the value of the Earth's systems and biodiversity, and the beauty of landscapes on the planet. It is estimated that ecosystems are providing $125 trillion in value to human livelihoods and well-being every year. 80% of the human diet is provided by plants, yet only 3 cereal crops (rice, maize and wheat) provide 60% of energy intake. This lack of diversity is dangerous because it reduces ecosystems’ resilience and increases the crops’ vulnerability pests, pathogens and climate change. In fact, from the 8,300 known animal breeds, 8% are extinct and 22% are at risk of extinction, which could have dire effects on the well-functioning of entire food chains and ecosystems.


WHAT INVESTMENT SOLUTIONS EXIST TO CONTRIBUTE TO THIS SDG?


It is nowadays possible to demand more than a financial return adapted to a risk level from your investments. Impact investing is placing a third dimension at the core of your investment strategy: to have a positive impact on the world.


Regarding life on land, the investment themes* are the following:

  • Animal welfare

  • Sustainably managed landscapes

  • Biodiversity and conservation

Before moving forward with the presentation of investment solutions we have identified, we’d like to remind you that the ensuing presentation does not constitute a buy, sell, subscription or advice in financial investments offer from Kanopé Impact. This presentation analyzes data and numbers without accompanying them with comments or value judgements regarding their worth for the reader. This article seeks to illustrate how an investor’s capital can contribution to solving global issues. The performance or numbers mentioned are estimates from asset managers communicated over a given time period and are therefore in no way a guarantee of the value of said investment in the future. If you wish to invest financially, please contact your financial advisor who will be able to guide you towards your objectives given your civil, fiscal, and asset situation while ensuring an adequate investment.

Animal welfare


The demand for meat-based diets is increasing in developing and industrial countries, leading to the intensification of livestock production and massive land-use changes. Indeed, the livestock industry occupies 83% of the world's farmland but provides only 37% of the world's protein. The objective is to reduce animal suffering and animal-protein consumption which is inefficient in terms of land use, while ensuring a healthy diet for all.


AgFunder is a food tech and agri-tech venture capital which invests in startups creating non-animal based protein alternatives, including plant-based meats, cellular agriculture, and the development of novel technologies for this emerging industry. Its New Carnivore fund will dedicate $20 million with up to 50% reserved for follow on over 10 years for 20 pre-seed and pre-IPO investments in startups pioneering the alternative protein sector.


Regarding exchange traded funds, US Vegan Climate, managed by Beyond Investing, provides market-capitalization exposure to US companies and excludes from its portfolio companies that harm animals, involve animal testing, or manufacture animal-derived products. It also has a humane approach, caring for more than animals, by excluding companies involved in drugs, military and arms manufacturing, and companies that lack transparent, credible policies on human rights. Investing in Beyond Investing's US Vegan Climate Index, one dollar of revenue will create 2.6 times less greenhouse gases emissions and waste 6 times less water than for a dollar of revenue produced by conventional S&P 500 investments.


Sustainably managed landscapes


Healthy landscapes and water systems are essential to our survival : they provide food, water, clean air, a stable climate, biodiversity, good health, and security. However, overgrazing, overexploitation, the building of infrastructure and pollution are putting a strain on ecosystems.


Agri-tech is a field seeking to use technology in farming to improve efficiency and profitability. For example, PastureMap is a software that helps farmers to easily and sustainably manage their cattle through tools such as scenario planning, carrying capacity calculation, and grazing periods tracking. Besides improving profitability, the software also facilitates soil restoration, carbon sequestration, and the maintenance of clean water, while feeding local communities.


Biodiversity and conservation


According to the United Nations Environment Programme, the restoration of 350 million hectares of degraded land in the next 10 years could generate an extra $9 trillion in ecosystem services (services provided by nature) and take an additional 13 to 26 gigatons of greenhouse gases out of the atmosphere.


Cultivo seeks to contribute to this regeneration of land by providing a simple way to invest in land restoration projects at scale. It is a platform putting in relation investors who often lack the ability to scale and access to reliable data, and land owners who face a funding gap and complex certification process. Cultivo aims to unlock $3 billion of investments and capture 1 million tonne of CO2.


Karner Blue capital has created the Animal Impact Fund to invest in global mid- and large-cap companies that are industry leaders with respect to animal welfare performance and biodiversity protection. It focuses both on farmed and wild animals and invests in industries as diverse as healthcare and textile through thorough analysis of individual equities. Since inception, the fund has had a 4.16% return for investors, which does not predict future returns.


AND NOW? If you want to become an impact investor, contact your financial advisors specialized in impact investing. They will be able to support you in measuring and connecting the three dimensions that are risk, return and impact, according to your property status and investor profile.


#ImpactInvesting #FinanceDurable #ODD #FamilyOffice #BroccoliVirus#ClimateChange

*Toniic - 2020

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