First State Super already has A$1 billion invested in the ag sector, including sale and leaseback of land for almond production and the ownership of facilities to support poultry production on a rent by area basis.
Super fund turns to food sustainability
BY KRISTI CHENG
The sustainability of food supply chains has become increasingly important in determining where a $75 billion superannuation fund directs its investments.
First State Super chief investment officer Damian Graham has highlighted the importance of addressing issues relating to production, utilisation, and wastage in agriculture, given the trends in global food demand that would see a 10% growth each decade over the next 30 years.
Much of the focus on food investments to date has been based on the growth of the Asian middle class and the demand they generate he said.
But Graham said this focus needs 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," Graham said.
The issues impacting the future of food can be categorised into the four key issues of food utilisation, food production, food substitution, and food distribution and storage.
These issues cover reduction of food waste through lowering production, reducing the resources consumed; and using technology to increase productivity and efficiency, such as optimising seed, water, and fertiliser usage.
It also involves developing more sustainably grown substitutes to meat, a high carbon contributor; and improving efficiencies in refrigeration and food transportation.
"Addressing these issues are important for investment decisions and for the future of food supplies across the globe," 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."
First State Super has about $1 billion invested in the agriculture sector. Some of the more recent investments 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.
Last month, First State Super and VicSuper signed a Binding Heads of Agreement to merge, with leadership roles and a 2020 deadline confirmed.
The funds said a successful merger would see the creation of a $120 billion fund serving more than 1.1 million members by 30 June 2020.