This time around, investment and innovation, not charity, will support the drive to end global food insecurity and reduce carbon emissions.
Ahead of the next United Nations Climate Conference, known as COP 27, Elysabeth Alfano and Kubra Koldemir lay out the case for plant-based impact investing as a solution to growing global food insecurity.
This week, 40,000 delegates, media and more than 100 world leaders gather for the United Nations 27th Climate Change Conference (COP 27) at Sharm El Sheikh, Egypt. Here, at this vast desert caravanserai on the Red Sea, there is a new group of impact investors and entrepreneurs joining the throngs of bankers, energy executives and environmental diplomats who have come to this ancient land to haggle over the future of human civilization.
These new climate influencers will join COP climate veterans inside the conference’s official “blue zone,” at the new UN Food and Agriculture Organization (FAO) and The Rockefeller Foundation-funded “food system pavilion,” located a stone’s throw away from the official climate negotiations.
Here, inside a giant hall, delegates, media, investors and climate activists will convene to discuss pressing global food and water issues, as what is known in UN parlance as “food security” officially joins the COP agenda, long dominated by energy, finance and atmospheric environmental issues.
The first “Food COP”
It is remarkable that it took 27 climate conferences to understand that what we grow, raise, eat and drink has as profound an effect on the earth’s atmosphere. The global food system responsible for feeding more than eight billion people is also responsible for more than one-third of all greenhouse gas emissions (GHGs). It is also the primary driver of biodiversity loss, according to a recent report by the UN Environmental Programme.
As a result, the temperature of the earth’s atmosphere continues to rise to alarming levels while more than 193 million people face acute food insecurity across 53 countries and territories.
The global food system responsible for feeding more than eight billion people is also responsible for more than one-third of all greenhouse gas emissions.
Crisis and opportunity
But what is seen by most COP delegates as an increasingly dire threat is known to a growing number of innovators, investors and entrepreneurs, who are also gathering at COP, as an unprecedented opportunity to accelerate the transition to a more climate-friendly, plant-based global food system.
With the world’s population expected to grow to almost 10 billion by 2050, new ways to “reinvent” food, once considered science fiction or fringe countercultural ideas, are now getting renewed focus – and funding – from governments and investors looking to dramatically scale lower carbon food production – and do it fast as countries urgently look for new ways to feed more mouths with less impact on the environment.
For a small band of contrarian-inclined investors, this alternative plant-based food theme also offers a unique opportunity to diversify away from well-funded climate technology industries like renewable energy and electric vehicles.
Investing in plant-based innovation and alternative proteins
Canada, the European Union, Singapore and China are investing millions in research for resource-saving plant-based innovation, including proteins – plant-based and cell-based – and precision fermentation technologies for developing the rapid growth of microorganisms to make large amounts of protein-rich food.
Canada, for example, recently announced that it would invest $100 million in its plant-based industry. The European Union plans to invest 10 billion euros in a green transition program focusing on plant-based proteins.
Replacing meat with “alternative proteins”
Perhaps the most promising focus of research and innovation is the rush by governments to invest in alternatives to meat from livestock, a source of close to 35 percent of all the world’s carbon emissions
Investors are focusing on what is known as “cellular agriculture,” in which meat is produced in cell cultures rather than directly from animals. This alternative way to make protein requires less land, water and time to produce than meat and dairy while emitting fewer greenhouse gases.
Less gas, more protein
The implications for the climate are profound. The production of meat worldwide accounts for nearly 60 percent of all greenhouse gases from food production, which is double the emissions of the entire United States. Raising cattle, for example, produces 31 times more CO2 emissions per calorie than growing the soybeans that comprise tofu.
Food and national security
Interest in meatless protein is also growing as countries seek to reduce their dependence on imported meat not only for climate-related reasons but also for matters of national security.
Take the tiny Southeast city-state of Singapore, where securing a steady food source has become a security imperative. Like many countries, Singapore, which only produces 10 percent of its own food, is increasingly susceptible to supply chain disruptions caused by future pandemics or regional political squabbles.
Raising cattle, for example, produces 31 times more CO2 emissions per calorie than growing the soybeans that comprise tofu.
Not surprisingly, given its remarkable ability to adapt to changing economic times, Singapore is now emerging as the Asian food tech capital. It plans to invest $72 billion in its “30 by 30” plan – to produce 30 percent of its nutritional needs locally by 2030.
In 2020, Singapore made history when it became the first country in the world to give regulatory approval for the sale of cell-based meat by Eat Just, Inc.’s Good Meat. Plant-based food now joins finance, crypto and blockchain technologies as favored economic sectors of the nation-state’s financial planners.
Within Europe, another agile nation-state is also championing the advancement of cultivated meat – the Netherlands. One of the world’s great dairy cultures, it is home to Most Meat, the first company to debut a cultivated meat burger. The Netherlands has just pledged 60 million euros (US$58.5 million) to develop a cellular agriculture ecosystem.
And, of course, there is Israel. Surrounded by desert and hostile neighbors, Israel seeks to expand its ag-tech sector, which is already considered one of the world’s most sophisticated.
Israel’s Innovation Authority recently announced its plan to allot a portion of a $69 million investment into what is known as “cultured meat” produced by culturing animal cells in vitro using tissue engineering techniques pioneered in regenerative medicine.
Superpower rivalry
China also has big plans for plant-based food production because of its drive to achieve national self-sufficiency in everything from energy to medicine and now food.
China has ambitiously declared it will decrease traditional meat consumption by 50 percent. And for good reason. As climate degradation increases, China’s arable land is shrinking, making the country dependent on the rest of the world to feed its 1.4 billion people.
It has set ambitious targets to reduce traditional meat consumption by publically investing in a whole host of public-private investments in plant-based alternatives, including open microalga cultivation systems such as open ponds, tanks and raceway ponds, and through controlled closed-cultivation systems using different types of bioreactors.
As one of the world’s great consumers and exporters of beef, even the United States is getting into the plant game. Two members of the House, Rep. Raja Krishnamoorthi (D-Ill.) and Rep. Ro Khanna (D-Calif.), introduced the Security of the Economy, Climate and other U.S. interests with Recent and Existing Food alternatives (SECURE Food) Act which would require the Director of National Intelligence to submit an intelligence report on the effects of increased production and consumption of alternative proteins on American national security.
Don’t forget water
Of greater concern to the United States is ensuring adequate supplies of freshwater. (See John Howell’s story on the drying up of the Mississippi River). The Biden Administration is developing a first-ever White House action plan for global water security.
Capital flows are promising. A record $5 billion was invested in alternative proteins in 2021, surging 60 percent since 2020.
Recognizing that global water security is essential to U.S. national security, Biden’s water plan emphasizes the need to explicitly link water security to national security to improve global resilience, elevate data-driven methods and use resources more efficiently.
Biggest investment opportunity in the “history of mankind”
Once again, where policymakers see an issue, investors see an opportunity. Sustainable water investment expert Thomas Schuman says water security is the “single-largest impact investment opportunity in the history of mankind.” He argues that roughly 40 percent of the world’s population is affected by water scarcity, much of which is linked to animal agriculture, which uses 29 percent of the world’s freshwater supply.
What is next
What remains to be seen is how quickly investment capital can make an impact. Impact investing is increasingly seen as a way to align one’s dollars with one’s vision and values but do it with quantifiable results. As plant-based and water investment sectors grow along with the shift of the food supply system to be more sustainable and efficient, so will the capital that aligns with this early-stage secular trend.
The last two years have seen a rapid expansion of plant-based alternatives to meat, eggs and dairy, with startups, large food companies and retailers launching hundreds of new products. New technologies and novel crop protein sources continue to emerge to enhance end products. In 2021, the investor base grew by 40 percent, and regulatory wins helped move the industry toward a level playing field.
But will it be enough, and can it be delivered with speed and urgency?
Capital flows are promising. A record $5 billion was invested in alternative proteins in 2021, surging 60 percent since 2020. That is still a tiny percentage of total agricultural investments, but it is a strong signal that investors have a sustained interest in planet-friendly alternatives. Private capital may just be the key ingredient necessary to avoid climate-induced food catastrophes.
Like food, we have no time to waste, but we do have the capital to invest. So expect some interesting discussions – and perhaps deals – emanating from one of the most optimistic pavilions at COP in Egypt.
Elysabeth Alfano
Featured photo: JUST Egg
