Courtesy of The Financial Times.

Courtesy of The Financial Times.

December 23, 2019

Dig In | Woke Wall Street: Using Private Capital to Fight Animal Agriculture

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“If you are concerned about human health, if you are concerned about climate change, [then take a look at] animal agriculture, [which is] number two or three in terms of the contributors to climate change.” This is how Adam Bendell ’83, CEO of Toniic, began his interview with me at the Financial Times Investing for Good USA Conference on Dec. 5.

FT Investing for Good USA — notably referred to as “woke Wall Street” by many attendees — is a yearly conference hosted by the Financial Times to discuss the latest and greatest in the emerging field of socially responsible investing (SRI). SRI, or impact investing, is an investment strategy that seeks both financial return and positive social or environmental change. Socially responsible investing is about doing good and doing well — making money by investing in the future you want.

At this year’s FT Investing for Good USA, institutional investors, wealth managers, foundations, government, family offices, social entrepreneurs and others discussed how innovative finance could support meeting the United Nations’ Sustainable Development Goals — a collection of 17 global goals designed the United Nations to be a “blueprint to achieve a better and more sustainable future for all” — while also providing a financial return.

Courtesy of The Financial Times.

Courtesy of The United Nations.

The big question at the conference this year: How does animal agriculture impact human health and climate change and how can we improve agriculture through business and investing?

More than 33% of U.S. land is used for pasture — by far the largest land-use type in the contiguous 48 states. And nearly 25% of that land is administered by the federal government, with most occurring in the west. There’s a single, major occupant on all this land: cows. Between pastures and cropland used to produce feed, 41%of U.S. land in the contiguous states revolves around livestock.

This agricultural imbalance engenders an unhealthy society: 96.4% of students fail the guidelines set by United States Department of Agriculture for fruits and vegetables intake. In total, 36.9% of students are overweight, obese or morbidly obese, and the total impact of obesity and its related complications on the United States’ economic output has been estimated at roughly the same expenditure as the 2018 defense budget ($643 billion) and Medicare ($588 billion). At the same time, agriculture causes around 9% of greenhouse gas global emissions, driven by livestock such as cows.

The investors at FT Investing for Good USA discussed different solutions to this problem. For example, Air Protein, created by Lisa Dyson, is using a proprietary probiotic process to produce food from carbon dioxide. The produce, similar to Impossible and Beyond Meat, offers an alternative to animal meat. Meanwhile, Imperfect Produce “rescues” rejected produce from local farms, wholesalers and grocers and sells direct-to-consumer at discounted rates. As a result, food waste decreases, the company makes money and consumers are happy because they get access to affordable, healthy food. Also, LMP Partners, an asset-management firm, provides financing for farmers to convert from traditional to organic farming.

Courtesy of The Financial Times.

Courtesy of The Financial Times.

Another opportunity discussed was regenerative agriculture, a conservation and rehabilitation approach to food and farming systems. According to Croatan Institute, $700 billion of investment in regenerative agriculture in the next 30 years could not only return $10 trillion, a return on investment of 14.3 times, but could mitigate nearly 170 gigatons of CO2 emissions (GtCO2e). To put that into context, in order to limit global warming to 1.5 degree Celsius, per the United Nations Intergovernmental Panel on Climate Change’s recommendation, we need to remove between 100 and 1,000 gigatons of carbon dioxide from the atmosphere, while we’re still emitting between 39 and 45 GtCO2 per year.

Investors are using different types of investment asset classes — cash, public debt, private debt, public equity, private equity and real assets — to make this impact. Almanac Investments, Fifth Season Ventures, Fresh Source Capital, Renewal Funds and S2G Ventures are the leading investment firms in the regenerative agriculture space.

“We are victims of the leaders on Wall Street who have taught us that business is just about making money.” That is how Jed Emerson, founder of Blended Value Group, ended his panel. Socially responsible investing offers a unique opportunity to make a lot of money and make the world a better place. From animal agriculture to climate change, SRI investors are using money as a tool to solve some of the world’s greatest problems. To quote Georgie Benardete, Co-founder and CEO, Align 17, “Every dollar matters. The moment is now.”

My takeaway is that our investments should align with our values and our goals for the future of our planet. According to The Global Impact Investing Network, there is $500 billion invested globally in SRI, and investors compound annual growth of about 17%. As a reference, this level of growth achieved from impact investing is about three times greater than Cornell’s endowment growth, which increased from $6.9 to $7.3 billion in fiscal year 2019 to deliver a 5.3% return, marking a sharp decline from the 10.6% return of fiscal year 2018. Many, including Climate Justice Cornell, have criticized Cornell for continuing to invest in fossil fuel companies. These investments, of course, run counter to socially responsible investing. The Cornell test case shows two things: first, that socially responsible investing is, in many cases, more profitable than irresponsible investing; and, second, that when we invest our money in great projects such as Air Protein, Imperfect Produce, and LMP Partners, we have the power to make the world a better place for all of its inhabitants.

 

 

Jack Waxman is a sophomore in the College of Arts and Sciences. He can be reached at jwaxman@cornellsun.com. Dig In runs every other week this semester.