Investor network’s new Senior Policy Advisor encouraged by prevalence of food systems action at COP28, while urging greater alignment of shareholder initiatives.
Tackling the mounting risks posed by biodiversity loss to food systems will be a key focus for FAIRR Initiative’s new Senior Policy Advisor, Greta Davison, as global attention on agricultural supply chains increases.
“There are emerging risk for investors as biodiversity services are essential to the economy, particularly along agricultural supply chains,” Davison told ESG Investor. “Intensive animal agriculture is the leading cause of deforestation and largest use of water globally among other biodiversity impacts”.
Deforestation’s impact on biodiversity and food systems will be pivotal in Davison’s new role.
The nature- and climate-related risks and impacts of food systems were a focal point at Dubai’s COP28 after a year in which FAIRR’s Climate Risk Tool estimated that half of the largest listed livestock companies could lose up to US$24 billion due to climate-related costs. This was followed by an avian flu outbreak in September with economic costs surpassing US$2.5 billion.
In previous roles, Davison helped develop agricultural policy at New Zealand Parliament and the New Zealand Ministry for Primary Industries (MPI). At the latter, she worked on regulatory and economic policy across the livestock sector, and acted as UK and EU regional specialist where she worked on trade policy.
This previous experience has provided her with a “solid regulatory foundation”, increased her sustainability knowledge, and built her stakeholder engagement skills, which she described as “crucial [to] navigating ESG frameworks and investor expectations”.
At FAIRR, Davison will also engage with governments, regulators, industry bodies and investors to boost intensive agriculture and livestock production policy understanding, and draw attention to sustainable policies and practices.
FAIRR is a collaborative investor network with the objective of increasing ESG risk and opportunity awareness in the global food sector. It has over 400 members globally, collectively representing more than US$70 trillion in AUM.
“Central role” at COP28
Food systems was high on the agenda in Dubai last month, with several initiatives unveiled holding the potential to increase sustainability, reduce GHG emissions and boost food security.
COP28 saw the UN Food and Agriculture Organization (FAO) release a preliminary roadmap to enable the global agri-food system achieve UN Sustainable Development Goal 2 (ending hunger) while putting emissions on a path to compatibility with 1.5°C targets.
The roadmap could support implementation of the pledges made by more than 150 countries which signed up to the UAE Declaration on Sustainable Agriculture, Resilient Food Systems and Climate Action on the first day of COP28. Davison particularly highlighted the “political ambition” set by the declaration’s signatories.
Jeremy Coller, Chair of the FAIRR Initiative, described COP28 as the “turning point for a seismic shift in agri-food policy and investment in the decade ahead”.
Davison agreed COP28’s focus on food systems was “very encouraging”, noting it was the first time food has “played such a central role” at COP.
However, she stressed further progress on generating and allocating climate finance is required, specifically for agriculture which only accounts for 4% globally. The UAE declaration also noted the need to reform subsidies, alongside adopting just transition principles and accelerating GHG emissions reductions.
At COP29, the FAO is expected to produce a regional roadmap with greater impetus on costs and investments, while a third, scheduled to be delivered at COP30 in 2025, is set to establish country action plans, monitoring and accountability.
FAIRR will closely work with investor members on both biodiversity and deforestation ahead of the Convention on Biological Diversity ‘s COP16 in Colombia later this year.
Increasing initiative alignment
Investor engagement on nature themes has risen generally but has become more concentrated on policy outcomes – such as the Principles for Responsible Investment’s Global Biodiversity Framework-aligned Spring.
“The increased focus on nature engagement as a whole stems from a realisation of the interconnectedness between biodiversity and climate, and the need to have a more holistic approach to engagement,” Davison said.
However, she noted the market had seen a “proliferation of initiatives”. This includes the government-focused Investor Policy Dialogue on Deforestation and Nature Action 100. The World Benchmarking Alliance also has a Nature Benchmark which assesses 350 firm across the food and agriculture value chain, and is due to launch a Collective Impact Coalition to engage with firms on nature later this year.
“There needs to be better emphasis on improving the alignment and coordination of different initiatives, most of which are not focused on the food sector,” Davison added. “Ultimately, we are all looking to address risk in the food system, and therefore alignment is crucial to maximise impact.”
FAIRR is involved in initiatives promoting a whole-system view of regenerative agriculture, stemming from its global work with investors and food companies.
Davison noted regenerative agriculture alone is insufficient to drive the change required on climate and biodiversity and with no leading authority currently setting standards or definitions there is “still too much fragmentation in the space”.