Agroforestry / July 20, 2016

UN Food & Agriculture Business Principles

Investing Responsibly Empowers Communities

In recent years, investors and investment funds worldwide have integrated sustainability factors into their asset management practices. Environmental, social, and governance elements are amongst the main concerns when measuring the sustainability and ethical impact of an investment. Similarly, development finance institutions, as key providers of microcredits and supporters of community development in developing regions, have also contributed to the discussion of responsible investing across the agriculture and development sectors.

Sustainability in Food & Agriculture

Given that the NCREIF Farmland Index has consistently outperformed the S&P 500 over the last fifteen years, many individual and institutional investors are turning to the food and agriculture industry. Therefore, in 2014, the United Nations Global Compact launched the Food & Agriculture Business (FAB) principles. The UN Global Compact is a strategic policy initiative for businesses that are committed to aligning their operations and strategies with universal principles in the areas of human rights, labour, environment, and anti-corruption. The FAB principles establish the attributes of well-functioning and sustainable food and agriculture systems, as well as articulate a common understanding of the resources, ecosystem services, and socio-economic impacts needed to build resilience into these systems and the markets that they serve. The FAB principles are designed to complement existing initiatives that advance sustainability in food and agriculture as well as serve as an umbrella over voluntary standards and technical compliance platforms. The principles presented below are a response to the outcome of the Rio+20 conference in 2012.

UN Global Compact Food & Agriculture Business Principles

1. Businesses should support food and agriculture systems that optimize production and minimize wastage, to provide nutrition and promote health for every person on the planet.

2. Businesses should support sustainable intensification of food systems to meet global needs by managing agriculture, livestock, fisheries, and forestry responsibly. They should protect and enhance the environment and use natural resources efficiently and optimally.

3. Businesses should create, deliver, and share value across the entire food and agriculture chain from farmers to consumers.

4. Businesses should respect the rights of farmers, workers, and consumers. They should improve livelihoods as well as promote and provide equal opportunities so that communities are attractive to live, work, and invest in.

5. Businesses should behave legally and responsibly by respecting land and natural resource rights, avoiding corruption, being transparent about activities, and recognizing their impacts.

6. Businesses should promote access to information, knowledge, and skills for more sustainable food and agricultural systems. They should invest in developing the capacities of smallholders alongside small and medium-sized enterprises (SME), as well as practices that are more effective and new technologies.

The food and agriculture industry is more investor-friendly than most people expect and it has been an investment destination for hundreds of years. However, investors and businesses often feel they need to choose between generating a profit or making the world a better place. Nevertheless, guidelines and techniques such as the FAB principles and agroforestry initiatives prove that profit and social responsibility are not mutually exclusive.

(Click here to read more about Agribusiness in Latin America)