April 18, 2017// Boston, MA – This week, Trillium Asset Management and The Natural Resources Defense Council (NRDC) released a new paper “Assessing Corporate Performance on Food Waste Reduction: A Strategic Guide for Investors.” The paper provides investors with key insights about assessing the risks and opportunities associated with food waste and why it should be an integral aspect of environmental, social, and governance analysis.
Below is a short piece co-authored by Allan Pearce at Trillium and JoAnne Berkenkamp at NRDC, which provides a brief introduction and overview of the paper.
Time for Investors to Lean in on Food Waste
Food-based businesses such as restaurants, grocery stores, and institutional foodservice providers are a critical link between the farm and our forks. However, these types of businesses also generate a great deal of food waste, estimated at four out of every ten pounds of food wasted. All that wasted food is valued at roughly $57 billion per year. Food companies pay to purchase, transport, handle, prepare, market, and dispose of food that goes unsold and the impact on their bottom line can be significant. Conversely, a recent study of corporate food waste reduction initiatives found that every dollar invested in those efforts yielded a net financial return averaging $14. Food businesses—and their shareholders—benefit when they cut waste.
The sheer magnitude of wasted food has driven this issue into the national spotlight, bringing heightened scrutiny to food-based businesses. In turn, investors that hold stock in these companies, such as pension funds, endowments, and asset management firms, have a direct interest in understanding how the generation, management, and disposal of wasted food effects the profitability and environmental performance of companies in their investment portfolios.
What’s more, large investors have a uniquely powerful role to play in calling for better corporate performance when it comes to wasted food. As major shareholders, these firms can gain the attention of company leadership. Through their investment screens and the use of strategies like shareholder resolutions they are well-positioned to catalyze change in the corporate sector.
In particular, we believe that Sustainable and Responsible Investors (SRI) should explicitly integrate corporate performance on food waste into their research processes, asking the tough questions and factoring them into decisions about what stocks to buy or sell. They should also call upon companies to demonstrate how they are managing the financial costs of wasted food and the supply chain, regulatory and reputational risks associated with it. In addition, investors should take a hard look at how food waste practices either enhance or exacerbate companies’ greenhouse gas and water footprints.
SRI investors share the goals and ideals of the food waste community and are increasingly recognizing the time has come to be more active in the national dialogue on food waste.
With that in mind, NRDC and Trillium Asset Management have developed a new briefing paper to provide investors with key insights on:
- The consequences of wasting food;
- The risks businesses face when wasting food including hits to the bottom line, supply chain risks, regulatory risks, and adverse effects on corporate reputation;
- Guidance for prioritizing corporate action on preventing food from going to waste, donating surplus foods and recycling remaining food scraps; and
- Best-in-class examples of corporate leadership.
By incorporating these considerations into their decision-making and dialogue with food-based businesses, investors can play a pivotal role in catalyzing corporate innovation and accountability.
Join Trillium and NRDC for a webinar on April 25, 2017 to discuss key insights from the report. The webinar will be hosted by the Interfaith Center on Corporate Responsibility. Click here to sign up.
Contact: Caroline White, Communications Manager, Trillium Asset Management, email@example.com