UK - Pension funds investing in the food production and retail sector face a number of non-traditional financial risks, the UK Social Investment Forum warns.
Just Pensions – an UKSIF programme aimed at educating funds on socially responsible investment – launched a set of guidelines for the food sector.
The advisory note – From Crop to Shop – provides trustees with a list of questions to ask their fund managers in order to understand how these sector risks are being incorporated into investment strategies.
UKSIF claims consumer trends will see a move towards “healthy, convenient and indulgent” foods, with a shift towards lower fat, lower sugar and fresher foods in the long-term. Food producers with a narrow product portfolio may lose step with consumer preferences, the note warns.
Sustainable agriculture is also seen as a key driver in the industry, with trustees warned that producers and retailers need to support a more “holistic system” to ensure the sustainability of food resources in the long-term.
UKSIF warns inaction may expose the industry to risks of limited supplies and rising prices, as well as reputation damage if the consumer associates the producer or retailer with the degraded environment.
The food sector note was produced in collaboration with nine of UKSIF’s fund management members, including Henderson Global Investors, Jupiter Asset Management and the Universities Superannuation Scheme.
The series is planned to run for two years, with the next note – focusing on the tobacco sector – due for release in September.
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