Felix Odey, Portfolio Manager, Schroders
Over the next 30 years, food and water supplies not only need to become more sustainably sourced, but they also must reach unprecedented levels of scale.
Felix Odey, Portfolio Manager, Schroders, argues there is an opportunity for investors to harness the long-term structural and cyclical growth expected as systems change across the value chain to meet sustainability goals.
From an investment perspective, there are two key opportunities to get excited about. The first is long-term structural growth. This system change includes the entire value chain. Whether it is looking at greenhouse gas emissions or the water intensity, the whole system is currently complicit in the unsustainable production process.
The second part of this investment opportunity is the cyclical one. When we look at catalysts in the market today, including the fears of inflation and the geopolitical events impacting Ukraine, they have a profound impact on the agricultural system. We have already seen food prices skyrocket with the input costs into boosting yield such as fertiliser and gas rising. Suddenly we see companies being much more incentivised to allocate that capital today.
