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20 The Responsible Investor’s Guide to Commodities■■Participate in collaborative engagementinitiatives with other investors.7.3 Areas for further research andcollaborationThe breadth and quality of relevant investmentresearch, especially when it comes tosocial and human rights issues, needs to beexpanded. It is also necessary to focus moreon external suppliers and contractors, whosepoor track-record on ESG issues can be asource of considerable reputation risk forinvestors.Effective collaborative engagement, includingengagement with smaller companies andwith companies in developing and emergingcountries, is another area for furtherresearch and collaboration among investors.In certain countries it might be necessary forinvestors to engage directly with governmentsand regulators in view of improving local ESGstandards and oversight.
218SPECIAL FOCUS:INVESTMENTSIN AGRICULTUREAND FARMLANDAgriculture is a critical challenge area for the coming decades and the topichas recently risen to the top of the global agenda. In the course of our researchon commodities, it became clear that 1) Agricultural commodities area particularly sensitive area in terms of the environmental and social issuesinvolved, and 2) ESG aspects are also expected to be highly financially materialfor this type of commodity. This section will therefore highlight the uniqueposition of agriculture and—to the extent to which investors must make specialconsiderations for this commodity type—provide guidance on derivativesinvestments, farmland, and company debt and equity.Insights and recommendations in this section are the result of a specialresearch focus of our project and of the discussions with a range of investorsand stakeholders at the “Agri-investing for the long term” conference held on17 June 2011 in Geneva. The proceedings of the conference are summarised inAppendix 3.8.1 Agriculture: a global challengeAccording to the UN, the world will need to produce 70% more food by 2050to satisfy global demand. Growing populations with an increasing appetite forprotein-rich foods, coupled with new uses for food materials such as biofuels,all serve to push up global food demand. At the same time, however, foodsupply is constrained by a legacy of underinvestment, limits to arable land andgrowing water scarcity.Moreover, addressing the world’s food problems means more than increasingthe sheer amount of food produced on farms. That food must reach endconsumers, be financially accessible and be nutritionally sufficient 14 . Currently,roughly one-third of the world is chronically underfed or undernourished.The structural defects in the world food system stem from decades of neglectand underinvestment. From 1980 to 2000, the share of official developmentassistance dedicated to food and agriculture fell from 18% to 3%. Given14. United Nations High Level Task Force on the Global Food Security Crisis, “Updated Comprehensive Framework forAction”, 2010.SUPPLY CONSTRAINTS AND INCREASING DEMAND■ Underinvestmentin agribusiness fordecades■ Urbanisation andgrowing deserts eatfarmland■ Water scarcity andrising energy costs■ We have seen “peakarable land”PRESSURE ONSUPPLYEVER-RISINGDEMAND■ Growing populationdirectly causes a risingdemand for food■ Changing diets(more protein rich)in emerging marketsleads to more demand■ Biofuels are an additionaldemand driverSource: DWS, Credit Suisse, onValues
Page 1 and 2: THE RESPONSIBLEINVESTOR’SGUIDE TO
Page 3 and 4: ForewordGlobal competition over sca
Page 5 and 6: 5Appendix 1. Overview of key enviro
Page 7 and 8: 7HEADLINES OF MAIN RECOMMENDED BEST
Page 9 and 10: 9FINANCIAL INVESTMENTS IN COMMODITI
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Page 13 and 14: 13Based on our discussions and inte
Page 15 and 16: 155INVESTMENTSIN PHYSICALCOMMODITIE
Page 17 and 18: 176INVESTMENTSIN REAL ASSETS6.1 The
Page 19: 197DEBTOR EQUITYINVESTMENTSIN COMPA
Page 23 and 24: 23“One of the main things in food
Page 25 and 26: 25“There is no inherent ethical d
Page 27 and 28: 27APPENDIX 1.OVERVIEW OF KEY ENVIRO
Page 29 and 30: 29appears to have been to throw the
Page 31 and 32: 31GOALS OF THE CONFERENCE:• To hi
Page 33 and 34: 33SET THE DIRECTION• Establish an
Page 35 and 36: 35• The opening plenary previewed
Page 37 and 38: 37encing prices levels and volatili
Page 39 and 40: 39PRICE IMPACT: DEFINITION OF RESPO
Page 41 and 42: 41“You really do have to wonder w
Page 43 and 44: 43PARTICIPANT LISTParticipant Name
Page 45 and 46: 45APPENDIX 4.THE PRINCIPLES FOR RES
Page 47 and 48: 47Annexes to the Principles for Res
Page 49 and 50: 49APPENDIX 5.PROJECT TIMELINE2010Ba
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