For those of us entrenched in the business of organic, the macro trends could not be more on our side; most notably, an industry that grew 12% last year to $62 billion and a health-conscious population that understands the risks of pesticide-laden, genetically-engineered foods.
In order for organic brands to grow, these companies need access to capital, and one increasingly important investor for later-stage organic brands are ESG funds.
Not surprisingly, ESG funds share a common mission with organic companies, as they take into account Environmental (energy conservation, natural resources, land use), Social (labor standards, community impact, production quality) and Governance (ethical business practices, board diversity, executive pay vs. employee pay) factors. ESG investing is not just for large institutions that have access to private equity firms, but almost any individual will soon be able to invest in this sector with a 401K via an open-end or exchange-traded ESG fund.
Without question, ESG funds play an incredibly valuable role in providing capital to organic companies, but money is no longer enough. Over the years, our industry has been unable to adequately protect organic standards or to enact policy that would benefit our country and our planet.
And this is where ESG investors could play a vital role on behalf of organic — because individuals who control vast sums of money command attention.
Case in point was when BlackRock’s Larry Fink, CEO of the world’s largest money manager, said in January that his firm is “asking companies to disclose how their business model will be compatible with a net-zero greenhouse gas economy” and investors are starting to “tilt their holdings toward companies focused on sustainability,” all of Wall Street and the business community took immediate notice.
More specifically, we need ESG investors to help transition a greater amount of farmland in the U.S. to organic. This would create new jobs and bolster local economies, both of which Republicans and Democrats could get behind.
Right now, less than 1% of the farmland in the U.S. is organic, yet the organic industry is comprised of roughly 6% of the overall food sector. As such, the industry is forced to import a majority of its raw products. Unfortunately, we have experienced massive cases of fraud with imported organic grains from the Black Sea region, and the environmental cost of importing these products cannot be ignored.
Sending enormous shipping containers of organic corn and soy from Turkey is much more damaging to our planet than it would be to grow these crops within our own borders. While some organic goods may need to be imported, such as cacao, bananas and pineapples — and there is nothing wrong with supporting small organic farmers in other countries — it is inexcusable that we cannot produce sufficient quantities of organic grains on U.S. soil to satisfy our domestic needs. Instead, we are forced to rely on foreign countries, several of whom have historically delivered us fraudulent goods.
MORE IMPACTFUL RETURNS
The data surrounding ESG is compelling.
S&P Global Sustainable1, a sustainability intelligence research organization, found that 16 out of 27 ESG exchange-traded funds and mutual funds with more than $250 million in assets outperformed the S&P 500. In the time period of Dec. 31, 2020, to May 17, 2021, those 16 funds rose between 11% and 29.3%, whereas the S&P 500 increased 10.8%.
When measured over longer time horizons, a report from professors at New York University’s Stern Center for Sustainable Business and researchers at Rockefeller Asset Management found a positive relationship between ESG and corporate financial performance 58% of the time.
According to Morningstar, the net flow of sustainable funds in the U.S. in 2020 reached $51 billion, more than double the total for 2019 and nearly 10 times more than in 2018. Additionally, BlackRock reported that from January through November 2020, investors in mutual funds and ETFs invested $288 billion globally in sustainable assets, a 96% increase over the whole of 2019.
“The amount of ESG money is accelerating greatly, and many people do not realize how large it has become,” said Nick McCoy, Managing Director at Whipstitch Capital. “The influence of ESG investors will only continue to grow, and getting them involved in helping to transition more farmland to regenerative organic is not only critical for the long-term financial well-being of the U.S. but for that of the planet’s health as well.”
Max Goldberg, Founder
Huge congrats to CEO Bob DeBorde -- who has taken the brand to unprecedented heights -- and to founders Jeff Church, James Brennan and Eric Ethans on the sale of the company to Paine Schwartz Partners. What Suja Organic accomplished is incredibly impressive. Not only did it play a leading role in taking cold-pressed organic juice to the masses, but it thrived in an extremely competitive category. An amazing run so far and much more to come.
Farmers and advocacy groups are hoping the Biden administration will take action on the 2018 National Organic Standards Board recommendation to close this loophole.
Rumors of Thrive Market's long-awaited IPO seem to be coming closer to fruition.
A new white paper from the consumer advocacy group OrganicEye profiles the lobbyist-affiliated appointees to the National Organic Standards Board.
The chain of upscale, delivery-focused corner stores and cafés, which currently operates 12 stores, will soon be coming to New York City, Austin, Boston, Miami, Los Angeles and Houston.
The organic direct-to-consumer baby & toddler food brand has raised $44m in a Series B round led by Valor Equity Partners, with participation from long-standing partner Kairos HQ.
Harmful PFAS chemicals are linked to cancer, birth defects, liver disease, plummeting sperm counts and a range of other serious health problems.
As climate-smart farming initiatives scale up, experts decry ‘junk agroecology’ -- global initiatives they say are cherry-picking sustainable practices, while denying political realities.
The Minnesota-based supply chain solutions company focused on organic, non-GMO and regenerative food and feed has filed for Chapter 11, which is causing a headache for growers of organic grain.
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* Two million acres of rangeland in the West are being sprayed with highly toxic insecticides targeting grasshoppers.
* A short film from Patagonia, Remothering the Land, discusses how regenerative practices and knowledge come from Indigenous and Black farmers, and support healthy soil, animals and people.
* PCC Community Markets has banned the sale of plastic water bottles below 1 gallon.
* Best of luck to Dan Stangler, former executive at General Mills, who takes over as CEO of Brew Dr.
* Organic meal delivery service Sakara was spotted in a recent episode of Gossip Girl.
* College football legend and Heisman winner Tim Tebow has joined Clean Juice as a brand ambassador and will appear in a national TV spot for the company.
* Lotus Foods announced that it will be publishing a cookbook in 2022 celebrating rice and telling stories about people around the world who grow it.
* Partake Foods has opened registration for Black Futures in Food & Beverage fellowship program.
* The Institute for Responsible Technology and Protect Nature Now have released the white paper Genetically Modified Microbes.
* The New York Times just wrote a dangerous piece titled “Learning to Love GMOs.” Clearly, the author did not see the articles that her publication wrote several years ago about the millions of acres of superweeds caused by GMOs or the doubts about the promised bounty of GMOs. Feel free to contact The New York Times and let them know how you feel about this story.