Sustainable consumption as business opportunity
Eat less meat! The BBQ fans out there don’t have to go cold turkey. The point is eating more vegetables, buying local, nutritious food whenever possible and minimizing waste by purchasing food with less packaging and in reasonable portion sizes can benefit your waistline and the environment. Conscious consumer choices and scarce natural resources incentivize agribusinesses in Latin America to produce more with less. From Brazilian cattle ranchers investing in pasture upgrades instead of deforesting to Nestlé reducing water usage in its Mexican value chain, the food industry has discovered healthy, sustainable consumption as a business opportunity.
The world population is expected to reach more than 9 billion by 2050 and we all need to eat. Our food choices have a wide ranging impact not only on our health, but also the environment. Different foods use different amounts of water, land, nutrients and fossil fuels to get them from farm to table. It turns out that the goodies best for us – all those greens and grains – are also the ones with the lowest impact on the environment. A tomato needs 13 liters of water to ripen; a potato needs 25, an apple 70. You think that’s a lot? Then consider the 2,400 liters that are needed to produce a hamburger. In general, the foods that raise cholesterol and hurt beach bodies also cause greater resource depletion and greenhouse gas emissions: the carbon footprint of an average meat lover’s diet is twice as much as a vegetarian’s.
The footprint of our diet is the combined impact that a steak or a liter of milk has on our environment. The smaller this footprint the better, especially since in Latin America and the Caribbean alone, 360 million people are moving out of the Base of the Pyramid and eating more meat and processed foods, like those in industrialized countries.
While all of us can individually have a positive impact by consciously choosing healthy and sustainable food products, the IDB as a development institution also has a role to play. Agribusiness, which is responsible for about two thirds of greenhouse gas emissions and large scale deforestation in Latin America, is one of the priority sectors for investments for IDB’s Structured and Corporate Finance department. We focus our investments on technologies that increase productivity and returns while minimizing land conversion, reducing emissions, maintaining resources and adapting to a changing climate.
Many of our projects target companies that produce the healthy food needed to feed the region and that do so through a sustainable business model that is both financially and environmentally sound. Even in subsectors such as dairy and meat that will always be emissions-intensive, a lot can be done to produce nutritious products while finding ways to reduce carbon and water footprints The challenge is to make operations more environmentally-friendly while keeping the business profitable. One example of a company that SCF supported is Estancias del Lago, a large dairy producer in Uruguay that installed a biogas plant that will capture methane from cattle manure. The generated thermal energy will be mainly used to source a new powdered milk plant. The milk you buy from them will be just as healthy as any other milk and better for the environment. This is the kind of “win-win” opportunity that can incentivize the private sector to invest in sustainability.