How can shareholders can have an influence on food waste?

HOW CAN SHAREHOLDERS CAN HAVE AN INFLUENCE ON FOOD WASTE?

In the last few years, we have become more aware of our impact on the planet, which has led us to try to aim for sustainability. Precisely, fighting food waste appears to be one of the best ways to curb climate change.

Nowadays, one third of the world’s food production ends up in our garbage each year, which represents about 1.3 billion tons per year. This also corresponds to 8 to 10% of global greenhouse gas emissions. Different types of costs are thus involved.

Firstly, the economic field is impacted. According to the ICCR website, around forty pourcents of the food produced in the United States is wasted. This percentage represents approximately 165 billion dollars’ worth that vanishes into thin air. Simultaneously, in Europe, the financial cost is estimated around 143 billion euros per year.

Secondly, food waste also involves social stakes. Based on the United Nations data, 25,000 people die of hunger every day, and the total number of undernourished people in 2020 rises to 768 million persons. On the other hand, some 170 million children are overweight worldwide.

Thirdly, when food goes to the landfill and rots. It releases dangerous greenhouse gases such as methane, that is more potent than carbon dioxide. Also, to produce these 40% of global food wasted, some fields were harvested, some water was used and maybe some pesticides may have been employed. For instance, “in the U.S, it accounts for 25% of water, 30% of fertilizer and 31% of cropland wastage”. Therefore some natural resources were unnecessarily consumed.

Therefore, according to the earlier arguments, we can deduce that food waste is an important issue that involves three different areas.

We can then wonder how investors can have a positive impact on this matter. Although Berle and Means' idea is that shareholders are completely removed from the company's activities, they have several levers to influence it.

First of all, they can divest or put pressure on management. Even if investors differ in their financial situations, in their expectations and their different horizons, they can coordinate their votes in shareholders’ meetings to create a countervailing power.

On the other hand, they can also use socially responsible investment to amplify their engagement. Indeed, shareholders can have different criterias to finally decide which enterprises they want to invest in. For instance, the area of activity, the risk and expected return, the stock exchange indices and they may choose the alternative of positive screening as criterias.

The Interfaith Center on Corporate Responsibility (ICCR), a coalition of over 300 global institutional investors, promotes this active ownership. ICCR includes a group of members that is concentrating on nutrition insecurity. They are in connection with manufacturers, casual restaurants chains among others, encouraging them to improve their business model in respect to investor expectations. These consist of : incrementing access to nutritious foods and drinks that are also financially accessible, having a responsible impact on consumers through marketing and labeling, and making sure that lobbying activities are on line with the company’s status otherwise said with the “ transparency

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