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Investing in sustainable food stocks

by Research

01-04-2010 | Triodos Sustainability Research recently analyzed 20 listed supermarket chains in order to select responsibly operating companies eligible for investment by the Triodos values funds and Triodos Private Banking. There are few large listed companies that focus on sustainable food, but opportunities for investing in the sustainable food theme do exist on the world’s stock markets. Whether supermarkets offer organic and fair trade food is an important issue  for Triodos Sustainability Research, when analyzing companies in this sector.

The range of sustainable products offered is considered on different levels when selecting companies in the food retail sector, beginning with the mutual comparison of companies that is made in order to identify the top performers in terms of sustainability. In addition we determine whether companies stock fair trade and organic products and how many different products this involves.

One of the companies that has been selected is Colruyt from Belgium. Apart from the standard supermarket chains Colruyt and Okay, the company also operates the so-called Bio Planet shops. These shops are fullyfledged organic supermarkets that offer a range of 3500 organic products. The standard Colruyt supermarkets also sell organic products. Colruyt is one of the largest suppliers of organic products in Belgium.

The top performing companies in the sector are screened against Triodos Bank’s minimum standards. During this screening process organic products are also taken into account, for instance when considering the animal products that are offered. The supermarkets that we analyzed mainly sell meat products produced by regular farming. However, according to our standards, they must also offer products that have been produced with more attention for animal welfare. These should preferably be organic products. This allows consumers to make a conscious choice. Furthermore, when sold in standard supermarkets organic products are brought to the attention of a much broader group of consumers.

In the UK we added WM Morrison Supermarkets to the investment universe. Like Ahold in the Netherlands, this company has joined the Roundtable on sustainable palm oil (RSPO). The RSPO is a platform for producers, consumers and other stakeholders and promotes the production of sustainable palm oil. One of its objectives is to prevent deforestation in order to establish new plantations. WM Morrison also sells fish certified by the Marine stewardship Council, which promotes sustainable fishing.

Three companies that were already included in the sustainable investment universe still proved eligible for sustainable investment: UK supermarket chain J. Sainsbury, Royal Ahold from the Netherlands and Woolworths from Australia.