Even if renewables or electric cars are already revolutionizing the energy and transport sectors, climate change risks will continue to be more important in the future. More and more consumers, businesses and policymakers are focusing on sustainable food and agriculture. Their main goal is to counteract deforestation and also mitigate other climate change-related factors. Even though the agricultural industry is an attractive sector for investors, they are increasingly becoming aware of the impact of deforestation and consider certain climate-related risks and opportunities in their investment decisions.
As stated in the previous published IPCC special report on August 2019, 70% of deforestation is linked to agricultural production and the clearance of the forest’s accounts for 15% of global greenhouse gas emissions as well as contributes to biodiversity loss.
Therefore, natural climate solutions could change the value proposition of landowners and investors. As the forest gains in value, it is more unlikely that it will be cleared for agricultural use, making it unattractive to investors. Also, consumers are becoming increasingly aware of the products that are the result of deforestation and companies are becoming more alert when it comes to avoiding products in their supply chains associated with deforestation.
With sustainabill companies can trace their commodities to the farm and use satellite analytics to identify deforestation. Using historical satellite data companies have proof to which extend deforestation took place in their product impact zone.