Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16INVESTING IN FOOD One of the fastest-growing investment asset classes is agriculture.11 Why? To meet the demands of the growing human population, we will have to produce as much food in the next 50 years as humans have produced in the last 10,000 years. This inexo- rable and predictable growth in global food demand provides investors with portfolio performance stability in an otherwise volatile market. Agriculture also is the single greatest human activity that has modified the natural world. There are a lot of us, and we do have to eat. Nearly half the earth’s terrestrial surface that is not rock or ice has been converted to growing food for just one species—us. Agriculture also accounts for about 20% of all greenhouse gas emissions. To meet the 2ºC goal of the Paris Climate Accord, we will need to reduce greenhouse gas emis- sions by about 80% by 2050. What will be the additional impact on the earth of doubling food production by 2050? Can we double food production with less impact than today? A lot less. The challenge requires changes in the way food is produced, stored, processed, distributed, and accessed. In essence, the food system will need to be transformed. A SUSTAINABILITY SYSTEM FOR AGRICULTURE INVESTORS This is why Manomet was excited when one of the larg- est institutional agriculture investors in the U.S., Hancock Agriculture Investment Group (HAIG) a division of the Hancock Natural Resource Group (HNRG)12 , approached us in 2015 to develop credible, science-based sustainability metrics for their growing portfolio of farms. Brian Kernohan, HNRG’s Director of Policy & Environmental Advocacy, shared, “Our investors are asking about sustainability. Investors are increasingly more sophis- ticated today about their impact on the world.” HNRG, through its timber division, Hancock Timber Resource Group (HTRG) helped the forestry sector develop the Sustainable Forestry Initiative® (SFI)13 standard in the 1990s. Today, over 280 million acres (110 million hectares) in North America are certified to the SFI forest management standard, so Kernohan already understood the value of having a sustainability frame- work for managed land. HAIG wanted a similar system for agriculture, but a workable one hadn’t been developed yet. Large institutional investment in agriculture might seem counterproductive to the burgeoning local food movement, but both small local farms and corporate farms have ground to gain on sustainability. Farmer’s markets and CSAs (community- supported agriculture) provide huge value to their communi- ties, but they cannot provide all the food it will take to feed the world. Institutional investors are in a position to make big improve- ments in agricultural sustainability. HAIG’s financial strategy is to turn underperforming farms into productive farms. HNRG learned from its forestlands that having a set of standards in place actually makes the com- pany more profitable through efficiencies and standardization of procedures. Institutional investors have the capital to make farm-level upgrades that small, individual farmers often do not have. Efficient farms use less water and emit fewer greenhouse gases. They also have the capital to invest in their employees, cre- ating skilled job opportunities in areas where the job market is scarce, and to create jobs where they have been lost. If done right, all this can be positive for social and environmental inter- ests. If not, then problems can emerge—which is why having a sustainability system is so important. It provides the “user’s manual” for avoiding such problems. Manomet’s challenge was to develop a sustainability frame- Permanent Crops Almonds Apples Cherries Cranberries Pistachios Walnuts Wine Grapes Annual Crops Alfafa Corn Cotton Peanuts Potatoes Rice Soybeans Vegetables Wheat HAIG’S FARMLAND HOLDINGS IN THE UNITED STATES Manomet Partnerships for Sustainability • Spring / Summer 2016 | 9