July 12, 2022

By Lynda Kiernan-Stone, Global AgInvesting Media

Transformation is typically not easy. If done responsibly, it can be demanding in both time and capital. But once accomplished, it can also be highly rewarding on a number of fronts – return on investment, socially, ecologically, and environmentally, for example. 

Lombard Odier Investment Managers (LOIM), the asset management business of Switzerland-based Lombard Odier, noted that 1 billion hectares of land must be returned to nature by 2030 in order to address and mitigate the encroachments on the Earth’s stability being inflicted by the agriculture, forestry, and other land uses (AFOLU) system.

Overall, the AFOLU system accounts for 24 percent of greenhouse gas emissions, 90 percent of forest degradation, and 25 percent of our biodiversity loss, making it a primary driver of planetary boundary transgressions. In response, agricultural land, which accounts for 50 percent of all habitable land on Earth, must be reduced by 20 percent – a goal committed to by 115 countries pledged to climate and biodiversity initiatives designed to be the foundation of a sweeping shift in our global food systems. 

“Returning 20 percent of land to nature and improving the quality of the earth’s remaining agricultural land will be a critical part of realigning our economy with the earth systems that support it,” said  Jean-Pascal Porcherot, co-head of LOIM and managing partner at Lombard Odier, adding, “This will leapfrog the sustainability-driven transformation of our food systems and unlock a market worth at least $1.5 trillion in annual revenues by 2030.”

In November 2020, the Swiss wealth and asset manager referred to sustainability as the “next economic revolution” and “perhaps the single biggest investment opportunity in history” when it launched its Natural Capital strategy. 

“The investment industry, which represents $120 trillion of capital, will always seek returns as a primary objective,” said Hubert Keller, managing partner, Lombard Odier Group and CEO, Lombard Odier Investment Managers, last November. “We believe that today some of the most convincing returns opportunities lie in the transition to a more sustainable economic model, putting climate transition and nature center stage.”

Natural Capital, along with Climate Transition, and the TargetNetZero range, form the basis of Lombard Odier’s suite of CLIC® thematic strategies – now being expanded with the addition of a New Food Systems strategy, forged to support and capitalize on opportunities tied to the transition to more sustainable food systems. 

This new platform will be managed by Conor Walsh, who joined LOIM in May 2022, bringing more than 15 years of experience in global equity investment. Based in London, Walsh will work with co-PM Alina Donets and the LOIM Sustainability and Investment Research teams to assess companies that focus on agriculture, forestry, and other land uses (AFOLU). The strategy will hold between 35-50 companies aligned with any of three sub-themes:

Sustainable food production: producers of biological and synthetic inputs, and agricultural products such as sustainable aquaculture, green fertilizers, or new food ingredients. 

Sustainable food consumption: consumer-facing companies such as retailers, manufacturers, or restaurants with a business model focused on the diets of tomorrow. 

Enabling solutions: companies along the entire value chain that offer enabling products or services such as precision agriculture solutions, electric farming equipment, new packaging ideations, and logistical advancements. 

LOIM also will be providing investors with an in-depth sustainability report that will outline the positive impacts of the fund benefitting society and the planet, along with a stewardship report detailing progress across the portfolio.

“At Lombard Odier, sustainability is fundamentally an investment conviction,” said Porcherot. “Our New Food Systems strategy seeks to capture these market opportunities, targeting companies with attractive business models and robust valuations with the objective to generate compelling sustainability-linked alpha returns for investors.”

~ Lynda Kiernan-Stone is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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