Invest in UN SDG Goal 2: Zero Hunger with ESG ETFs

Poverty, hunger and climate change are a few examples of some issues we’re facing today on a global scale. Rising consciousness towards these problems has enticed nations and organizations to enact initiatives that aim to improve quality of life around the world. Investors also have ways to create positive impact, and this can be done through various investing channels. In this article we highlight how you can contribute to UN SDG Goal 2: Zero Hunger with ESG Exchange-Traded Funds (ETFs).

17 SDGs for a better future

The Sustainable Development Goals (SDGs) are 17 targets set by the United Nations in 2015 as a global initiative to tackle issues that affect humans and the environment we live in, with the hope of achieving tremendous progress by 2030.

The 17 sustainable development goals (SDGs) to transform our world:

1. No Poverty
2. Zero Hunger
3. Good Health and Well-being
4. Quality Education
5. Gender Equality
6. Clean Water and Sanitation
7. Affordable and Clean Energy
8. Decent Work and Economic Growth
9. Industry, Innovation and Infrastructure
10. Reduced Inequality
11. Sustainable Cities and Communities
12. Responsible Consumption and Production
13. Climate Action
14. Life Below Water
15. Life on Land
16. Peace and Justice Strong Institutions
17. Partnerships to achieve the Goal

Each goal has several targets and is measured quantitatively by indicators provided by private and public entities. The creativity, knowhow, technology, and financial resources from all stakeholders are necessary to achieve the SDGs in every context. The beauty of these goals is their interrelation, meaning that action in one area will affect outcomes in others. The development of those goals must balance social, economic and environmental sustainability.

UN SDG GOAL #2: Zero Hunger

Current United Nations estimates show that nearly 690 million people are hungry, that's nearly 10% of the world’s population. The World Food Programme highlights that a quarter of these people suffer from acute hunger largely due to man-made conflicts, climate change and economic downturns. With the COVID-19 pandemic, these numbers were aggravated due to job losses and the overall disruption of economies, especially in least developed nations that lack their government support.

A profound change of the global food and agriculture system is needed if we are to feed the quarter of a billion people who are hungry today and the additional 2 billion people the world will have by 2050.

There are many reasons why hunger exist today, but are mostly related to:

• Poverty: Poverty means lack of resources to cover their basic needs such as food, water, and shelter.
• Conflict: Conflict often displace people from their homes and land, so food production declines or stops completely. Conflict also disrupts economies, leaving people vulnerable and at risk of malnutrition.
• Natural disasters: Natural disasters like floods can wipe out agricultural lands and disrupt businesses. Dwindling of food and income can lead to hunger and malnutrition
• Seasonal changes: Impoverished nations who have seasonal climate changes can be exposed to hunger due to lower crop yields, especially in rural areas where there's high dependence on farming and livestock for food and income
• Water scarcity and quality: Without access to safe water, crops can’t grow properly, and people can’t survive or stay healthy.
• Gender inequality: Gender inequality in societies leads to a higher malnutrition rate among women and girls.

Since its release in 2015, the United Nations' second Sustainable Development Goal is to “End hunger, achieve food security and improved nutrition, and promote sustainable agriculture”. Its eight associated targets aim by 2030 to:

1. End hunger and ensure safe and nutritious food access to all people, especially in impoverished nations
2. End all forms of malnutrition and focus on the nutritional needs of women, children and the elderly.
3. Double the agricultural productivity and income of small-scale food producers through access to land, financing and knowledge.
4. Ensure sustainable food production systems and increase productivity and production of strong and resilient agriculture.
5. Maintain the genetic diversity of seeds, cultivated plants, farmed and domesticated animals, and share access to genetic resources and knowledge.
6. Increase investments in rural infrastructure, agricultural research and technology, especially in poorer countries.
7. Improve trade and exports dynamics in world agricultural markets.
8. Improve data on food commodity markets and maintain adequate access to market information to avoid extreme food price volatility.

At current efforts, the world is not on track to achieve Zero Hunger by 2030 with estimates of 840 million hungry people by 2030. (un.org)

Governments, corporations and non-governmental organizations (NGOs) are working together to create a sustainable change of the global food and agriculture system, while taking swift actions to provide food and humanitarian relief to the most at-risk regions.

Investors join the war against hunger with ESG ETFs

The world of investing has always been about making money, but things are changing. Investors are becoming more socially and environmentally conscious, and their investment goals have split between expanding their wealth and making a positive impact on the world around them.

Today, impact investing has become the norm, with billions of dollars flooding the market in adequately screened investments, focusing on entities that align their operations with SDG and ESG initiatives (Environmental, Social, Governance). Corporate Social Responsibility departments (CSR) went from being a cost burden to an existential necessity that represent employees and consumers values.

The change in investors' mindsets has given birth to mutual funds and ETFs that provide exposure to securities that work towards achieving ESG or SDG goals. It allows them to invest in opportunities that can provide wealth accumulation while making an impact.

SDG ETF with the goal to Zero Hunger

Trackinsight analyses the fact sheets and other publicly available information of all ETFs in the ESG universe. The information is screened for statements that show an explicit tilt towards specific sustainable development goals.

In relation to "Zero Hunger" goal, Trackinsight identifies only one ETF: Rize Sustainable Future of Food UCITS ETF (RIZF)

RIZF is invested in 45 companies that are innovating across the food value chain to build a more sustainable and equitable food system. Around 70% of their investments are focused on sustainable packaging (28.8%), Ingredients, Flavours and Fragrances (23.7%) and Plant based and Organic Foods (18.7%). The United States has the highest share of geographic exposure with 52.4%, followed by Sweden (7.2%) and Switzerland (5.9%)

Top RIZF ETF holdings include:

1. O-I Glass (3.74%): Sustainable container glass products manufacturer.
2. FMC (3.72%): Agricultural sciences company that innovates in products (Chemicals, biologicals and technologies) that support sustainable agriculture and yield improvement.
3. Dole (3.6%): One of the largest producers of fruit and vegetables in the world with a focus on responsibly grown products and overall sustainability.
4. Oatly Group AB (3.57%): A food company that produces alternatives to dairy products from oat. Through its products and actions, the company strives to grow the plant-based movement and help people shift from traditional dairy to plant-based products and enact positive societal and industry change.
5. Beyond Meat (3.53%): Producer of plant-based meat substitutes, products that use significantly less water, land and energy.

Since inception on August 27, 2021, the fund has amassed $270 million in assets and delivered 18% gains for its investors.

RIZF trades on various European exchanges including Borsa Italiana, Deutsche Börse Xetra, Euronext Amsterdam, SIX Swiss Exchange and the London Stock Exchange. Rize accumulates the dividends and charges 0.45% in annual fees.

To fully understand the composition and risk/return profile of Rize Sustainable Future of Food UCITS ETF (RIZF), it is essential to perform thorough due diligence before engaging in any investment activities.

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