• 05 apr 2018
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  • Assetmanagement

Solving food challenges with pension capital

​Our investment in Corbion, a company known for innovative food solutions, is a typical impact investment: it provides financial returns while delivering solutions to strengthen food security, says Marek Troszczynski van Genderen.
Marek Troszczynski Van Genderen 480X480 Pggm

Marek Troszczynski van Genderen

Senior Investment Manager

It is often said that good news doesn’t sell. Indeed, on a regular basis we find ourselves overwhelmed with negative reporting about a wide range of topics. One such area is food and nutrition, where we are being reminded that our current production levels might not be sufficient to sustain expected population growth1.

Even worse, whatever it is that we do eat is not particularly healthy, with even the traditionally healthy staples such as fish turning out to be less nutritionally rich than they were only a couple of years ago2. It is not easy to stay optimistic when you see so much negative coverage every single day.

Here at PGGM we take heart to know that not all is gloomy and there are companies out there which work hard every day to prevent these problems from happening and try to come up with solutions. These companies are often able to turn these global challenges into profitable business opportunities and within the impact mandate PFZW has given us, PGGM can choose to support them with PFZW’s pension capital, generating market rate financial returns while making social impact at the same time.

Take an example of Corbion, an Amsterdam-based life science company and one of PGGM’s listed impact investments. Over the past years, Corbion has transformed itself from being one of the largest sugar producers in the Netherlands to being an innovative nutrition company with a strong R&D footprint that puts them at a forefront of many exciting developments.

One of them is addressing growing challenges in fish farming. Fish consumption has exploded in the last two decades, as more and more consumers started to discover that salmon, for example, is not only tasty but healthy too – full of necessary Omega 3 nutrients, as well as other vitamins and minerals.

20180405 Corbion 1

Unfortunately, while the salmon farms grew in size to catch up with global demand, Mother Nature still produces just as much krill (small herbivorous fish that serve as a basis for fish feed) as it always did. In other words, the growing number of salmon is chasing a constant number of krill. And because it is krill that produces Omega 3 in salmon, scientists have shown that the amount of Omega 3 fatty acids per kg of salmon has been decreasing quite rapidly in recent years. Bad news for those of us who want both taste and high quality nutrition. Worrying news also when you take the perspective of a fast growing world population and the role fish stock should play in feeding billions of people.

And this is where Corbion comes in. Rather than extract the Omega 3 from krill, Corbion has devised an innovative method that produces the Omega 3 directly from the algae using the fermentation process. In other words, rather than using krill (with the risk of depleting krill stock in the oceans) as an intermediate source for those healthy fatty acids, Corbion has gone directly to its ultimate source. Cutting out the middle fish, if you can forgive the pun!

20180405 Corbion 2

In fact, only one ton of product offered by Corbion can replace forty tonnes of krill, which can remain safely in the ocean, enhancing biodiversity and serving as feed for any remaining wild species. A win-win for all parties involvedCompanies like Corbion might not (yet) be household names but they play a very important role in the global food value chain and make it possible to sustainably harvest our nature’s resources.

Our relationship with Corbion is a good example of ‘impact investing’ – in one of the four impact themes PFZW has picked – food security – and directly related to #2 of the Sustainable Development Goals (Zero hunger) and #14 (Life below water). But the work doesn’t end with just purchasing their shares on the stock exchange. As a long-term investor, PGGM engages regularly with Corbion (as we do with other companies where we invest) in order to provide our view on key strategic decisions, as well to support further work into understanding their impact.

Knowing the difference that a company makes on the world around them is becoming ever more important to consumers and citizens alike. At PGGM, we recognize that the fact that we live in a complex world with multiple stakeholders and support all impact measuring efforts with much enthusiasm.

1. http://www.fao.org/news/story/en/item/471169/icode/
2. http://www.bbc.com/news/science-environment-37321656

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