During the Future of Food @ SXSW, panelists discussed the future of sustainable investment practices in the food and agriculture industry.
ESG investing considers environmental, social, and governance (ESG) factors to evaluate financial returns and impact. Jillian Semaan, Vice President of Sustainability at Ketchum, explains that this approach to investing may consider what companies are doing to reduce their carbon footprint, how their decisions are affecting BIPOC communities, LGBTQ+ communities, and women, as well companies’ leadership structures.
“Sustainability means something different to everybody,” Semaan says. She believes this is okay, but says it’s important to keep track of the growing number of sustainability commitments that companies are making.”We as consumers need to hold brands accountable for their commitments.”
To do this effectively, transparency is key. According to Claire England, a Partner for Portfolia Food & AgTech Fund, this means founders must be honest with investors, employees, and customers about what they’re trying to achieve and how they will reach that goal. “It’s a really bad idea to go down that road of starting a company without intending to be completely open and transparent and forthcoming with all of your stakeholders,” England says.
England explains that in her experience, governance is also critical to ensure the company is moving in the right direction. She has seen startups without an official board of directors “and that is not a good way to govern,” England says. “You need to surround yourself with experts who can help you govern the company in an appropriate way and be successful.”
Commenting on the transformation taking place in the investment space, Elizabeth Sepulveda, an Entrepreneur in Residence with MATH Venture Partners, notes that the changes to the ‘S’ of ESG make her particularly optimistic. “What I’m most excited about in the whole ESG space is the ability for companies, both large and small, and people who are financing companies…to have a clear understanding of the social impact our portfolio companies are having on the world.”
Watch the full conversation here: