Companies could unlock $2.3 trillion a year in the food and agriculture sectors with an annual investment of $320 billion in sustainable business models by 2030, a 7-fold return on investment, according to a report.

This could also lead to more than 80 million jobs, said the report, "Valuing the SDG Prize in Food & Agriculture," released by the Business and Sustainable Development Commission to mark World Food Day which falls on October 16.

The opportunities are broken down across 14 areas, including food waste, farming technology, low-income food markets, micro-irrigation, restoring land and forests, product reformulation, changing diets, aquaculture, reducing package waste, cattle intensification and urban agriculture.

Researchers estimate a range of value for each opportunity; the lowest in the range is $15 billion per year (for cattle intensification) while the highest goes up to $405 billion per year (for reducing food waste across the production process, or value chain), stated the report.

Of the 80 million jobs the report estimates could be created by 2030, 90 per cent could be in developing countries, including 21 million in Africa and more than 49 million in Asia.

The report further breaks down job creation potential in Asia to 22 million in India, 12 million in China, and the remaining 15 million in developing Asia. There could also be an additional 5 million new jobs in Latin America.

“As the world’s population is expected to increase by another one billion by 2030, the global food and agriculture system requires a new way of doing business, and new approaches to feed more than 800 million people who today suffer from chronic hunger as well as to meet future demand,” remarked Lord Mark Malloch-Brown, the chair of the Business and Sustainable Development Commission.

"This report makes clear both the social and economic incentives for companies to seize upon the SDGs as compelling growth opportunities. It is part of our larger argument for why the private sector must accelerate new business models that open truly sustainable and inclusive markets," he observed.

The authors caution that the annual investments, needed to open these market opportunities, must be scaled significantly, requiring an estimated $320 billion a year to unlock these opportunities by 2030.

They argue that the current capital base in 31 leading agriculture funds is just under $4 billion a year - less than 1.5 per cent the annual investment needed to capture these opportunities.

Partnering with government will also be critical to put in place enabling policies and the right regulatory frameworks as well as to advance research for facilitating product innovation.

The report looks at how food and agriculture businesses can experience growth by pursuing sustainable and inclusive business models aligned with the Sustainable Development Goals (SDGs), or Global Goals.

Launched in 2015, the SDGs are 17 time-bound targets for ending poverty and hunger, reducing inequality and tackling urgent challenges such as climate change, by 2030. The food and agriculture sectors directly relate to SDGs 2 (ending hunger), 3 (health & well-being), 8 (decent work and economic growth), 10 (reduced inequalities), 12 (responsible consumption and production), 13 (climate action), 14 (protect life below water) and 15 (protect life on land), but they are cross-cutting sectors that also affect the remaining Global Goals.

According to the research, the developing countries have the most to gain from SDG-aligned business opportunities, capturing more than two-thirds of the estimated economic value due to their large shares of arable land, high future consumption growth and large potential efficiency gains.

Across regions, the biggest business opportunity in developing Asia is in cutting food waste across the value chain; while in developed Asian countries like South Korea and Japan, the opportunity is greatest in consumer waste. In India, low-income food markets are the strongest opportunity for businesses, and in Latin America and Africa, it is forest ecosystem services.

Paul Polman, the chioef executive of Unilever and member of the Commission, urges more food and agriculture companies to integrate sustainability practices into their models.

"Unilever’s experience clearly demonstrates that business can create value by putting sustainability at its very heart and adopting inclusive growth models. We have helped hundreds of thousands of smallholder farmers improve agricultural practices enabling them to double or even triple their yields," he stated.

"All stakeholders can share in the benefits: Smallholder farmers improve their livelihoods; suppliers gain increased security of supply with improved quality; and we reduce volatility and uncertainty with a more secure and sustainable supply chain. The SDGs present a clear moral case for change, but companies must recognise that they represent the business opportunity of a lifetime too and must adapt to take advantage of it," he added.

According to the UN, of the 2.5 billion people in poor countries living directly from the food and agriculture sector, 1.5 billion people live in smallholder households.

“The best way to build an enduring business is to put sustainability at its heart. Value is then unlocked for all, from shareholder to supplier, and nature is not depleted.  Values and value creation do not have to, and actually should not be, traded in the long-term,” remarked Sunny Verghese, the co-founder and group chief executive of Olam, a global agribusiness with a portfolio of 47 agri-commodities, and a member of the Commission.

Dr Fraser Thompson, the director of AlphaBeta, which conducted the research for the Business Commission, pointed out that many commentators have incorrectly perceived the SDGs to represent an additional headwind to growth and profitability.

"The reality is that in many cases the SDGs offer a new and higher quality channel for economic growth and business profitability," he stated.

This study is the first attempt to provide a holistic assessment and quantification of the business opportunities related to the SDGs in food and agriculture, he added.

Valuing the SDG Prize in Food & Agriculture is part of a larger body of research that quantifies the value of business opportunities across four key systems, including cities, health and well-being, and energy and materials. The findings for these systems will be revealed in the Business Commission’s flagship report, to be launched in January 2017.-TradeArabia News Service