100 Million Farmers: the move to net-zero
Humans invented agriculture 7,000 years ago and the process has changed, developed and adapted with each new pair of hands to work in the field. It’s no different then, that farmers are now moving along with the rest of the world, towards net-zero farming.
The World Economic Forum has announced 100 Million Farmers, a platform moving towards “Net-zero and nature-positive food systems by 2030,” which encourages “local solutions” as well as empowering farmers.
Net-zero farming will be a huge but necessary challenge, including familiar activities such as planting trees and utilising renewable energy, as well as investing in technologies which bypass pollution and improving soil health.
Farming also blocks up land which could be used to plant trees, fruit or vegetables, as land for animals to graze in. The process of deforestation, where trees are chopped down or burned away, is often to vacate land for cattle. Cows in particular produce the green-house gas methane, which adds to the greenhouse effect produced in farming.
Food giants take on call to go net-zero
Across Earth Day at the end of April, food giants made grand promises. Over the next few decades, each business will have to put their money where their mouth is.
Nestle, the biggest food company in the world with a revenue of $63bn, has already started the move to net-zero. Employing 600,000 farmers across the world for their ingredients, Nestle said: “We are targeting our efforts, focusing on cutting methane emissions, helping farmers access innovative technologies and encouraging the implementation of more efficient soil, herd and land management techniques.”
Another of the food giants, Unilever, plans to reach net-zero emissions throughout its whole supply chain by 2039. CEO Alan Jope said: “[We will] be transparent about our plans, and strengthen engagement and dialogue with our investors."
Global food security
In addition to the net-zero agriculture transformation, global food security is a rising issue. According to World Vision, 690 million people, 8.9% of the world’s population, are starving. The international level of food insecurity has been growing since 2014, according to The World Health Organisation and food prices have also risen during the pandemic.
Yet in Developed Nations, obesity related deaths are growing. In the UK, one third of children are obese by the age of nine. Yet obesity can be related to the socio-economic background of the individual. In the USA, research by Centres for Disease Control and Prevention found: “Obesity prevalence was 18.9% among children and adolescents in the lowest income group”. Children from poorer families are more likely to be obese due to junk food being less expensive and taking less household energy to cook, than healthier alternatives.
By 2050, the world’s population is expected to hit ten billion people, but the current world’s food system is failing millions of people. It needs to change in order to support the expected population boom and the journey to net-zero could be an opportunity for this to take shape.
FedEx issues sustainability bonds and a carbon neutral goal
FedEx Corp, founded in 1971 and made famous from the 2000 film Cast Away, provides transportation, e-commerce and business services. Headquartered in Tennessee, USA and with an annual revenue of $79 billion the company is making the move to net-zero.
"We have a responsibility to take bold action in addressing climate challenges," said Frederick W. Smith, Chairman and CEO of FedEx Corp.
The company has announced offerings of $1.75 billion of USD-denominated notes and €1.25 billion of euro-denominated notes. The proceeds of the debt offerings will be used with existing cash to redeem $5.8 billion of the company’s existing debt. This will eliminate near-term debt obligations taken on during the early stages of the COVID-19 pandemic.
The sustainability bonds
The transaction includes:
- Substantial Overall Debt Reduction. To be completed later this month, the debt offerings and subsequent redemptions, total the biggest series of related debt transactions in company history. The net reduction will hit $2.6 billion in FedEx debt obligations. By erasing these obligations, it will reduce the company’s total debt portfolio by 11% as well as strengthen its balance sheet.
- Elimination of Near-Term Debt Maturities. FedEx will end all debt maturities through fiscal year 2025 and one tranche in fiscal year 2027, to provide liquidity and flexibility in the coming years, as FedEx maintains its position in the challenging macroeconomic environment.
2040 carbon neutrality
Furthermore, the offerings include an eight-year, €600M sustainability bond tranche in Europe. FedEx will use this to finance its efforts to achieve its target of carbon neutral operations by 2040.
Across their worldwide operations, FedEx will reduce or eliminate their carbon impact, upgrade their transportation fleet to electric and engage with cutting edge technologies across the board.