A new report by Morgan Stanley’s Institute for Sustainable Investing, with The Economist Intelligence Unit, includes insights into the agricultural sector’s ties to greenhouse gas emissions, and examines the technologies that governments, cities and companies are embracing to mitigate the impact.
To combat agriculture’s hefty contribution to greenhouse gas emissions, Argentinian scientists are developing methane-capturing backpacks for cows1. Closer to home, agriculture accounts for more than a third of total greenhouse gas emissions in Australia2 - a problem we hope to tackle through smart investments in innovative AgTech start-ups.
The impact of agriculture on Australian greenhouse gas emissions is a side effect of our strong reliance on the sector’s exports. Comparatively, agriculture accounts for just 13% of global greenhouse emissions3. In countries such as Bangladesh, where agriculture plays a dominant economic role, the sector accounts for more than half of total emissions.
The climate is changing. The world needs innovative solutions to mitigate climate change and stem its worst impacts. One way to accomplish that is to attract more private capital into technology investments that help mitigate climate change across all sectors.
A solution to mitigating the Australian contribution could, however, be on the horizon, with more being done domestically to improve the investment landscape for AgTech start-ups. One example is SproutX, an AgTech start-up accelerator backed by the National Farmers’ Federation4 and a wide range of corporate partners.
The advent of SproutX – and others like it – signifies a shift in how investors and entrepreneurs are viewing innovations within Australia’s $60billion agriculture industry. After years of neglect, the sector is beginning to capture imaginations, with a palpable sense of emerging opportunity– particularly around the introduction of new technologies.
The trend is not limited to Australia, with AgTech investments across the globe reaching $4.6 billion in 2015, 95% higher than in 2014.5
AgTech investments across the globe reached $4.6 billion in 2015, 95% higher than in 2014.
While AgTech used to focus mostly on biofuels, seed genetics and water desalination, it now includes development of new technologies to reduce methane emissions from livestock - notably cattle. Argentina’s cow backpacks, for example, are able to capture enough methane from one cow in a single day to power a refrigerator for 24 hours.
If you would like to learn more about investing in sustainable technologies speak to your Morgan Stanley financial adviser.