Insight
The Importance of ESG Due Diligence in Agri-Investing
Anthropogenic climate change is one of the most pressing issues facing mankind today. Irreversible consequences of planetary warming are fast approaching, impacting the most disaffected parts of the globe the most.
People are also becoming more concerned about social injustices, and it is for these reasons that ESG factors are becoming increasingly prominent in today’s investment landscape. This is especially applicable to agri-investing, as many environmental and social factors are intrinsically linked to agricultural activities.
Not only are there financial penalties and reputational damage for failing to consider ESG risks but incorporating ESG into investments has also been shown to improve performance.
ESG Due Diligence
ESG due diligence involves the assessment of risks and opportunities relating to the environmental, social and governance implications of an investment. Before undertaking an investment in agribusiness, there are a range of factors to investigate.
Environmental issues to consider include:
- Pollution and resource use
- Biodiversity and ecosystem services
- Climate change
Social issues to consider include:
- Community health and safety, particularly in underprivileged areas
- Labour practices and working conditions
- Land rights and tenure
Governance issues to consider include:
- Executive pay
- Track record of management
- Shareholder’s rights
Malachy Mitchell is co-founder and Managing Director of Farrelly & Mitchell. He works with CEOs, executives and leaders from private enterprises and public sector institutions helping to grow their food sector companies and agribusinesses.
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The Importance of ESG Due Diligence in Agri-Investing
Anthropogenic climate change is one of the most pressing issues facing mankind today. Irreversible consequences of planetary warming are fast approaching, impacting the most disaffected parts of the globe the most.
People are also becoming more concerned about social injustices, and it is for these reasons that ESG factors are becoming increasingly prominent in today’s investment landscape. This is especially applicable to agri-investing, as many environmental and social factors are intrinsically linked to agricultural activities.
Not only are there financial penalties and reputational damage for failing to consider ESG risks but incorporating ESG into investments has also been shown to improve performance.
ESG Due Diligence
ESG due diligence involves the assessment of risks and opportunities relating to the environmental, social and governance implications of an investment. Before undertaking an investment in agribusiness, there are a range of factors to investigate.
Environmental issues to consider include:
- Pollution and resource use
- Biodiversity and ecosystem services
- Climate change
Social issues to consider include:
- Community health and safety, particularly in underprivileged areas
- Labour practices and working conditions
- Land rights and tenure
Governance issues to consider include:
- Executive pay
- Track record of management
- Shareholder’s rights
Malachy Mitchell is co-founder and Managing Director of Farrelly & Mitchell. He works with CEOs, executives and leaders from private enterprises and public sector institutions helping to grow their food sector companies and agribusinesses.
Subcribe today
Stay up to date with the latest agribusiness blog, Insights, and more sent straight to your inbox.
Malachy Mitchell's featured publications
Government & multilaterals
TAG food management targets profitable growth in local food & beverage
Insect protein, how can companies overcome the ‘yuck’ factor?
Insect protein, how can companies overcome the ‘yuck’ factor?
Food & beverage
The rise of agriculture as an institutional asset class
Food safety & security
BBC report draws on Farrelly & Mitchell analysis of COVID-19 impact in Arab nations
Food safety & security
Supply chains & food security: assessing the impact of disruptive forces
Food safety & security
Farrelly & Mitchell analysis: Lebanon explosion exposes lack of food security plan
Is Covid-19 accelerating ESG investment in food and agribusiness?
Is Covid-19 accelerating ESG investment in food and agribusiness?
Government & multilaterals
TAG food management targets profitable growth in local food & beverage
Insect protein, how can companies overcome the ‘yuck’ factor?
Insect protein, how can companies overcome the ‘yuck’ factor?
Food & beverage
The rise of agriculture as an institutional asset class
Food safety & security
BBC report draws on Farrelly & Mitchell analysis of COVID-19 impact in Arab nations
Food safety & security
Supply chains & food security: assessing the impact of disruptive forces
Food safety & security
Farrelly & Mitchell analysis: Lebanon explosion exposes lack of food security plan
Is Covid-19 accelerating ESG investment in food and agribusiness?
Is Covid-19 accelerating ESG investment in food and agribusiness?
Government & multilaterals