Environmental Social Governance (ESG)

The little animals Gen Z investors care about

By AMP Capital Youth Advisory Committee

As the investment world becomes better at understanding what it means to invest ethically, we learn more about the parts of the world that are affected by investment decisions – right down to little creatures.

The AMP Capital Youth Advisory committee – made up of current and aspiring investment managers – makes it a priority to understand the parts of the natural and social world that investing does, and can, make an impact. We pass that information on to the AMP Capital Ethical Leaders Ethics Committee and the fund managers we work with.

We were recently enlightened by the work of the Royal Melbourne Institute of Technology’s Committee representative, Hugh Bruinier. His research, represented below, on the effect of insecticides on pollinator populations provided a riveting and thought-provoking take on the topic of animal welfare. This brought us to further understand the humble honeybee, and why it should be on the radar of ethical investors.

Though this issue is Australian focused, there is a worldwide lesson in just how deep and detailed the supply chain is to consider. Further, you can see the impact of a creature even as small as a honeybee on food, clothes, and agricultural land.

Here are some key components from Hugh’s research:

Why are honeybees important?

Honeybees and other pollinators are not commonly regarded under ‘Animal Rights’, but the species play a large role in Australia’s horticultural and agricultural sectors and have hence been affected by the scale and structure of agriculture in Australia.

Whilst honeybees are well known for their production of honey - which the domestic apiary industry produces a Gross Value of Production (GVP) of $90 million a year1 the foraging for nectar in this process pollinates plants, resulting in increased seed or fruit sets, improved storage qualities and shape of some fruits, and evenly matured crops2. Thereby the GVP of the honeybee is largely understated when factoring in the impact the industry has on the agricultural and horticultural sectors.

The contribution to crop production by pollination services is quoted as a figure of $4–6 billion per annum, according to source one below2. The chart below shows the value of production of pollination dependent crops in Australia. From this we can observe Australian agriculture’s dependence on pollinators as well as the exposure the industry has to the threatening of Native Australian and European honeybees.  

Source: Department of Agriculture, Water and Environment
Source: Department of Agriculture, Water and Environment

What are the threats to honeybees?

A considerable threat to the health of pollinator populations in Australia is the use of pesticides and insecticides in the agricultural industry. These sprays, whilst aimed at killing harmful insects will also kill beneficial insects such as bees. Bees can travel up to 5km from their hive to pollinate flowers and crops, so pesticides used long distances from natural or commercial beehives can still kill worker bees, and in some cases collapse colonies altogether3.

The use of neonicotinoids - a category of insecticide - is particularly damaging to bees. Neonicotinoids have been linked to Colony Collapse Disorder4, a phenomenon that occurs when the majority of worker bees in a colony disappear and leave behind a queen, leading to full hive failure5. Whilst they are banned in the European Union, and voluntarily removed from some retailers, neonicotinoids are still sold wholesale and are used in the farming of particular crops. These include cotton, canola, some cereals, corn, broad beans, sunflower, and other crops of minor production in Australia7.

The cotton industry has been identified as detrimental to bees as cotton is mostly self-pollinating. Because of this, neonicotinoids and broad-spectrum insecticide is used. The insecticide may also drift once sprayed over the cotton, entering nearby fields, polluting waterways, and poisoning native species in nearby habitation8. Although Cotton Australia outlines ways in which to minimise the level of ‘spray drift’ occurring9, beekeepers still experience losses of hundreds of beehives a year due to the cotton industry10.

Why should investors care?

For ESG-aware investors and investment managers, research like this can prompt considerations of supply chains in significantly more detail. It’s also a reminder of just how inextricably linked our investment decisions are on land, business, community and the natural world.

Use of noenicitinoids may present an area of future ESG research for investment managers like AMP Capital, who have a strong, vested interest in ethical investments. Similar to actions taken in response to other animal welfare issues, investors and investment managers alike may opt to engage with users of neonicotinoids to reduce their reliance on the chemical and explore alternatives.

Some more information about Hugh Bruinier and the AMP Capital Youth Advisory Committee

2019 was the inaugural year of the AMP Capital Youth Advisory Committee. The Youth Advisory Committee was established to provide insights to our AMP Capital Ethics Committee and in turn some of our funds on issues relevant to young Australians, and give our youth a forum to voice matters important to them when it comes to investing. The group comprises representatives from 12 Australian and New Zealand universities, who have committed to brainstorming ways that AMP Capital can invest in a more sustainable way into the future. The Committee met twice in 2019, engaging in fruitful debate and discussion around the topics of animal welfare, and social media and privacy issues. We would like to celebrate the work of the Royal Melbourne Institute of Technology’s Committee representative, Hugh Bruinier. Hugh’s research on the effect of insecticides on pollinator populations provided a riveting and thought-provoking take on the topic of animal welfare. We look forward to sharing the insights of the Youth Advisory Committee, as the group prepares to meet and discuss a range of different ESG matters over the course of 2020.

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Important notes

While every care has been taken in the preparation of this article, AMP Capital Investors (UK) Limited, Registered Office at Companies House, 4th Floor Berkeley Square House, Berkeley Square, London W1J 6BX (no. 05524536) makes no representations or warranties as to the accuracy or completeness of any statement in it including, without limitation, any forecasts. Past performance is not a reliable indicator of future performance. This article has been prepared for the purpose of providing general information, without taking account of any particular investor’s objectives, financial situation or needs. An investor should, before making any investment decisions, consider the appropriateness of the information in this article, and seek professional advice, having regard to the investor’s objectives, financial situation and needs. This article is solely for the use of the party to whom it is provided.

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