Tackling food waste with innovation

25 November 2022 by National Bank Investments
Piles of coins and shopping cart containing light bulb

In Canada, food waste is an environmental, social, and economic problem. It is estimated that 35.5 million tons of food is lost or wasted each year, of which approximately 12% occurs during the retail phase1. Although the environmental and economic impacts may be obvious, the social implications are also extensive. Food insecurity is top of mind for many Canadians due to the ongoing effects of inflation. Fiera Capital Corporation explains how the theme of food waste fits into a sustainable equity strategy.

Fiera’s perspective

For food distributors and retailers, reducing food waste has become a core part of their sustainability journey. It benefits their bottom line and has positive environmental and social repercussions for the communities.

On a global scale, food waste reduction is one of the sub-targets for the UN Sustainable Development Goal of “Responsible Consumption and Production” (SDG 12). It is also a key component of the Food Retailers and Distributors Standard, an industry framework instituted by the Sustainable Accounting Standards Board (SASB).

Added value to the strategy

The NBI Sustainable Canadian Equity ETF portfolio has several holdings in the grocery and basic goods sectors. For most of those companies, food waste and food insecurity reduction are integral parts of their sustainability targets and core business models. They address food waste directly through intelligent inventory management. It can take the form of engagement and technological integration with suppliers, understanding customer needs and buying patterns, competitive pricing, and even adapting quickly to changing weather patterns. It may also include extensive employee training or investments in improving the supply chain, such as more efficient distribution centres or increased automation.

Discount programs and food rescue partnerships are also becoming increasingly relevant. For example, Metro Inc.’s More Bite program and its association with the re-distributor app Food Hero. Or Loblaw Companies Ltd. and Empire Company Ltd.’s collaboration with Second Harvest. These food rescue and redistribution programs allow these companies to manage their waste more efficiently while positively impacting the environment and the communities in which they operate.

Fiera’s approach and vision

As sustainable business practices become increasingly ingrained into what it takes for companies to grow and build value over time, initiatives like these that address both business and societal needs will distinguish high-quality companies in the long term.

As part of an industry-wide collaboration, Loblaw Companies Ltd., Empire Company Ltd., and Metro Inc. are committed to a 50% reduction in food waste by 2025*. We continue to engage with management to reach these objectives and support further initiatives beyond 2025.

*2016 baseline

Case study

Logo of Lowblaw company limited

Activities - Through their 900+ food banners, the company provides millions of Canadians with access to various food options and discount supermarkets focusing on affordability and convenience. The 1,300+ drugstore banners similarly offer the public access to pharmaceutical products. Ninety percent of Canadians live within 10 km of a Loblaw store. Hence, the company plays a vital role in ensuring food security and access to healthcare throughout the country.

SDG Integration Strategy – Loblaw has been a leader in setting ambitious food waste reduction targets. In 2020, the company achieved their 50% food waste reduction target (baseline – 2016) five years ahead. They have now targeted zero food waste in landfills by 2030. Additionally, they aim to influence food waste reduction in the supply chain. In 2021, Loblaw enlisted 12 suppliers to commit to halving their food waste by 2030.

SDGs contribution:

2 - Zero hunger
3 - Good health and well-being
12 - Responsible consumption and production
14- Life below water
15 - Life on land

Why invest in this strategy?

  • Long-term capital growth.
  • Actively managed portfolio that differs from market indices.
  • Invests in a socially responsible way in resilient and durable businesses.

In what strategy can we find this issuer?

NBI Sustainable Canadian Equity ETF (NSCE)

Sub-advised by Fiera Capital Corporation

1  Nikkel, L., Maguire, M., Gooch, M., Bucknell, D., LaPlain, D., Dent, B., Whitehead, P., Felfel, A. (2019). The Avoidable Crisis of Food Waste: Roadmap; Second Harvest and Value Chain Management International; Ontario, Canada.

Legal notes

The information and the data supplied in the present document, including those supplied by third parties, are considered accurate at the time of their printing and were obtained from sources which we considered reliable. We reserve the right to modify them without advance notice. This information and data are supplied as informative content only. No representation or guarantee, explicit or implicit, is made as for the exactness, the quality and the complete character of this information and these data. The opinions expressed are not to be construed as solicitation or offer to buy or sell shares mentioned herein and should not be considered as recommendations.

Views expressed regarding a particular company, security, industry, market sector, future events (such as market and economic conditions), company or security performance, upcoming product offerings or other projections are the views of only Fiera Capital Corporation, as of the time expressed and do not necessarily represent the views of National Bank of Canada and its subsidiaries (the “Bank”). Any such views are subject to change at any time based upon markets and other conditions, which could cause actual results to differ materially from what Fiera Capital Corporation presently anticipates or projects. The Bank disclaims any responsibility to update such views. These views are not a recommendation to buy or sell and may not be relied on as investment advice.

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