AgFunder, a venture capital firm focused on agri-food tech startups based in Silicon Valley and Singapore, has just launched GROW Impact Fund, its first to be entirely dedicated to technologies that will perform on environmental, social and governance (ESG) metrics across the food system. It comes as ESG-related funds have proven more crisis-resilient and have outperformed traditional investments amid the coronavirus pandemic.
On June 30, AgFunder announced that it will be launching an impact fund. Called the GROW Impact Fund, every investment in the fund will be evaluated according to ESG principles and the potential for the technology and business model to support the achievement of measurable environmental and social impact outcomes. It will invest in at least 60 tech and deep-tech agri-food startups globally that are creating solutions with a social and environmental impact to the food system.
Investors in the fund will receive regular reports on the performance of every portfolio company against specific targets outlined by the United Nations’ Sustainable Development Goals (SDGs).
The need to revolutionise our food system is becoming critical. The problems are manifold and acute.Michael Dean, Founding Partner at AgFunder
“We’ve been contemplating launching an impact fund at AgFunder for a while now,” wrote Michael Dean, founding partner of AgFunder, in the announcement.
“The need to revolutionise our food system is becoming critical. The problems are manifold and acute. From the significant production challenges presented by climate change, to the effects of over-farming and the degradation of soils from the overuse of fertilisers, to the continuing widespread deforestation that’s compensating for declining land productivity.”
Dean added that the coronavirus pandemic has represented a wake-up call for many investors, exposing the link between our current broken food system and the rising frequency of diseases like Covid-19. In early July, experts from the U.N. Food and Agriculture Organisation (FAO) listed the unsustainable demand for animal protein and intensive livestock production as key drivers of emerging zoonotic diseases.
From the significant production challenges presented by climate change, to the effects of over-farming and the degradation of soils from the overuse of fertilisers, to the continuing widespread deforestation that’s compensating for declining land productivity.Michael Dean, Founding Partner at AgFunder
The launch of AgFunder’s GROW Impact Fund comes as investors begin to shift their strategies towards ESG-focused funds, which now represent not only resiliency but also greater financial returns.
Recent statistics obtained by global research firm Morningstar shows that environmentally sustainable funds have outperformed traditional funds across the board, matching or beating them for 10 years prior to the pandemic and during the coronavirus sell-off.
Lead image courtesy of Getty Images / iStock.