The Interfaith Center On Corporate Responsibility (ICCR), which represents 300 faith-based organizations with over $100 billion in assets, has just released its Guidelines For Responsible Investing In Food Commodities, which gives investors recommendations to promote responsible participation in these markets.
The ICCR guidelines come in response to growing evidence and concern that excessive speculation in food commodity markets inflates food prices, contributing to global food prices bubbles, which have been linked to malnutrition and famine among the worlds poorest and most vulnerable communities:
“In the search for higher returns, the participation of institutional investors in commodity markets has grown markedly in recent years while the evidence linking commodities speculation to food price volatility continues to mount.”
The guidelines recommend that institutional investors not currently participating in commodity markets not enter the asset class at all. For those investors already participating, ICCR urges them to avoid these new commitments:
- direct investments in food commodities and/or their
derivatives;- investment in food commodity indexes and exchange
traded funds (ETFs).
In addition, ICCR offers four other recommendations for investors:
- Implement responsible policies for existing food
commodities investments that acknowledge social and
environmental impacts- Disclose the [Environmental, Social and Corporate Governance] ESG impact of trading in food
commodities- Advocate for improved regulation of global
commodities trading- Support alternative investments, such as impact investing,
that help mitigate the risk of famine and build sustainable
communities
Read the full ICCR guidelines here.
Check out our other materials for investors.