Agricultural production is closely related to both water and air pollution. For example, some chemical fertilizers used in agriculture and antibiotics used in aquaculture have harmed various species and ecosystems; some kinds of food packaging have generated enormous amounts of garbage; moreover, the food industry contributes to climate change, accounting for nearly one-third of global greenhouse gas emissions.

In turn, climate change threatens the food supply chain, putting natural resources at serious risk, which could lead to catastrophic consequences such as food shortages, inflation and unemployment.

In order to build a sustainable food ecosystem and solve food security issues, the United Nations (UN) has already established 17 Sustainable Development Goals (SDGs) to address global environmental, social and economic challenges including zero hunger, good health and well-being, clean drinking water and sanitation, responsible consumption and production, climate action, conserving and sustainably using the oceans and marine life, and protecting and restoring terrestrial ecosystems.

Governments around the world are pouring resources into SDG-relevant sectors, but public expenditure alone is not enough. By 2030, the world will face an annual investment gap of as much as 2.5 trillion U.S. dollars if we are to realize the UN's SDG goals. This is an opportunity for the private market to make a difference. In fact, many private companies around the world are committing to provide various solutions for issues such as food safety, food efficiency and water treatment, creating attractive opportunities for investors.

Environmental, Social, and Governance (ESG) have also emerged rapidly as a major trend in the investment community. In addition to seeking returns, many investors want to invest in companies that have a positive impact on the environment and society. As consumers' health awareness increases, the global organic food market has recorded healthy double-digit growth in recent years. On the other hand, in the face of a turbulent political and economic situation as well as an increasingly strict regulatory environment, investing in companies that are committed to providing innovative solutions would be beneficial to any portfolio by making it more resilient and decentralized.

The food security investment strategy of Allianz Global Investors combines the food theme with the concept of sustainable development, aims to invest in projects that meet the UN SDGs, especially the goal of zero hunger, and is committed to exploring structural growth driven by positive economic and social changes.

In general, food security’s investment strategy offering solutions for the quality and safety of the entire food chain. For example, sustainable agriculture can minimize the negative impact on the ecology and companies focusing on the food supply chain that optimize the food conversion process, improve the sustainability of food packaging and promote sustainable and healthy food choices.

The food security investment theme is not homogeneous, and the vast number of choices is beyond imagination because the entire food supply chain includes agriculture, production, food transformation, distribution, nutrition, food quality and safety. The diversification of industry will cover consumer goods, information technology, materials, industry, real estate, and health care. It also includes companies in Europe, the United States, and the Asia-Pacific region. To capture opportunities flexibly, we need to adopt active and innovative management methods.

The Allianz Global Investors research platform offers unique insights and actively creates more returns for customers. At the same time, it aims to contribute to improving the environment and society, creating a win-win solution for both investors, the environment and society at large.