The responsible food chain sector Give sense to investments and - - PowerPoint PPT Presentation

FOR PROFESSIONAL INVESTORS

The responsible food chain sector

Give sense to investments and benefit from potential growth opportunity

Alexandre Jeanblanc - June 2016

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76 different toxic products found in human blood due to food

Critical water and soil pollutions

• 3 million people intoxicated by pesticides worldwide according to the WHO**
• 300 000 km² of arable land (the size of Italy) disappear each year due to over-exploitation,

excessive use of chemicals fertilizers, irrigation malpractice and loss of vegetation***

• More than 100,000 km2 of forests disappear each year globally

25% of soil globally are very degraded*

• In Europe, 50% of wetlands are endangered****
• Health authorities are increasingly worried about the potential impact that endocrine

disrupting substances might have on organic human functioning (decreasing man fertility

• r more frequent cancers)*****

In Europe, 20% of surface water is at serious risk from pollution****

*http://www.fao.org/resources/infographics/infographics-details/fr/c/266125/ ; **http://www.who.int/mediacentre/factsheets/fs313/fr/ ; ***http://www.unesco.org/mab/doc/ekocd/chapter11.htm; http://www.planetoscope.com/sols/1175-disparition- de-surfaces-agricoles-dans-le-monde.html ; ****http://www.statistiques.developpement-durable.gouv.fr/indicateurs-indices/f/1831/1902/pesticides-eaux-douces.html ; *****An endocrine disruptor is an exogenous substance or mixture that alters function(s) of the endocrine system and consequently causes adverse health effects in an intact organism or its progeny or (sub)populations.; by WWF in 47 people(including 39 members of European Parliament) By WWF in 47 people(including 39 members of European Parliament

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Source: United Nations Environnent Programme (UNEP), 2009 ; CNRS, M. Gattuso, Océanographe

Accelerating climate change

• Rising temperatures are accelerating glacial melt. The disappearance of this freshwater source could have catastrophic effects on ecosystems and water

supplies for many people (particularly for Pakistanese, Indian and Chinese populations)

• Because of the acidification of oceans, limestone aquatic organisms biodiversity will decrease by 70% and other aquatic organisms by 30% in the 100

years to come

• In 2030, half the global population will live in water stressed areas

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The food value chain from production to distribution

Growers & Inputs Technology & Logistics Basic Foods & Ingredients Food Safety Sustainable Packaging Value Added Foods Distributors

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Reducing CO² emissions Recycling packages Promoting healthy and natural food Favoring sustainable growing practices Reducing food waste

Some companies in the food value chain act against that backdrop

Increasing food safety

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Sustainable Packaging, Norway

• An innovative company specialised in recycling, mining and

food sorting.

• Created the first reverse vending machine.

Recycling packages

• Through

its reverse vending machine, captures 35 bn used beverage containers annually; equivalent to 20 mn tons of GHG* emissions avoided (circa 2 mn car CO² emissions per year).

Reducing CO² emissions

• Put in place the ISO 14001 EMS

standards

• Issues annually an Environmental

Report (waste, water and energy).

• Has committed to reducing its GHG

emissions by 25% in two years.

Innovation

• “Sentinel II’s high resolution sensors and

simple user interface allow the customer to set the sorter to reject a broad range of defects such as green, sunburn, mold, anthracnose rot or worm damage while also removing foreign materials such as cotton stalks, corn cobs, plastic, glass, metal, wood bone and animal matter.

• An enhanced, patented, high-speed rejection

system efficiently removes defects and foreign material, operating at higher speeds than previous models.”

Tomra, leader in recycling

* GHG : Greenhouse Gaz

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Food Safety, France

• With over 17,000 staff in around 200 laboratories

across 36 countries, Eurofins Scientific is the world leader in food testing. It is also number one in the world in the field of environmental laboratory services

• It comprises testing of water, air, soil, waste and other

products to assess their quality and impact on health and the environment. It has extensive experience in testing for all organic and inorganic pollutants, including pesticides, chemicals, heavy metals, drugs, GMOs*.

Increasing food safety

• Tests for toxins in food. Works to prevent

use of non-allowed chemicals

• Environmental tests on water and soil to

analyse pollution. More than 70 molecules are sought in the samples

Recycling

• Operations have a recycling focus.
• Developed

an Environmental Management System (EMS)

Eurofins, leader in food safety testing

*GMOs: Genetically Modified Organisms

Reducing food waste

• Microbiological quality : Internal

development of a method to seek bacteria in plastic corks and bottles

• Control of microbial growth on surfaces

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Distributors, US

• Supermarket chain specialising in organic,

natural and responsibly sourced food.

• Stores in the US, Canada and the UK
• Has a policy of rewarding its farmer partners

equitably.

• Favors practices protecting pollinators

Promoting healthy and natural food

• Focuses on foods with nutritional

and ecologic value.

• Bans

hydrogenated fats

• r

artificial colors, flavors, preservatives or sweeteners

Promoting sustainable growing practices

• Responsibly

grown rating system : Controlling farm measures to protect human health and environment. Protecting air, soil and water (rivers, lakes, and oceans)

• Water conservation and protection : Using a

drip irrigation system to save water

Whole Foods Market, leader in organic and natural food retailing

Food safety

• Bans endocrine-active materials in

products and packagings, such as bisphenol A or phthalates

• Bans irradiated food

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Sustainability exclusion rules

Exclusion of activities – “WHAT”

Full exclusion

• Producers and developers of GMOs
• Food & Agri commodities traders
• Producers of first generation biofuels
• Producers of inorganic fertilisers
• Producers of palm oil

Limited at 5% of revenues

• Production of tobacco
• Production of alcoholic beverages
• Production of aspartame and artificial sweeteners
• Production of Bisphenol A (BPA)
• Production of artificial food colourings or dyes

Limited at 20% of revenues

• Highly processed and low nutrition foods (“junk food”)
• Carbonated soft drinks and sodas

Exclusion of companies with poor or controversial processes – “HOW”

• Land management and local communities
• Bio-diversity and land use
• Labour management and health & safety
• Supply chain management (responsible sourcing)
• Animal welfare
• Product safety and marketing practices
• Chemical safety management
• Toxic Emissions and waste
• Water management
• Carbon Emissions

In the full Sustainability Framework all these activities and risks are described and the policies and processes required are detailed.

Companies with major controversies within these areas will be excluded from the Sustainable Universe, following the Precautionary Principle

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Environmental, Social and Governance issues

Environment

• Specific risk factors : e.g. Hazardous waste,

toxics in production

• Environmental issues: Fines for pollutions, spills
• Risk/issues addressed : Relevant policies,

management systems

• Are process well disclosed : Policies, CRS-

report, EMS disclosed

• Are processes well integrated : E-committees,

HSE officer

• Are opportunities captured : Resource

effectiveness, industry leadership

Social

• Specific risk factors : Heath & Safety, lack of

training, employment rights

• Social issues : OSHA incident database
• Risks/issues addressed : policies, systems,

standards

• Process disclosure : Policies, H&S statistics,

systems

• Process integration : HSE committee/officer
• Opportunities captured : H&S training, industry

leadership

Governance

• Board structure and effectiveness : tenures,

experience, independence

• Shareholders rights : Voting rights, anti-takeover

defences

• Ownership structure: Dominant , controversial

shareholders

• Management remuneration: alignment to long-

term performance

• Behaviour, reputation, internal controls: anti-

trust, litigation, related transactions

• Proxy voting practices: following local best

practice

• Accounting practices: aggressive or conservative

10

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Expected superior outperformance

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Source: BNP Paribas Asset Management. Data as of 31 May 2016. Investors should ensure that they are fully informed about the sub-funds, classes and sub-classes of shares that are authorised to be marketed in their country of residence and the constraints applicable in each of these countries. The investments in the above funds are subject to market fluctuations and the risks inherent in investments in securities. The value of investments and the income they generate may go down as well as up and it is possible that investors will not recover their initial outlay. Past performance or achievement is not indicative of current or future performance.

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SMaRT Food, to solve environmental issues and promote high quality food

Response to increasing concerns about environmental issues Respect of strict ESG criteria Long-term value creation

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Risk factors

• The “AQUA strategy” is primarily exposed to equity-market risk: its minimum exposure is 90% of net assets of which a

maximum of 50% is to emerging markets (the supervision and operating conditions of some of these markets may deviate from international standards).

• The benchmark index is the MSCI World (NR) EUR. The investment objective is not to match the index, and as such the

performance of the “AQUA strategy” can differ significantly from that of the benchmark.

• The “AQUA strategy” is exposed to the small- and mid-caps market. A downturn on these markets may result in a decrease in

net asset value that is quicker or stronger than on other markets.

• Investors are informed that the performance of the “AQUA strategy” may not meet their expectations and that their invested

capital may not be fully returned to them.

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Disclaimer

This document is issued and has been prepared by BNP Paribas Asset Management S.A.S. (BNPP AM)* a member of BNP Paribas Investment Partners (BNPP IP)**. This document is produced for information purposes only and does not constitute:

• 1. an offer to buy nor a solicitation to sell, nor shall it form the basis of or be relied upon in connection with any contract or commitment whatsoever or
• 2. any investment advice.

This document makes reference to certain financial instruments (the “Financial Instrument(s)”) authorized and regulated in its/their jurisdiction(s) of incorporation. No action has been taken which would permit the public offering of the Financial Instrument(s) in any other jurisdiction, except as indicated in the most recent prospectus, offering document or any other information material, as applicable, of the relevant Financial Instrument(s) where such action would be required, in particular, in the United States, to US persons (as such term is defined in Regulation S of the United States Securities Act of 1933). Prior to any subscription in a country in which such Financial Instrument(s) is/are registered, investors should verify any legal constraints or restrictions there may be in connection with the subscription, purchase, possession or sale of the Financial Instrument(s). The prospectus, key investor information, articles of association, as well as the annual and semi-annual reports may be obtained free of charge from the representative in Switzerland, BNP Paribas (Suisse) SA, 2 Place de Hollande, 1204 Geneva; the paying agent in Switzerland is BNP Paribas Securities Services, Paris, Zurich branch, 16, Selnaustrasse, 8002 Zurich. Opinions included in this document constitute the judgment of BNPP AM at the time specified and may be subject to change without notice. BNPP AM is not obliged to update or alter the information or opinions contained within this

• document. Investors should consult their own legal and tax advisors in respect of legal, accounting, domicile and tax advice prior to investing in the Financial Instrument(s) in order to make an independent determination of the

suitability and consequences of an investment therein, if permitted. Please note that different types of investments, if contained within this document, involve varying degrees of risk and there can be no assurance that any specific investment may either be suitable, appropriate or profitable for a client or prospective client’s investment portfolio. Given the economic and market risks, there can be no assurance that the Financial Instrument(s) will achieve its/their investment objectives. Returns may be affected by, amongst other things, investment strategies or objectives of the Financial Instrument(s) and material market and economic conditions, including interest rates, market terms and general market conditions. The different strategies applied to the Financial Instruments may have a significant effect on the results portrayed in this website. Past performance is not a guide to future performance and the value of the investments in Financial Instrument(s) may go down as well as up. Investors may not get back the amount they originally invested. The performance data, as applicable, reflected in this website, do not take into account the commissions, costs incurred on the issue and redemption and taxes. *BNPP AM is an investment manager registered with the “Autorité des marchés financiers” in France under number 96002, a simplified joint stock company with a capital of 67,373,920 euros with its registered office at 1, boulevard Haussmann 75009 Paris, France, RCS Paris 319 378 832. www.bnpparibas-ip.com. **“BNP Paribas Investment Partners” is the global brand name of the BNP Paribas group’s asset management services. The individual asset management entities within BNP Paribas Investment Partners if specified herein, are specified for information only and do not necessarily carry on business in your jurisdiction. For further information, please contact your locally licensed Investment Partner.