#CertifiedRaw-Materials

Sustainability challenge and related SDGs:

Over the past 50 years, populations of mammals, birds, fish, reptiles, and amphibians have fallen worldwide by an average of two in three. Most of this decline is due to habitat destruction caused by unsustainable agriculture or deforestation. Habitat loss is not only deadly to animal populations, but also dangerous to humans through the loss of ecosystem services.

Various ecosystems supply fundamental services such as purifying water and air, providing fibres, or pollination. At the same time, they maintain breeding grounds, prevent erosion and flooding, the outbreak of pests and diseases, and much more. All the products we use are based on raw materials. Accordingly, more than half of the world's GDP depends directly on nature or its services.

If we want to continue using food, medicine, wood, water, and many other materials from nature, we must ensure that our extraction processes are sustainable, or better yet, renewable. Together, we can achieve SDG 2 "Zero Hunger" and SDG 15 "Life on the Land."

Possible solutions and their contribution to achieving the SDGs

#CertifiedRawMaterials focuses mainly on three widely used raw materials. The first is cotton, the second is palm oil, and the third is soy. They are all extremely versatile but can also be extraordinarily unsustainable.

So that these renewable (re-growable) materials can continue to be used, certifications ensure that they are sourced more sustainably.

Sustainable cotton reduces pressure on ecosystems through low or no use of pesticides and fertilisers and alternative farming practices, reduces water waste, and provides a safer working environment for farmers and processors. Sustainable cotton is often certified by the Better Cotton Initiative.

Similarly, sustainable palm oil and soy are more environmentally friendly, for example, in reducing deforestation for plantations or preventing the exploitation of workers and the eviction of indigenous peoples from their land. Sustainable palm oil is certified by the Roundtable on Sustainable Palm Oil (RSPO) and soy by the Round Table on Responsible Soy (RTRS). Palm oil is an incredibly productive crop with the highest yields per area used. This density means less land is used per amount of nutrient (supporting SDG 2 "Zero Hunger"), leaving more for other uses (supporting SDG 15 "Life on the Land").

Primarily related SDG Targets: 2.2, 2.3, 2.4, 15.1, 15.2, 15.3, 15.4, 15.5, 15.6

Investment Rationale and Growth Potential

The trend towards #CertifiedRawMaterials is clear: while global per capita cotton consumption has remained stable over the past 60 years, the share of sustainable cotton has increased from 2% ten years ago to 20% today.

Vegetable oils are an important component of diets around the world and a major source of fat. As the population has grown, so has the consumption of vegetable oils. Palm oil accounts for about one-third of all vegetable oils consumed worldwide. Currently, 18% of the world's palm oil is certified, but the goal is to reach 100%.

Whether we like it or not, the raw materials mentioned will remain important in our economic and food systems - in the case of soy and palm oil also because there is no more efficient alternative. But we cannot afford a collapse of the ecosystems. Therefore, sources of renewable resources must be managed sustainably. This is ensured by #CertifiedRawMaterials.