On December 7th Orbitas launched its first global report quantifying the hidden financial risks and burgeoning opportunities facing tropical commodity producers and investors from climate transitions. Alongside ministers and senior officials from the UK, Norwegian and German governments, Orbitas led a high-level panel alongside private sector leaders to discuss these risks and opportunities climate transitions present to the tropical commodities sector.
You can view the recordings of the session and see our key findings below.
SPEAKERS AND VIDEO LEGEND:
- Video One: Speech from Lord Martin Callanan – UK Minister Climate Change and Corporate Responsibility
- Video Two: Speech from Dató Abdul Rahman Ahmad – Group CEO, CIMB Group
- Video Three: Report Presentation from Mark Kenber – Climate Advisers UK CEO and Managing Director of Orbitas
- Video Four Panel:
- Karsten Sach – Director General, German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety
- Shally Venugopal – Acting Chief Executive Officer at Concordian LLC
- Graham Stock- Partner, Blue Bay Asset Management
- Cristina Hastings Newsome – Global Sustainability Lead Louis Dreyfus & Co.
- Video Five: Speech from Per Fredrik IIsaas Pharo – Director, Norwegian International Climate and Forest Initiative
REPORT KEY FINDINGS:
- Growth strategies premised on converting forests into farmland have no future: In a world that adequately limits global temperature from rising, up to 600 million hectares of agricultural land – or over 10% of agricultural land globally – would revert to forests.
- Companies relying on expansion into forested lands face significant asset stranding. In Indonesia, up to 76% of unplanted forest concessions and 15% of existing palm oil assets could be written-down or off under a meaningful national climate transition.
- Greenhouse gas pricing and/or regulations will disrupt agricultural business models; global palm, beef, and soy producers alone face $19 billion in additional costs.
- Of 24 capital providers recently surveyed by Orbitas – all of whom had tropical commodity exposure – not one had screened their loan books or investments for agricultural transition risks.
- Opportunities to create value and generate profitability exist if producers strategically invest in regenerative agriculture and diversifying revenue streams. For example, in Indonesia, climate transitions could boost the palm oil industry’s value by US$9 billion, and in Colombia, potential carbon sequestration revenues of up to US$485/hectare could dwarf current cattle ranching profits.