10 ESG Investments for 2021 - Part 2

Precision farming

Andrew Willis 29 April, 2021 | 4:53PM
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See last week's ESG investment for 2021 here

Andrew Willis: It’s time again for Morningstar Sustainalytics’ “10 for 2021” – which presents investors with 10 ESG investment themes that can positively contribute to advancing United Nations Sustainable Development Goals. In this series, we’ll feature a new development each week so that you can ‘create impact through thematic investing’.

This week, we’re talking about precision farming – which is using technology to make each step of the farming process more efficient. Combining the latest innovations with activities such as irrigation or fertilizer application, we can ensure that we’re not wasting chemicals and resources – like water - that can be harmed by chemical run-off.

The types of techniques used to combine innovation with agriculture are rooted in the ‘digitization’ of each individual field, or crop, creating separate profiles that allow farmers to account for soil variations or plant nutrition issues. Canada’s fertilizer giant, Nutrien, offers precision farming solutions that involve plant tissue sampling, soil sampling and a data platform called ‘Echelon’ that combines layers of data to see issues in real-time and helps optimize yield.

We see the precision farming market growing to 9 billion U.S. dollars by 2025, up from 3.9 billion U.S. dollars in 2018. And Senior equity analyst Seth Goldstein recently raised his fair value estimate for Nutrien (NTR) following strong sales last year and expectations this year of a rebound for the business and strong farmer demand for crop inputs this year.

We see lower levels of unmitigated ESG risks and issues thanks in part to precision farming and the increased control of the chemicals it gives us – helping to yield more sustainable growth for investors.

For Morningstar, I’m Andrew Willis.

Learn about Sustainable Canadian Funds here

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Nutrien Ltd57.76 USD1.03Rating
Nutrien Ltd78.58 CAD0.92Rating

About Author

Andrew Willis

Andrew Willis  is Senior Editor at Morningstar Canada. He previously produced content for Fidelity Investments and finance industry events for Euromoney Institutional Investor and has written in the past for Thomson Reuters and CNN. Follow him on Twitter @Andrew_M_Willis.

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