In 2016, Harvard Business Review reported that global food demand is expected to increase anywhere from 59% to 98% by 2050. This increase is paired with a growing focus on sustainability and global initiatives for decarbonization. Being that agriculture is one of the biggest contributors to global warming, transitioning to controlled environment agricultural solutions, like vertical farming and aquaculture, is vital to ensuring that by mid-century we can responsibly feed nine billion people.
Vertical farming was developed to mitigate challenges like food insecurity, growing demand for chemical pesticide-free produce, limited arable land, and labor cost and shortages. It allows farmers to grow produce indoors, year-round and near the consumer by controlling light, temperature, water, and carbon dioxide levels. Its vertical design allows for a large output in a small space, which will prove vital as more people migrate to urban areas.
Vertical farming reduces the carbon footprint of transportation in traditional agriculture, eliminates the need for chemical pesticides and optimizes water and land use for less waste. With innovative automation and digitalization technologies, it can optimize production and safety in the produce industry.
Aquaculture is the controlled process of farming fish and other aquatic organisms for human consumption and to replenish populations of threatened and endangered species. It is a realistic way to meet the growing seafood demand as we can no longer rely on the ocean’s natural productivity. While population growth is driving this demand, overfishing and pollution also contribute to the need for regulated fish farming practices that are healthy, safe, and sustainable.
This process is important for food security, as it helps reduce reliance on food imports for some countries and expands fish availability in others with limited access to farmed species. Further, fish produce lower carbon emissions than other animal protein sources like poultry and cattle, due to their low feed conversion rate (FCR).
Technology upgrades in the aquaculture sector like automation and IoT systems, artificial intelligence, and data analytics can further reduce FCR, habitat destruction, and the spread of food safety concerns like parasites and disease and can increase energy efficiency.
Digitalization is making a difference
Siemens recently established a Center of Competence (CoC) for the controlled environment agriculture industry to help companies of all sizes realize their digital transformation with end-to-end support. This support stems from the combined product and solution offerings of Siemens Digital Industries, Siemens Smart Infrastructure, and Siemens Financial Services (SFS).
While farmers understand the harm their work can have on the environment, transitioning to more sustainable business practices often proves too costly to become a short-term priority. But, as the benefits of green agricultural technology begin to show in the output of early adopters, companies like SFS are stepping up to enable this vital transition at a practical cost with unique financing solutions and investments.
Relying on Siemens’ collective expertise, we provide a unique perspective on the emerging investment opportunity in controlled environment farming. We hope to make sustainable business practices more attainable for companies in vertical farming and aquaculture, enabling the necessary technology upgrades via our financing solutions. Both investment fields contribute to decarbonization as they localize production, reducing transportation needs.Steffen Grosse, CEO of the Equity Finance team at SFS
This isn’t the first time that SFS has pioneered investment into new markets. Initially, wind farm projects also struggled to find financing options as investors were deterred by the early-stage projects and decided to wait for later stages of development and operation to invest. SFS was an early investor and continues to invest in wind energy and other renewable energy sources.
With investments in vertical farming and aquaculture, there is hope for sustainably feeding future generations with fish protein and fresh, local produce. Making these options more widely available will give farmers the ability to provide sustainable options for consumers because, when it comes to ways in which we can all make a difference, there are plenty of fish in the sea. We must be innovative in our methods, humble in our approach, and empathetic in our actions to responsibly feed our growing global population.