Nearly half of all fruit and vegetables produced globally are wasted each year. In the US, almost 30% of all food is thrown away, while the UK wastes 6.7 million tons of food each year. In Malaysia, figures show that 15,000 tons of food is wasted daily.
It’s clear that food wastage is an international problem. However, not only is wasted food a personal and environmental problem, but it has also quickly transformed into a political and economic problem, too. Let’s take a look at why it’s so important for governments and businesses to address the food waste problem and how green initiatives can power economies. Finally, we’ll assess the steps Malaysia is taking to handle the problem of food waste.
Do food waste and green initiatives impact currency valuations?
Last year, the UK government under Theresa May announced a scheme to reduce food waste in the country, with the aim of redirecting produce so it could be eaten rather than thrown away. In addition, she also outlined plans for the economy to go carbon neutral and achieve ‘net zero’ status. Since Boris Johnson assumed the premiership at the end of 2019, he has announced that £800m will be invested for carbon capture and storage.
Although the launch of these initiatives is good for the planet and the future, the drive towards sustainability is also creating political and economic successes. After Boris Johnson announced his plan to create a green energy system in October 2020, the pound surged against the dollar, rising from 1.2254 to 1.2296 in 12 minutes. This is because huge political announcements such as these fundamentally reshape the economy and create volatility in currency markets as traders react to news.
For those who are involved in forex trading, volatility creates opportunity. This is because, as billions are traded on the forex market every day, only the slightest price movement is required for a trading opportunity to arise.
As green initiatives such as the UK’s carbon zero target have the power to transform economies and move financial markets, governments around the world are realizing the power that this form of legislation can have on their economy. As a result, over the past few years and months, we’ve seen governments from all across the world launch green initiatives to help combat food waste and to increase environmental protections.
For example, at the close of 2019, the EU adopted 2050 climate neutrality goals and agreed to work on a ‘European Green Deal’. In addition, in Australia, the government has committed $3.5 billion to deliver on the country’s 2030 Paris Agreement commitments.
In Malaysia, the government has agreed to reduce its carbon emissions by 45% by 2030. Looking at food waste specifically, the EU has also adopted Sustainable Development Goal 12.3, which aims to halve per capita food waste by 2030.
What is the Malaysian government doing to tackle the problem?
Former Malaysian Prime Minister Mahathir Mohamad spent most of his 2018-2020 term positioning Malaysia as a champion of sustainability in the developing world. As a result, after a report showed that Southeast Asia would be hardest hit by the effects of climate change, Malaysia has committed an unconditional reduction of emission intensity of 35% by 2030. In doing so, Malaysia gained recognition on the international stage thanks to the government’s response to sustainability targets.
However, on a national level, little has been done to combat problems caused by food waste. In fact, it’s still estimated that food waste in Malaysia could feed up to 12 million people a day. So, although the government has developed a national strategic plan for food waste management, any achievements made by the task force seem to be minimal.
As a result, businesses need to be proactive on an individual level. One industry that’s adopted this viewpoint is the hotel industry, where individual hotels are looking to cut down their food waste to increase profitability. By relying on tools such as Winnow Vision and minimizing waste with smart packaging, these hotels are leading a food waste revolution in the country, and other businesses would be wise to follow their lead.
In conclusion, although targets are now being established at a political level to make economies more sustainable, individual businesses need to take responsibility to help governments hit these newly-formed sustainability targets. If Malaysian businesses can get the country’s food waste situation under control and help improve sustainability, the economic impacts could be huge, as the rising GBP value has shown in the UK.