Why You Need to Adopt Scientifically Responsible Investing Practices

Scientifically responsible investing practices should be more wide widespread in the 21st century. Source: Fool Editorial/Flickr.

Socially responsible investing has become pretty popular in recent years as a growing population of investors has decided to take a stand against everything from climate change to labor rights to the tobacco industry. While there's often overlap between social responsibility and science, that overlap transforms into a giant crevasse when genetically modified organisms are the topic. The loud minority of consumers that demand GMO-labeling laws from politicians and GMO-free lineups from coffee at Starbucks (NASDAQ: SBUX  ) , groceries from Whole Foods Market (NASDAQ: WFM  ) , laundry detergent infused with renewable algal-oils from Ecover, and burrito wraps from Chipotle Mexican Grill (NYSE: CMG  ) are doing so at the expense of everyone else.

This isn't just about biotech crops and synthetic biology, however: this about technological innovation. You wouldn't allow a minority of consumers to derail the benefits of additive manufacturing, next-generation battery technologies, or slimmer TV screens because of the risks we'll assume if we commercialize them (3-D printed guns, energy-intensive production processes, and hazardous material usage), because you can see their relevance to your everyday life. Why should we take a different stance on more abstract technologies such as genome editing and organism engineering? We cannot base the majority of our economy, society, and stock market on science and then pick and choose when we want to listen to it.

The problems with GMO-free
A loud minority of consumers often rank organic production methods ahead of biotech production methods in terms of environmental footprint and nutritional and health benefits. These views directly contradict findings from the U.S. Department of Agriculture and Stanford University, respectively. In a survey of the nation's farmers, the USDA found that nearly every major organic crop yield falls "moderately to substantially" below national averages.

Organic crop

% of Overall Average Yield

Corn

71%

Soybeans

66%

Spring Wheat

47%

Grapes

51%

Apples

88%

Oranges

43%

Potatoes

72%

Source: Dr. Steven Savage analysis of USDA data.

To transition all 30 major crops grown in the United States to organic production would require an additional 122 million acres of farmland, or a 39% increase in the nation's total farmland. That's equivalent to the current total farmland of Iowa, Illinois, North Dakota, Florida, Kansas, and Minnesota combined. It's also equivalent to the entire land area of Spain. Consumers demanding GMO-free lineups fail to recognize that increasing organic farmland risks advancing civilization's advance on wild, untouched lands. How responsible is it for Chipotle Mexican Grill and Starbucks to switch their supply chains to GMO-free ingredients? 

That reality, as well as the fact that organic farmland severely lags behind biotech crop farmland, will make it impossible for all of your favorite brands to switch to GMO-free ingredients. There's a reason Starbucks has no plans to transition to organic dairy milk to complement its organic soy milk offerings in Europe and why only one-of-12 Cheerios brands are GMO-free -- and it has nothing to do with corporate control. There simply isn't enough supply, nor is increasing that supply economically or environmentally feasible.

This clever advertisement fails to account for the myriad issues facing organic supply chains. Source: GMOinside.

The nutritional and health claims don't hold up, either. Really smart people at Stanford University failed to find evidence suggesting organic foods are more nutritious or healthy than conventional foods. That means Whole Foods Market and Chipotle Mexican Grill are sourcing more expensive ingredients and products that are produced less efficiently than the ingredients and products they're replacing to provide no additional benefit to their customers.

Chipotle Mexican Grill may be able to cash-in on a short-term trend, but it certainly doesn't seem sustainable in the long-term. Would you really shop at Chipotle Mexican Grill over a cheaper quality competitor because it used GMO-free ingredients? Perhaps, but I doubt most consumers would. How can investors largely turn a blind eye to such an outrageous and short-term business strategy?

If organic production is drastically less efficient than modern production systems and doesn't offer any nutritional or health benefits, then why should it be championed as a real solution to the obstacles facing our nation's food supply and demanded by consumers? We live in a country where many people desire the latest gadgets, cars, and fashion trends -- often driven by innovation and science -- yet some demand centuries-old agricultural practices.

Foolish bottom line
There are real benefits to organic food, such as reducing pesticide use and synthetic fertilizer runoff, but it is an inferior production method that falls woefully short in its ability to feed the world. Besides, there are biotech crops that offer those benefits, too, while protecting yields. When scientific reports and recommendations from our nation's leading institutions are ignored, it washes out our nation's global competitive scientific advantage. Many people have adopted socially responsible investing practices or portfolios. Why is it so crazy to suggest we begin investing in a scientifically responsible manner, too?

Does organic food really pay dividends?
Most evidence seems to point to the harsh truth that organic foods don't offer all of the benefits that they claim to yield. But even if a diet high in organic food doesn't pay dividends, your portfolio still can. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here now.


Read/Post Comments (14) | Recommend This Article (10)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On June 19, 2014, at 10:40 AM, cluckgochicken wrote:

    Believe what you want, but you don't know what you don't know.

  • Report this Comment On June 19, 2014, at 11:09 AM, TMFBlacknGold wrote:

    @cluckgochicken

    That is true -- we don't the unknowns for any technology. But when leading institutions and nearly 100% of plant scientists worldwide fail to find a health risk from consuming foods containing ingredients from biotech crops, in addition to the efficiency and sustainability benefits of biotech crops over previous production methods, using the precautionary principle is a cop out. It's easy to file biotechnology into the "too hard" category because it's abstract, but I bet a round Earth, gravity, and evolution were once in the "too hard" category, too.

    Maxxwell

  • Report this Comment On June 19, 2014, at 1:31 PM, pondee619 wrote:

    There isn't a crop today that hasn't been genetically engineered. People today would not recognize corn in its oringnal state. There is not a tomato that is non-hybridized. Sweet corn did not exist until it was created through cross breeding. Plants would still be much more susceptible to disease without genetic engineering, which has been going on since the dawn of farming. The world is starving, if we don't do all we can to feed ourselves, we are doomed. Those complaining about genitic engeneering have to get their heads out of the sand and face reality. GMO crops are no more harmful than "organic", and their better yeilds allow more of us to eat.

  • Report this Comment On June 19, 2014, at 1:57 PM, jmbring wrote:

    this piece should probably begin with a disclosure of the author's position of "Editor-in-Chief of SynBioBeta, an organization dedicated to nurturing stable growth for startups in the synthetic biology industry"

    to be fair, this is clearly written in the author bio. whether anyone bothers to read it is another matter.

    this piece is biased and misleading. repeated statement of “a loud minority” are an easy giveaway to a thinly-veiled lobbying effort. a few fallacies presented or suggested:

    -GMO labeling demands are tantamount to eliminating GMOs

    -GMO foods are conclusively, overwhelmingly evaluated as safe for humans, ethical for animals, safe for the environment, by entities with no conflicting interests.

    -GMO methods, intellectual property ownership, and other issues away from the actual food don’t cause any harm to consumers, directly or through the environment.

    -consumers want organic foods only for their own (admittedly, possibly perceived) health benefits.

    in truth, the issue of GMOs (and tangentially, organic foods) – and the public opinion of it - is nuanced and far more complicated than this article suggests, and the piece hurts the author’s credibility more than it helps. and that’s too bad, because feeding the world is indeed a big problem now, and very likely to become much worse. the author is correct (at the very least) in concern over organic yields, misunderstanding of organic benefits, and maximizing food production. we will have to use science to improve food production – in the end we will find there’s no debate there. the question is implementation. the author’s approach is heavy-handed and echoes of industrial interest ; i hope the consumer and his/her environment is the center of the debate and progress.

    and because i mentioned disclosure, here's mine: i believe the consumer has a right to know anything and everything concerning the origin of food. i believe in rigorous development and unbiased testing of any methods that improve food production, and promotion of methods that are conclusively safe for humans, ethical for animals, and sustainable for the environment. and finally, i believe when methods are monopolized, the consumer loses.

    my family and i grow fruit and vegetables for ourselves and our friends, you might call it sorta-organic but it’s mostly benign neglect. we consciously separate the essential from the nice-to-have: e.g., we like a decent yield of worm-free apples that taste great but may not look perfect, like those in the supermarket. we don’t spray when some work with a hoe will do. we try hard to avoid use of non-selective pesticides or herbicides with lots of side effects; we try to be very careful when we do. we try to minimize water use.

  • Report this Comment On June 19, 2014, at 2:38 PM, jmbring wrote:

    this piece should begin with a disclosure of the author's position of "Editor-in-Chief of SynBioBeta, an organization dedicated to nurturing stable growth for startups in the synthetic biology industry"

    to be fair, this is clearly written in the author bio. whether anyone bothers to read it is another matter.

    this piece is biased and misleading. repeated statement of “a loud minority” are an easy giveaway to a thinly-veiled lobbying effort. a few fallacies presented or suggested:

    -GMO labeling demands are tantamount to eliminating GMOs

    -GMO foods are conclusively, overwhelmingly evaluated as safe for humans, ethical for animals, safe for the environment, by entities with no conflicting interests.

    -GMO methods, intellectual property ownership, and other issues away from the actual food don’t cause any harm to consumers, directly or through the environment.

    -consumers want organic foods only for their own (admittedly, possibly perceived) health benefits.

    in truth, the issue of GMOs (and tangentially, organic foods) – and the public opinion of it - is nuanced and far more complicated than this article suggests, and the piece hurts the author’s credibility more than it helps. and that’s too bad, because feeding the world is indeed a big problem now, and very likely to become much worse. the author is correct (at the very least) in concern over organic yields, misunderstanding of organic benefits, and maximizing food production. we will have to use science to improve food production – in the end we will find there’s no debate there. the question is implementation. the author’s approach is heavy-handed and echoes of industrial interest ; i hope the consumer and his/her environment is the center of the debate and progress.

    and because i mentioned disclosure, here's mine: i believe the consumer has a right to know anything and everything concerning the origin of food. i believe in rigorous development and unbiased testing of any methods that improve food production, and promotion of methods that are conclusively safe for humans, ethical for animals, and sustainable for the environment. and finally, i believe when methods are monopolized, the consumer loses. i work for an aerospace giant that has no connection to food production.

  • Report this Comment On June 19, 2014, at 3:13 PM, DrySpell wrote:

    The problem with writing an article like this is that it can never be long enough to frame every facet of the argument in the appropriate light. Chatsko's sin is merely having been chained to the vernacular we use to address the U.S. Agriculture conversation. As part of that vernacular we think of all GMO's as being non-Organic which does not have to be the case.

    Among the people I know that attempt to eat only organic foods, those that have taken the time and brain power to flush out a list of reasons usually share some common ideals. They usually all want to minimize their ecological impact, right an economic wrong, and ensure better national nutrition habits.

    To me achieving these ideals does not mean limiting GMO's in fact it solidifies their necessity. It does however warrant rethinking how we make and use pesticides and fertilizers as well as eliminating mono culture to promote biodiversity. Both of which can be done while still planting crops that have been tinkered with genetically to guarantee maximum yields in favorable conditions.

    To answer the question the author never actually asked, cashing in on NO-GMO free can and will sustainable long term as long as Americans continue to see agriculture as a dichotomy with GMO crops and systemic oil-based pesticides and fertilizers on one side, and heirloom produce paired with classic manure on the other. I would proudly eat twice as many Chipotle burritos if i knew the cows were eating GMO corn twice the size of my head fertilized with worm castings and organic mushroom compost... Unfortunately grey seems like such a dumb color when everyone around you is either black or white.

  • Report this Comment On June 19, 2014, at 3:17 PM, TMFBlacknGold wrote:

    @DrySpell

    I wrote about the problems with using the blanket term "GMOs" in a prior post. As you are well aware, not all biotech crops exist to make their greedy pesticide-selling creators more money:

    http://www.fool.com/investing/general/2014/05/04/you-arent-a...

    Maxxwell

  • Report this Comment On June 19, 2014, at 3:48 PM, TMFBlacknGold wrote:

    @jmbring

    Thanks for your comment. I disclose my interests in my author bio (at the top of the article), my profile page, my Twitter account, and the disclosure at the bottom of the article. I cannot do much else!

    I think there's good reason to believe that the anti-GMO crowd is a large minority. Aside from other factors, every state that put GMO-labeling on the ballot is still without a labeling law.

    To your points:

    "GMO labeling demands are tantamount to eliminating GMOs"

    Never stated, but I do think that's largely true. If there's no health risk to eating ingredients from a biotech crop, then what's the point of labeling? It sends the wrong message to consumers -- and one based in fear -- that won't help the bioeconomy (which makes up 2.5% of American GDP).

    http://www.synthesis.cc/2014/01/the-us-bioeconomy-in-2012.ht...

    The "Right to Know" movement actually stole its name from an EPA movement on toxic chemicals. That's a noble cause. Knowing how your food was produced is not:

    http://www.fool.com/investing/general/2014/02/02/do-whole-fo...

    When groups want to ban GMO bananas that were funded by a nonprofit and address vitamin A deficiency for those living in poverty...

    https://twitter.com/FreeGMO/status/479258154044104705

    http://higherperspective.com/2014/06/genetically-modified-or...

    ...it's awfully difficult to believe they want anything other than a complete ban on biotech crops.

    "GMO foods are conclusively, overwhelmingly evaluated as safe for humans, ethical for animals, safe for the environment, by entities with no conflicting interests."

    If consumers cannot trust the institutions that exist for the sole purpose of protecting them and the environment (USDA, FDA, EPA), then I don't think anything I write is going to change that. Nothing can be called "safe", but risks can be minimized.

    "GMO methods, intellectual property ownership, and other issues away from the actual food don’t cause any harm to consumers, directly or through the environment."

    Can you back this up with unbiased facts?

    "consumers want organic foods only for their own (admittedly, possibly perceived) health benefits."

    I stated that as one reason that consumers want organic foods, not the only reason.

    Maxxwell

  • Report this Comment On June 19, 2014, at 3:50 PM, TMFBlacknGold wrote:

    ^

    *loud minority, not large minority

  • Report this Comment On June 19, 2014, at 4:50 PM, bacheller wrote:

    The issue is not simply about GMO-free foods. It's also about the poisons (pesticides) used in conventional crops that is more dangerous to human health. The USDA and the big corporate farm interests would like you to believe that a little bit of pesticide won't harm you but it's a damn lie. All the cancers and other stuff is making people sick and causing humans to live on pharmaceutical drugs to survive. What kind of civilization is this? Wealth at any costs is the new paradigm for unfettered wealth?

  • Report this Comment On June 19, 2014, at 4:58 PM, dreamimmigrant wrote:

    oh no...so these greenies are actually... *gasp* ANTI-SCIENE!

  • Report this Comment On June 19, 2014, at 4:58 PM, TMFBlacknGold wrote:

    @bacheller

    I'm not a huge fan of biotech crops that allow pesticide companies to sell more pesticides, but that's not what all biotech crops are about. If you want to ban those for a scientifically sound reason, then I'd support that. But we can't approach this without looking at biotech crops on a case-by-case basis. I wrote about this recently:

    http://www.fool.com/investing/general/2014/05/04/you-arent-a...

    It's also important to acknowledge that while some pesticides are toxic to humans, they're only toxic in the correct amounts. All food sold must be under the accepted levels of residue. Apples (and many other fruits/veggies) naturally produce toxic chemicals that could kill a human, but not in sufficient amounts to warrant concern on behalf of consumers.

    Maxxwell

  • Report this Comment On June 19, 2014, at 11:54 PM, mcampbell8 wrote:

    In general I support technology, but I am a little tepid when it comes to the things that we put in and on our bodies. The fact is technology and the impacts of some of these changes won’t be truly known for 1 or 2 generations. If the technology strings together chemicals and calls them food, or somehow processes the food in a way that destroys all of the nutritional value in the food, then I have some concerns. Unfortunately you can’t always rely on science to point out the issue since you can buy the position you want by funding their research. This is an inherent conflict of interest. Carcinogens are always bad and shouldn’t be allowed in our food supply even in trace amounts. Under the guise of protecting our food supply we are poisoning our bodies. Trace amounts of toxics haven’t really been studied so the long term negative impact on our health is a real concern.

    We need to be careful about the benefits of technology and consequences and impacts to our food supply as well as our environment.

  • Report this Comment On June 20, 2014, at 10:12 AM, TMFBlacknGold wrote:

    @mcampbell8

    Your comment is rife with generalities and misinformation!

    "If the technology strings together chemicals and calls them food, or somehow processes the food in a way that destroys all of the nutritional value in the food, then I have some concerns."

    I don't know of any technology like that!

    "Unfortunately you can’t always rely on science to point out the issue since you can buy the position you want by funding their research. This is an inherent conflict of interest."

    You cannot play the conspiracy card just because the scientific consensus disagrees with you.

    "Carcinogens are always bad and shouldn’t be allowed in our food supply even in trace amounts...Trace amounts of toxics haven’t really been studied so the long term negative impact on our health is a real concern."

    Okay, so we'll have to get rid of apples (0.6kg amygdalin/kg of seeds), pears (0.06 g formaldehyde/kg), potatoes (0.2 g solanin/kg)....The presence of a toxin doesn't make it lethal or "bad" or a health risk.

    Maxxwell

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