I. The starting point
In the up-coming years, humankind is facing a huge challenge: the 17 Sustainable Development Goals (SDG). They represent the most ambitious “to-do list” ever seen to attain long term development, calling for collective efforts towards designing an inclusive, sustainable and resilient future for both people and planet. At this point, it is clear that economic growth, social inclusion and environmental protection are all essential for the well-being of societies. One of these goals is zero hunger (SDG 2). By 2030, among other targets, malnutrition and all forms of hunger are intended to be eradicated, thanks to the promotion of sustainable agriculture, farmers’ support and equal access to technology and land.
SDG 2 aims to end hunger, achieve food security and improved nutrition and promote sustainable agriculture. According to the UN’s Department of Economic and Social Affairs, the global pandemic is exacerbating world hunger. Worldwide, 70 to 161 million people are likely to have experienced hunger as a result of the COVID-19 crisis in 2020. Moreover, 2.37 billion people are without food or unable to eat a healthy balanced diet on a regular basis (Goal 2 | Department of Economic and Social Affairs, 2020).
The origin of this goal dates back to the year 2000. In September, at the United Nations Headquarters in New York, the world leaders came together to adopt the Millennium Declaration. They committed their nations to a new global partnership aimed at reducing extreme poverty. For this, they set out a series of time-bound targets, with a deadline of 2015, known as the Millennium Development Goals (United Nations Millennium Development Goals, 2000). From 2015 onward, these goals transformed into the Sustainable Development Goals, included in the 2030 Agenda. As the UN explains, “the food and agriculture sector offers key resolutions for development, and it is central for hunger and poverty eradication”.
Why is it important to eradicate hunger and what is the importance of nutrition? Pak Sudarno, in Indonesia, explained his challenge: physical work requires a certain amount of energy in the form of calories. Since he couldn’t work, he couldn’t earn enough money to eat. At the same time, since he couldn’t eat enough, he couldn’t work properly (Banerjee, 2013). This is known as a nutrition-based poverty trap.
Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty explains that “the basic idea of a nutrition-based poverty trap is that there exists a critical level of nutrition, above or below which dynamic forces push people either further down into poverty and hunger or further up into better-paying jobs and higher-calorie diets”. According to the author, “these virtuous or vicious cycles can also last over generations: early childhood under-nutrition can have long-term effects on adult success” (Banerjee, 2013). And it is not only the quantity of food, but also the quality.
With the aim of facing hunger, understood as a multilateral phenomenon, the UN has set 8 targets and 13 indicators for the SDG 2. Targets define specific goals, while indicators refer to the metrics “by which the world aims to track whether these targets are achieved” (Goal 2: Zero Hunger, 2021).
These eight targets, that can be considered as “sub-goals”, are (1) universal access to nutritious food, (2) end of all forms of malnutrition, (3) duplication of agricultural productivity and incomes of small-scale food producers, (4) insurance of sustainable food production systems, (5) maintenance of the genetic diversity of seeds and other species, (6) invest in rural infrastructure, agricultural research, technology and gene banks, (7) prevent agricultural trade restrictions, market distortions and export subsidies and (8) ensure stable food commodity markets and timely access to information. To tackle the progress, each target is linked to useful indicators such as the prevalence of undernourishment or food insecurity, childhood stunting, etc (view Exhibit 1).
Exhibit 1. Targets and indicators for SDG 2 – “End hunger, achieve food security and improved nutrition and promote sustainable agriculture”
|T-2.1||Universal access to safe and nutritious food
By 2030, end hunger and ensure universal access to nutritious and sufficient food
|2.1.1 Prevalence of undernourishment
2.1.2 Prevalence of food insecurity
|T-2.2||End all forms of malnutrition
By 2030, end all forms of malnutrition including achieving, by 2025, the internationally agreed targets on stunting and wasting in children under 5 years of age
|2.2.1 Prevalence of childhood stunting
2.2.2 Prevalence of childhood malnutrition (wasting or overweight)
|T-2.3||Double the productivity and incomes of small-scale food producers
By 2030, double the agricultural productivity and incomes of small-scale food producers
|2.3.1 Production per labour unit
2.3.2 Income of small-scale food producers
|T-2.4||Sustainable food production systems and implement resilient agricultural practices
By 2030, ensure sustainable food production systems and implement resilient agricultural practices that increase productivity and production
|2.4.1 Sustainable food production|
|T-5||Maintain the genetic diversity in food production
By 2020, maintain the genetic diversity of seeds, cultivated plants, farmed and domesticated animals
|2.5.1 Genetic resources in conservation facilities
2.5.2 Local breeds at risk of extinction
|T-2.A||Invest in rural infrastructure, agricultural research, technology and gene bank
Increase investment, including through enhanced international cooperation, in rural infrastructure, agricultural research and extension services, technology development and plant and livestock gene banks in order to enhance agricultural productive capacity in developing countries, in particular at least developed countries
|2.A.1 Agricultural orientation index
2.A.2 Official flows to agriculture
|T-2.B||Prevent agricultural trade restrictions, marker distortions and export subsidies
Correct and prevent trade restrictions and distortions in world agricultural markets, including through the parallel elimination of all forms of agricultural export subsidies and all export measures with equivalent effect, in accordance with the mandate of the Doha Development Round
|2.B.1 Agricultural export subsidies|
|T-2.C||Ensure stable food commodity markets and timely access to information
Adopt measures to ensure the proper functioning of food commodity markets and their derivatives and facilitate timely access to market information, including on food reserves, in order to help limit extreme food price volatility
|2.C.1 Food price anomalies|
Sources: SDG Tracker and globalreporting.org
Having understood the importance of this goal, it is crucial to call to action all the agents that intervene in the economy. According to recent research, “the organizational perspective is key in supporting SDG implementation and boosting the transformative capacity that underpins the 2030 Agenda” (Soberón et al., 2020). The 2030 Agenda aspires to be universal, so the action towards it should be universal too, involving participative processes and a coordinated effort from public organizations, private companies, NGOs, communities and households. In the words of Helle Thorning-Schmidt, CEO at Save the Children International, “the 2030 food and hunger targets can be reached, but only if governments, civil society and the private sector work together to drive proven solutions, and create accountability for results”.
Particularly, this reflection focuses on the role of businesses as an agent of change, acting as changemakers for common good. AIM2Flourish, a pioneer platform, is a higher-education curriculum that incorporates the UN SDGs and links them to inspiring stories, showing the power of “Business as an Agent of World Benefit”. As stated in their website, its mission is to “connect students with business innovators using Appreciative Inquiry to celebrate business innovations aligned with the UN Global Goals” (About AIM2Flourish, 2019). With the purpose of discovering how the SDG 2 is being tackled, we selected a series of business innovations aimed at generating systemic change to end hunger, achieve food security and improved nutrition and promote sustainable agriculture.
II. Uncovering the actions behind the stories: a descriptive and comparative approach
For the purpose of this report, sixteen different business innovations were analyzed and then compared. They all had one common element and narrative: the advancement of SDG 2. Although it is true that the business innovations addressed more than one of the UN’s 2030 Sustainable Development Goals, the research conducted only focuses on the second one, as narrowing it down would serve the comparability purpose better.
The starting point of the research was the following question: “What does it mean for a business to be flourishing?” Even though many different answers came about, a consensus centered around a flourishing business being an enterprise where the business has been around for a long time and will continue to do so in the future. The innovations compared fall under the “flourishing” category because they solve real problems that will be around for many years to come, affecting people, planet, profit, peace and partnerships (the “5 Ps”).
Their value proposition is fair, but the success of these companies will largely depend on whether their business models are socially, environmentally and economically sustainable over the long-run. In addition, it should be noted that some of the firms analyzed are juxtaposed to companies in the oil & gas industry, an industry that cannot be considered to be flourishing because its success and profitability, based on non renewable resources, have an expiration date.
The array of innovations proposed was as varied as it could be. The criteria used to decide which companies made it to the AIM2Flourish list were not clearly stated, but it is true that all of the firms presented were more than just businesses. From sustainable farming to increasing access to nutritious foods, the innovations tackled one or several problems and made a business out of solving it/them. What is most interesting, however, is that the problems being tackled are incredibly big. The common theme, as stated before, was that all of them attempted to advance the Sustainable Development Goal 2. Many believe that this SDG is simply about decreasing hunger through increasing accessibility to food. Nevertheless, this is just one part of it. As discussed in a previous section of this report, SDG 2 also covers increased food security, improved nutrition, and promoting sustainable agriculture. Some of the most interesting companies focused on the areas of sustainable agriculture, food nutrition, waste prevention, and food security -categories that were used to classify all the firms-. This classification is aligned with the United Nations’ definition of SDG 2. Moreover, they address “the interconnected relationships between a business and its customers, suppliers, employees, investors, communities and others who have a stake in the organization” (Stakeholder Theory, 2018). This is linked with the Stakeholder theory, which argues that the mission of a firm is to “create value for all the stakeholders involved, not not just shareholders”.
Most of the innovations analyzed fell under at least two different categories from the list previously provided. For instance, Solar Foods is a company that developed a way of producing a protein called “solein” with only CO2, H2O, and renewable energy. Upon creation, the protein eats up carbon and hydrogen from the air without creating additional greenhouse gasses. This protein is easy to make, in the sense that the inputs for its production are readily available in any region of the planet. Hence, the innovation is related to food security since it increases the ease with which people have access to protein. Moreover, as protein is a vital part of human nutrition, the category food nutrition is involved too.
Like most of the other companies, SolarFoods tackled a problem that is present everywhere on the planet, which means that, if marketed correctly, the business could last for decades to come. From a duration standpoint, SolarFoods could be considered to be a flourishing business (a later section of the report goes more in depth into the financial aspect of what it means for a business to be flourishing). The impact of this innovation is evident: increased access to protein despite location can be a game changer for both developed and developing nations (and this is related to many of the targets involved in SDG 2: 2.1. universal access to nutritious food, 2.2. end of all forms of malnutrition and 2.4. insurance of sustainable food production systems). A value proposition like this one, if implemented to a significant degree, could cause an impactful market distortion in the price for protein. Indeed, the price would decrease due to a positive supply shock, and consumers would have both an alternative to protein as well as a decrease in the price of their food. From a consumer stance, this can only be viewed as a positive outcome.
Exhibit 2. Innovation Classification and Weight Percentage
|Innovation Area||Weight (%)|
The table in Exhibit 2 provides a view of what the companies analyzed covered. The table was based on the 13 business innovations that were considered to be the most relevant. Originally, our sample contained 20 stories, but for the purpose of this report, 7 of those 20 innovations were excluded due to reasons such as closure or failure of the business, lack of comparability, or because of a lack of a business model behind the innovation. The table does not add up to 100% because there were some innovations that fell under more than one area. The largest category was sustainable agriculture, with companies such as a food dehydration company, named KinoSol; sandless aeroponic plant growing company, AeroFarms; eco-landscaping project making company, WaterFarmers; sandless hydroponic plant growing company, Letcetera; and gardening sharing company, Alfrea. A common and interesting newness among them is the use of hydroponics to yield plants without the need of soil. The impact of this innovation goes in the same line as the one discussed by SolarFoods, which is breaking geographical barriers. One of the main inhibitors of food access or nutrition is geography: if a country does not have access to quality soil to grow a certain type of food, then it will have to import that food from a different region.
The geographical aspect is something that many of the companies attempted to tackle. It does not matter whether it is waste prevention, sustainable agriculture, food nutrition, or food security: at least one innovation in each category focused on making a product or service that would expand the accessibility despite location. As discussed, under the food nutrition label, SolarFoods aims to increase accessibility to a protein by creating it through an easily replicable process. In sustainable agriculture, AeroFarms developed a way of leveraging aeroponics to grow plants without the use of soil. Infinited Fiber Company, a company that was labeled under the waste prevention category, developed a carbon neutral fiber regeneration technology that turns textile such as cardboard and agricultural waste into a cotton-like textile. Though a category for food security was included, all of the innovations are either directly or indirectly supporting access to food. Moreover, an increase in availability to food by breaking geographical barriers is the whole point of food security, so it can be argued that this is another theme that the innovations in the sample have in common.
III. On the way to making a nourishing impact: a critical reflection
While reading the stories and discussing them, it became clear that many people are involved in the success of the SDGs and, particularly, achieving zero hunger by 2030. The companies analyzed are oriented to many of the targets included in SDG 2: (1) universal access to nutritious food, (2) end of all forms of malnutrition, (3) duplication of agricultural productivity and incomes of small-scale food producers, (4) insurance of sustainable food production systems and (5) maintenance of the genetic diversity of seeds and other species. However, when taking a closer look at some of the innovations and products, we realized that there are underlying issues that dilute the benefit of the companies.
For instance, the company KinoSol provides farmers with dehydrators which allow them to dehydrate excess harvest. Thereby, food waste is combated and farmers are provided with a secure and nutritious source of food. Nevertheless, we questioned aspects like cost, financing and material. Farmers in developing countries are often very poor and have no savings. They often lack access to financing and a pricey dehydrator would be perceived as a luxury good which many farmers are unable to procure. In KinoSol’s online store a dehydrator can be bought for $140, which is a lot of money in the developing countries where the product is aimed to be implemented. In summary, while the idea targets food shortage and nutrition, it seems to have some practical flaws.
On the other hand, there are companies which have understood and given importance to the issue of financing and saving for low-income households. The organization Bancalimentos, based in rural areas of Colombia, provides communities with financial services in return for certain types of trash. Bancalimentos made the valid point that many people feel ashamed when going on a treasure hunt in the trash. Therefore, they designed places of trash exchange that convey the image of a bank. In the developing world and especially Sub-Saharan Africa many people dig through the trash in order to find food or other valuables that they can exchange. Providing these people with the same opportunities that Bancalimentos is providing communities with in Columbia could facilitate an increase in living standards for many people and especially a more stable source of food.
When discussing hydroponics, we discovered that several households already use this process. In Indonesia, for example, many families already grow their own fruits and vegetables in water. Letcetera is one of the companies using hydroponics on a large scale in India and has created a snowball effect in the country’s agritech sector. Although hydroponics is a known technique that has been used for over a decade already, Letcetera was considered an innovative business, since this is the first company that has brought hydroponics to India. Additionally, the organization wants to launch small home models. However, given that Indonesian households (and others all over the world) already use this mechanism on their own, we wonder if companies like Letcetera are only profit driven instead of really tackling the problem of hunger: what is the added value of selling a product that can easily be assembled by a household?
Despite the question whether innovations are being profit-driven or not, another link between these stories can be underlined. Nearly two thirds of the innovations were developed or invented in the developed world, while only one-third were born in developing countries. Moreover, half of the innovations from developed countries are based in the United States. This is in an imbalance with the regions most affected by hunger. The majority of the world’s undernourished people – 381 million – are still found in Asia closely followed by (Sub-Saharan) Africa (The State of Food Security and Nutrition in the World, 2020). However, only one company, Letcetera, is based in Asia (India). The other organizations from the developing world were located in South America. Thus, we wonder if “white saviorism” is at play (Kipling, 1889). While the developed world undoubtedly has the means and the time to search for solutions and innovations, it is unsolved whether these countries truly know and deeply understand what the suffering regions need in order to achieve zero hunger and food security.
The developed world is further in their development and is arguably responsible for a large amount of the world’s imbalance. While indulged with more favorable climatic conditions which massively impact and benefit agriculture and food production, they import exotic foods from around the world. In return the developed world ships their waste to the African continent and often exploits farmers impacting food security more than all else. Although the developed world realizes the harm they are causing and the conditions under which many are suffering, little in regards to working conditions seems to change. The stories and examples in question instead paint a picture in which the developed world tries to help by selling products and services in order to combat hunger. Doubtlessly, they are a step closer in the right direction, but shouldn’t we involve the recipients in the process? They probably have interesting insights, ideas and innovations. Encouraging the developing regions to be less reliant on innovations of the developed world could be a good way of creating a more sustainable systemic change, that lasts in the long term. This is related to SDG 17, which aims to foster partnerships. In the process, it is important to meet on equal grounds where every party can contribute and is not dependent on one or several other partners (who may have clear economic advantages).
As part of our analysis, a previous section of this report touched on what it meant for a business to be flourishing, excluding the financial dimension. However, this economic perspective is relevant, since no innovation can survive without a proper source of funding or a sustainable business model (see Exhibit 3). Regarding the stories, five had Venture Capital backing from some of the most renowned financial institutions in the world. One of the companies in the sample, AeroFarms, was going to be acquired by a Special Purpose Acquisition Company, or blank check listed company, that valued the firm at $1.2 billion. However, the deal was scrapped due to the uncertainties caused by the current pandemic. AeroFarms focuses on harvesting fresh products without the use of soil. Moreover, this industry had an estimated value of $1.4 trillion in 2019, and with a compound annual growth rate of 7%, it is expected to grow to $1.8 trillion by 2023 (Aerofarms Investor Presentation, 2021). This shows the potential size of the market that these innovations are involved in. In addition, VC funding or being a potential acquisition target may serve as a proxy to argue that many of the business models analyzed are financially viable and, therefore, sustainable. This aligns with the proposed definition of a flourishing business: a business that solves a problem that will be around for some time, while being financially sound.
Exhibit 3. Financial analysis of flourishing businesses.
|AeroFarms||In October 2021, AeroFarms was going to public and be listed in the NASDAQ through a SPAC. At the time, the deal was expected to raise $357mn in proceeds for the business, valuing it at 1.2bn
|Infinited Fiber Company||€44.6mn as of July 2021.
The last was a €30mn Series-B funding round led by H&M CO-LAB
|Solar Foods||$42mn as of April 2021.
The last was a €10mn debt financing round by the Finnish Climate fund
|Apeel Sciences||$640.1mn as of August 2021.
The last was a $250mn series E-funding round led by Temasek Holdings, Singapore;s sovereign wealth fund. This last funding round would value Apeel at $2 billion
|Olio||$53.1mn as of September 2021.
The last was a $43mn series-B funding round led by YNV Global
The example of the fresh produce industry serves to demonstrate that the businesses from the sample are in markets that will experience increasing growth over the upcoming years. It is not unreasonable to say that the same kind of growth might be observed in other companies from the funding sample. Olio is an app that connects individuals with others that have leftovers reducing food waste. Food consumption, and thus production, will only increase in the following decades, as population grows. Therefore, Olio is bound to succeed if correctly managed and marketed.
Apeel Sciences aims to reduce fruit and vegetable waste by implementing an edible, plant-derived compound that increases food’s shelf-life. This is another great example of potential success, given that retailers all around the world will be lining up to buy products that have Apeel’s stamp due to their durability. Moreover, the company stands for decreased costs since inventory will have to be replenished less frequently, consequently increasing the profit margin.
Thirdly, SolarFood’s potential for growth is pretty much limitless. As long as they can prove that their proteins are as good as any other. The ease with which solein is produced will not only become a viable substitute for current protein sources, but also a main source of protein in countries where it is rare. Finally, for Infinited Fiber Company the growing demand for eco-friendly and vegan fashion will only accelerate the top line growth. Moreover, though most of the business innovations are set to grow, an efficient and disciplined approach to capital allocation must be implemented in order for the businesses to truly “flourish.”
Exhibit 4. AeroFarms revenue growth projections
Source: AeroFarms Investor Presentation. Analysis conducted by JP Morgan Securities.
Even though companies such as AeroFarms are being valued at 300x revenue, the projected growth of the industry acts as a catalyst for the assumptions under which the revenue projections are based on.
Overall, it can be said that there is still a lot to be done in order to achieve zero hunger. Many have taken it upon themselves to lead the way and provide new innovations. It is clear that the world’s past and current behavior is unsustainable. Nevertheless, innovations need to be questioned and investigated to make sure that each one actually helps us move towards our common goal. Not everything that looks good on the surface is actually helping the people in need. When reflecting on our own contribution to zero hunger, we find it difficult to act. We all want to continue with recycling efforts and preventing food waste. Living in countries where hunger is mainly experienced when forgetting or ignoring to eat due to stress or a heavy schedule, we are unsure how to further contribute in a sustainable and impactful way. It is true that these stories have not only increased our awareness of this huge challenge, but also of the sensitivity that comes with it.
Nevertheless, we know that all help is needed and, therefore, we want to encourage everyone (including ourselves) to keep searching for solutions and ways in which we might help achieve zero hunger by 2030. We do not have much time left.
IV. Cross-cultural learning: key insights
Throughout this “How can Business Innovations Helps the SDGs: A Cross-Cultural Team” project, we are not just solitary learning about the Business Innovations and the SDGs themselves. Moreover, we have been able to learn how to work together with people that come from different countries: Indonesia, Germany, El Salvador and Spain. We encountered some obstacles along the path, but we resolved them and were able to get interesting insights and principles that will guide our future decisions. The most important aspect of the project was to enjoy our work and keep our spirits high for each of our weekly meetings.
As we all know, each person’s point of view is different depending on his background, where he lives and how he has grown up. When it comes to a cross-cultural project, every differentiation in perspective on how we saw the problems that we discuss, made the discussion more interesting and insightful. New information technologies and tools have allowed us to contact in an easy and intuitive way, even though we were working remotely. Without them, we would have been unable to know, connect at all or know and track what is going on in the world. It should be noted that, when focusing on SDGs, we discovered that they pose general and almost universal general challenges that affect with a worldwide reach, an aspect that facilitates their understanding despite coming from different cultures and mentalities. In this sense, everyone was able to contribute by adding different stories and insights that enabled us to look at the problems and innovations from different approaches. Moreover, we must confess that our group mates were amazing: by listening to them, we felt that we wanted to improve ourselves and give our best. The perspectives delivered by each of us were very interesting and insightful.
Although our Universities are based in Spain and Indonesia and our group members include both international and exchange students, we never experienced cultural misunderstandings. Instead, we valued the enriching views and conversations we had about the issues at hand. Since our group members were unequally distributed among the universities, we were exposed to the risk of making some groupmates feel excluded by discussing important aspects in person on campus. Thankfully, we were able to avoid this potential risk by taking care of the communication inside the group. The time-zone differences were our main problem when it came to our weekly meetings: coordinating the time of all our group members has been the toughest part, as many of us have other obligations and extracurricular activities. Fortunately, we were always able to find a gap in our schedule so that all the members were able to participate in the discussion.
The process of analyzing business models that orient their efforts to combat the problem of hunger has made us think about what hunger really is. Have we ever experienced real hunger? The answer… is no. The truth is that we are blessed to live in countries where we can find and purchase food easily and rather cheaply, thanks to our families and their purchasing power. This is exactly the problem that people struggle with in developing regions: food is not as abundant, and it is more expensive in relative terms. This project made us realize how lucky we are and how grateful we should be. In addition, we comprehended the multidimensionality of hunger, as a complex phenomenon. When talking about hunger, there are many aspects to consider. Hunger is not always about someone who cannot provide or buy the food, it’s also about what food or nutrition they provide within their body (for instance, the quality of the nutrients). This is why the solution is not to provide people with a portion of free or cheap food: the educational aspect should be taken into account too, in order to raise awareness about the importance of nutrients and a balanced diet.
During this five-week project, with the periodic meetings and deliverables, we were surprised about our organized and well-structured process right from the start. Of course, we had some problems, as some of our groupmates did not attend the meetings nor contribute to the assignments. But aside from that, we all had a high level of commitment to the project. Each meeting always started with a quick catch-up as an icebreaker, followed by a checking of our agenda for the day. That made our time together very productive and efficient, yet we still had the chance to exchange and discuss our ideas and stories.
In conclusion, we are all happy that we were able to participate in this unique project. We were able to make new friends from around the world and open our horizons and understand important problems that the world is currently facing, while making a very deep analysis into the roots of SDG 2.
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