Investors need to better understand the impact of regenerative agriculture practices without expecting them to solve all their nature and climate ambitions, according to executives at a non-profit investor network.

While regenerative agriculture is “not a silver bullet”, it can offer a “very promising climate and nature-based solution” for tackling the environmental crisis, said Sajeev Mohankumar, senior technical specialist in climate and biodiversity at the FAIRR Initiative, a network aiming to help managing investment risk and opportunities in the global food sector.

The practice represents a “bit of a paradigm shift” from conventional agricultural practices, striving to hit both climate and nature goals, Mohankumar told Carbon Pulse.

‘Regenerative agriculture’ has no universally accepted definition – one of its challenges – but is associated with environmental outcomes like reducing greenhouse gas emissions and improving soil health, FAIRR said in a report last year.

The claims some companies are making around regenerative agriculture seem “a little bit disproportionate”, said Max Boucher, lead of the nature, biodiversity, and oceans workstream at FAIRR.

“When we speak to companies, and various actors in the sector, regenerative agriculture can really sound like it is the solution that’s going to solve 100% of Scope 3 emissions, and all our biodiversity problems,” he told Carbon Pulse.

“There’s a big gradient on regenerative agriculture. It can be very ‘dark green’, where you are probably edging towards rewilding, and then very ‘light green’, like a cover crop.” Cover crops are those that cover bare soil to improve its health.

For investors it can be hard to understand the potential for the impact of regenerative agriculture, he said. The data and disclosure around alternative ways of producing food need to improve, with many initiatives in their pilot stages, he said.

FAIRR is working across four pillars on the topic:

Source: FAIRR

NATURE TARGETS

Fast-approaching nature-related targets for 2030, such as nature positive by 2030, from companies will drive a lot more questions from investors on regenerative agricultural impact, Boucher said. “There’s definitely going to be a little bit more push, especially as we go into 2025.”

Fifty of 79 listed agrifood companies, with a combined annual revenue of more than $3 trillion, assessed by FAIRR have publicly discussed regenerative agriculture, the organisation said in a report last year.

However, only 36% of these firms have quantified targets for the practice, with the rest only providing a generic statement of intent, it said.

“It is difficult to understand how targets will be delivered, even for those companies with relatively comprehensive targets in place,” said the report.

This has stemmed from inconsistencies in communicating details on implementation, benefit allocation, and greenhushing, according to FAIRR.

BIODIVERSITY FOOTPRINTING

Biodiversity footprinting is one of the ways companies can better assess the impact of regenerative agriculture-labelled practices.

Assessing biodiversity footprints will be one of the key pieces of work for FAIRR over the next few months, overlaying available data with more traditional company analysis, Boucher said. The non-profit examined tools dedicated to assessing biodiversity-related metrics in a report covering six companies, published in January.

One of the big movements for regenerative agriculture this year will be improved indicators, with collaborative platform Regen10 updating its metric framework, Mohankumar said.

Promising nature-based solutions that can address both climate and nature risks are “underfunded”, another FAIRR report found earlier this month.

However, there were examples of investors acting on sustainable agriculture, including initiatives involving AXA, Unilever, and Banque Populaire Caisse d’Epargne, it said. These solutions included animal feed additives to improve digestion, cover crops, and integrating trees with pastures.

Agriculture accounts for about 75% of land-related biodiversity impacts, followed by forestry with 23%, a report by UN Environment Programme (UNEP) said this month.

By Thomas Cox – t.cox@carbon-pulse.com

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