Regenerative agriculture goes beyond simply preserving, conserving or sustaining the land and soil it works with. As a farming system, regenerative agriculture enriches and improves the soil quality, captures carbon, increases biodiversity, improves watersheds and enhances ecosystem services. Regenerative agriculture practices can support both environmental and social objectives. For communities, regenerative agricultural practices can increase yields, and offer resilience against climate instability. Regenerative techniques aim to mimic nature, using planting techniques and animal grazing in combinations of ways to prevent the soil from being exposed, trap essential nutrients and minerals, and build organic matter.
These practices and outcomes can support both climate change mitigation and adaptation efforts, which is why a growing number of U.S.- based investment vehicles are incorporating regenerative agricultural practices into their investment strategies, according to Soil Wealth, a report written by the Croatan Institute, Delta Institute and Organic Agriculture Revitalization Strategy.
The report identifies at least 70 investment vehicles, accounting for USD 47.5 billion, that include some sort of regenerative agricultural features. The authors identify the current leading asset classes: real asset investments in land; private equity investment in companies that support regenerative agricultural value chains; and private debt investment in farms and firms. It would seem that investors are waking up to the potential financial gains alongside the environmental and social benefits. However, the report also highlights various opportunity areas including public and private equity markets.
While current investment levels are a strong start, the report estimates that a further USD 700 billion is needed over the next 30 years to realize the carbon sequestration and climate mitigation potential associated with regenerative agricultural practices. Enabling and unlocking this investment will require work in various areas and from a variety of stakeholders.
The report makes various recommendations to these ends. Overall, funders and lenders should integrate regenerative practices that enhance soil, health and ecosystem services into their lending terms and conditions. Work is also needed to develop an "ecosystem of accountability," to ensure impact measurement is robust and credible so that investments produce stated and desired outcomes. Further, blending private finance with philanthropic and governmental funding may extend the reach of current finance and provide valuable matching funds to leverage funds from public origins. Finally, decision-makers and policy officers should integrate regenerative agricultural considerations and criteria into finance programs and demand greater accountability for soil health improvements.