158 Sara Scherr on how to work on landscape scale regeneration on 1000 landscapes for 1 billion people

After five years Dr Sara Scherr, agricultural and natural resource economist, President, CEO and founder of EcoAgriculture Partners, comes back on the podcast to share about 1000 landscapes for 1 Billion people and much more. 5 years ago in conversation with her, we talked for the first time ever about stranded assets in agriculture.  
---------------------------------------------------

Join our Gumroad community, discover the tiers and benefits on www.gumroad.com/investinginregenag. 

Support our work:

• Share it
• Give a 5-star rating
• Buy us a coffee… or a meal! www.Ko-fi.com/regenerativeagriculture

----------------------------------------------------

Why is landscape scale regeneration crucial to any investor interested in food and agriculture? What are the bottlenecks, the opportunities, and how do we build the fundamentally local institutions needed to put those billions, which have been committed to regeneration, biodiversity, regenerative agriculture/food, and rural development to work?

More about this episode on https://investinginregenerativeagriculture.com/sara-scherr-2.

Find our video course on https://investinginregenerativeagriculture.com/course.

----------------------------------------------------

For feedback, ideas, suggestions please contact us through Twitter @KoenvanSeijen, or get in touch through the website www.investinginregenerativeagriculture.com. 

Join our newsletter on www.eepurl.com/cxU33P. 

The above references an opinion and is for information and educational purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.

Transcript

SPEAKER_00: 0:00

Why is landscape scale regeneration so crucial to any investor interested in food and agriculture? Listen to and learn from the woman who has been working on landscape scale regeneration for over 20 years and currently heads the initiative 1000 Landscapes for 1 billion, that's a B of billion, people. So what are the bottlenecks, opportunities, and how do we build the fundamentally local institutions needed to put those billions, which have been committed to regeneration, biodiversity, regenerative food, rural development, sustainable infrastructure, to work? How do we overcome our innate trade-off reaction? A gain for you means, by definition, a loss for me. And how do we realize we are all in this boat together? If we like it or not, we are all part of a landscape which sustains us. And why is she so optimistic about the next decade? Tempering climate change, bringing back rivers, preventing floods, and obviously lots and lots of nutrient-dense food. The promises of Regina Eck often sound straight out of a science fiction book. And for these promises to be met, we need to significantly scale regeneration to a landscape scale within this decade. Welcome to a new series where we look into the technologies needed to bring regeneration to a landscape scale. In this series, we'll look at already existing technologies, digital tech, ag tech, new financing mechanisms, et cetera, that can scale fast enough during the next 10 years. Technologies which put significantly more money into the pockets of farmers, land owners, and land stewards who are regenerating their and our soils so they can go faster. And we'll ask the question, what is missing? What needs to be urgently developed over the next years? We're very happy with the support for this series by the Grantham Environmental Trust, which supports strategic communications and collaboration in solving the world's most pressing environmental problems. You can find out more at granthamfoundation.org. In March last year, we launched our membership community. Make it easy for fans to support our work. And so many of you have joined as a member. We've launched different types of benefits, exclusive content, Q&A webinars with former guests, ask me anything sessions, plus so much more to come in the future. For more information on the different tiers, benefits and how to become a member, check gumroad.com slash investing region egg or find the link below. Thank you. Welcome to another interview. Today, back on the show, we talked five years ago for the first time with Sarah Scheer, and it was the first time we ever mentioned stranded assets in agriculture. So Dr. Sarah Scheer is back, is an agriculture and natural resource economist and the president, CEO and founder of Eco Agriculture Partners and the chair of a thousand landscapes for one billion people. Sarah, welcome back.

SPEAKER_01: 2:40

It's wonderful to be here. It's great to see all the work you've been doing in the last five years.

SPEAKER_00: 2:45

Yeah, I mean, I would say it's great to be following Eco Agriculture Partners and you're celebrating your 20-year anniversary this year, you just mentioned in the pre-interview. And let's start with the question there. I mean, we can, of course, link the previous interview and let's spend maybe a minute or two of what Ecoagriculture Partners is now in 2022. Then we'll look a bit at 20 years ago and then we'll unpack some of the work you've been doing as of the last five years since the last time we talked. So what would you describe Ecoagriculture Partners in this 2022?

SPEAKER_01: 3:13

We're an international non-profit. We have staff from all over the world and we're And we see ourselves as a catalytic organization to promote the development and sustainability of integrated landscape management around the world. We're trying to bring together regenerative agricultural development with regenerative economies in a context of climate action, conservation of biodiversity and water. We see those as fundamentally integrated and interconnected and really see that we can achieve any one of those objectives only by bringing our resources and people together to work with them. So we do primarily work on research, on policy and technical support and assistance and advisory support for landscape partnerships.

SPEAKER_00: 4:03

And so when you say landscape partnerships, what should we imagine for the average listener, farmer, financier or everything in between? What's a landscape partnership?

SPEAKER_01: 4:14

Well, we think the landscape is a pretty large land area where all the people people who were in it, the farmers, the foresters, the townspeople, the consumers, all need to share the same natural resource base. And what we're finding is with growing populations, growing economies, there is growing competition and conflict among the different users within a landscape. In many, many landscapes, we're seeing processes of degradation of resources, which is affecting everyone, even where they didn't used to have a conflict with one another. And a landscape Landscape partnership is when those different actors in a landscape make the decision to come together and address this challenge of sustainable development jointly, rather than each in their own little silo. So they take many different forms. Some of them are very informal, these landscape partnerships. They meet once a year to see if they're aligned. Others are very organized and structured, have representative governance, et cetera. Usually local governments are involved. Private sector actors are involved. But the idea is to develop a platform by which these discussions can be held and negotiations can be held and common visions can be forged of where we want to be in 20 years, in 50 years, and what we're going to do now to make sure that our natural resource base and our economy is going to make this move forward in the directions we want.

SPEAKER_00: 5:40

And I mean, there must be so many differences, but take us back 20 years ago to when you started. What would you describe if you had to pick one? let's say two or three, what are the main, apart from that degradation has continued and probably worsened in many places and climate change has been hitting many of these places, but what have been the main differences or surprises you've seen in these 20 years or what is really fundamentally different compared to 2002? That's been a while. It's been a

SPEAKER_01: 6:07

while, yeah. World Summit on Sustainable Development is where we were formed in Johannesburg, South Africa. It is a remarkably different place to work than it was 20 years ago. We've formed Eco-Agriculture Partners because we had been working with both environmental groups, IUCN and other groups, and with the International Agricultural Research System, the CGIAR, to try to bridge the way they were addressing biodiversity. And really, 20 years ago was a period, people may not remember just how fraught with conflict the discourse was between agriculture and an environment, and very little support for farmers who wanted to do really take wild biodiversity seriously and very little support for conservation actors that wanted to embrace farmers as partners in the work that they were doing. And I would say that's changed enormously in the last 20 years. It's now, things are still fraught with conflict in many places, but I think the expectation of the need for the coexistence and to be mutually reinforcing in those sectors is very, very different than it was before. Part of that's the result of water scarcity is growing awareness of climate change etc but that's one really big difference is there's so much more interest and willingness and institutions working toward bridging those those those interests the second is there's just vastly more knowledge about how to do this there was nothing available for people were all reinventing the

SPEAKER_00: 7:37

world what do you mean when you say there's vastly more knowledge about this what is this like landscape regeneration at a landscape scale or even what I mean about how

SPEAKER_01: 7:45

do you work in a landscape and end up with a thriving agriculture and thriving biodiversity and adequate water and control of flooding? How do you make that happen in the same landscape? We had spent 150 years in science and technology and practice treating those as independent activities. How can we make the best food production? How can we manage water? How can we have protected areas for biodiversity? We had not figured out how to do these in a mutually engaged way. And I think we still don't have all the answers by any means, but there's a huge amount of knowledge and experience to build on now that we didn't have then. And I would say the third really big difference is that whereas I used to give talks 20 years ago and say, if you can solve your problems without doing integrated landscape management, by all means do it. It's kind of a pain in the neck to do because not everybody needs it. Those kinds of conflicts are not everywhere. And I've really changed my tune about that. because of climate change. We have so many pressures now on land users of all types, urban, rural, food, environment, because of climate change. And it's moving so rapidly that I actually feel now that almost every place needs to have a platform for resource users to collectively work out together how they're going to move forward in the context of climate change. So I think there's not a lot of places now that can avoid doing that kind of serious collaborative development

SPEAKER_00: 9:22

work almost like there are not many places left or many places where you can avoid not thinking in a landscape or forget that you're a part of one and so everybody if you're in a city if you're whatever you are part of a landscape you are part of a biome and you're part of a watershed even if it's extremely dry and you better start working on let's say future proving that because otherwise you could be and you probably will be in deep trouble but what I also heard very interestingly is that we have examples now we know how to do this or we at least and it's sort of I wouldn't say the story of abundance but the notion of this is actually possible to combine many of these things it's not that we have to choose only wildlife and no agriculture it's not that we have to choose only water flowing through the river and we cannot use it somewhere else like there's have you seen that that sort of shift because I think it's quite a fundamental human shift as well like There is actually, it is possible to certain degrees. I mean, we cannot make enormous hydro dams and then expect that there's a lot of water left. But within certain boundaries, it is actually possible to produce quite a lot of things, literally food, but also timber and fibers and water and many other things. Is that something that, is that difficult to get to? It's a very difficult question, but is it difficult to get to that sort of thought, like this is actually possible to do this at a scale without competing everyone and we're fighting for the last bit of barrel of water? Do we have to overcome something there as a species almost?

SPEAKER_01: 10:53

Things are grim. You can have a litany of how much degradation is going on and we have a tough road ahead of us. But when your starting point is to co-design the solutions among those different interests, you go to a very different place than when you say, well, this is the way I'm doing things. I want to continue doing them in this way. You're going to have to get out of my way. So I think we started off with an absolute trade-off mentality. I'm an economist by training. I was trained to think about trade-offs and only to think about trade-offs, honestly. And the idea that you could co-create new solutions by being aware of the needs of other groups. When I started, I was an agricultural economist. I worked in agriculture and I actually didn't understand what species, wild species needed to survive. And it turns out that there's a lot of things farmers can do that are relatively easy that dramatically improve the habitat quality of their land and the lands around them for many kinds of species. And they can do them easily. But because they were never co-creating those solutions with people who understood biodiversity, they didn't go in that direction. So I'm not saying we can solve all of our problems. And I think a lot of the challenges we have are how do we compensate people who lose where there are real trade-offs? But I'm never willing to accept a trade-off until people have spent quite a bit of time trying to co-create some responses to that because I am amazed at the creativity of people and about what new tools that are available to us now are making possible. We used to have to stop farmers from using all sorts of things because of pollution problems. We now can actually track where's the pollution coming from. And it's those farmers that need to particularly constrain their use of chemicals. That's on a technology point of view, the robust growth of agroforestry. And we're on the cusp of being able to have real strong regenerative economies with many agroforestry components and farming systems, which can dramatically change the footprint of agriculture in terms of watersheds and biodiversity, etc. So we're not where we need to be, but I see so much potential and so many examples on the ground where these are actually working. Not always working at the scale we would like, but working at a scale that you think, well, this could really lead to a landscape transformation.

SPEAKER_00: 13:16

And has that changed as well, that scale thing? that it's nice to do this farm and it's nice to do the neighbor and it's nice to do this wildlife area and this corridor, etc. But we actually should, if we want to move forward, we should move at a landscape scale forward. Has that dramatically shifted or are we still a bit underestimating the power of, let's say, a landscape approach? What would you say there compared to 20 years ago? Like the word landscape, of course, I'm in my bubble and I hear it often, but is that like the watershed thinking, like we're all in this together? Are we there yet? We're

SPEAKER_01: 13:51

not there everywhere. And there's many places that are even not familiar with the concept at all. But it's been embraced by a remarkably broad range of actors at the international level. An integrated landscape approach has been now formally endorsed by the Convention on Biological Diversity, the Convention to Combat Degradation, the UN Framework for Climate Change. It's been endorsed by the Sustainable Development development goals. It's been endorsed by UN Habitat. At an international level, the approach has been recognized as the way to go. The IPCC on climate change science has very strongly endorsed landscape approaches. They did that on the mitigation side five years ago. The report that they just came out now, it was one of the strongest endorsements in the latest IPCC report for adaptation. So I think you see the World Bank, you see the quite a number of countries. There's at least 12 or 15 countries that have pretty strong landscape programs within the countries. So I would say it's no longer a niche thing. It's no longer a small marginal thing, but it hasn't yet completely been endorsed because there's really quite a lot of institutional change that's required to work in that direction. So it involves institution building and discourse around institutional change to make it possible in the public sector, the private sector, community

SPEAKER_00: 15:17

groups, to work at that level. And what about the money side of things, the financiers, the investors, which, I mean, you come from the economic world. And how have those, if at all, those conversations shifted over the last five years, also since the last time we talked? Have you heard many more times stranded assets here and there in agriculture, but also over the last 20 years? Like what have the city, the city of London or whatever financial hub you're nearby, have they started to respond to this opportunity as well? Because if you're investing in real estate, genetic, which we talk about like 170 episodes now. And if you're investing in one farm or you're investing in a piece of land, if you're part of a landscape that goes sort of backwards in degradation, it's a huge risk. If you're part of a landscape that moves forward, it's a huge extra asset or risk reduction. Has that thinking started to filter through or I'm imagining there's still some work to do there?

SPEAKER_01: 16:11

Sure. Well, we had a very fascinating piece of work that we did. We can talk later about our 1,000 Landscape for 1 Billion People initiative. But one of the things that we did in the planning for that initiative was to interview about 75 financial experts, most of them from the private sector, who have already been involved in investing in landscape activities. And we asked them what was working well and what wasn't working well. That report will be out hopefully before the end of this year. And maybe we can chat about that again on the other thing. It

SPEAKER_00: 16:46

would be great.

SPEAKER_01: 16:47

What was quite Quite striking was the huge increase in interest and activity around landscape investing. You're still seeing it more among impact investors. You're seeing it among development banks. Those are probably the two big groups that have gotten pretty seriously into it. You also have a growing number of corporations, agribusiness corporations, that have gone in on being partners in landscape partnerships and are adjusting the kind of financing mechanisms they're using to facilitate landscape development as well. But I would say it's primarily impact investors and national development, as well as public sector actors that are coming in to co-finance, to do risk reduction for private investments. So we got a huge number of funds and investment programs, facilities that were being set up, special financing mechanisms for farmers within landscapes or for protected areas within landscapes that are coming up. So compared to five years ago, it's really blossomed. Having said that, though, for the most part, most of it is still not very landscapy.

SPEAKER_00: 18:05

You're doing quote unquote on the video, but what do you mean by it's missing the landscape edge or missing the landscapy

SPEAKER_01: 18:12

attributes? You have probably a couple of different entry points that have come in for landscape finance. Some of them came in through supply chain work, a lot of effort around trying to achieve zero deforestation targets. And so clustering a set of investments with the foresters, with the farmers, with the agribusiness, all the local governments around getting that done. You have another set of investments that have been around disaster risk reduction, trying to control for flooding. and other kinds of just extreme climate risks that are happening. You're seeing a series of them that are going around that. And you'll get a cluster of landscapes. But when we think of integrated landscape management, it really is stepping back and saying, what does this economy look like in this landscape? Is this economy operating in a way that it's going to lead to regeneration? Or is the economy operating in a way that it's not? Which means that the interconnection between different investments and between public, private, and philanthropic investments is really important when you're thinking about regenerative landscapes. They need to align with one another and they need to mutually support one another. What we're finding is places where they've managed to get hundreds of millions of dollars into a landscape for regeneration of agriculture and forests. And in the same landscape, there's$5 billion worth of highly degrading investing that's going on. So you need to have a sort of a multi-sector multi-project, long-term investment portfolio that's being financed. And we did a study in 2020 with a number of partners to look at how many examples do we have of financial mechanisms that actually operate at that landscape scale. And let me back up for a second. The reality is that the world's financial system works on projects. They look for the best project they can find and they can look for one fantastic, sustainable, coffee project and it could be in a sea of other things and they don't care they just want to make sure that their project is working and that's a very useful thing it's a critical part of the finance system but it's absolutely not enough we need to develop what we call landscape investment portfolios which is from all the different sectors from all the different actors spatially coordinated that will get you to a place where you do restore the river that's being that's disappeared where you actually control flooding with a healthy watershed where you actually have healthy populations of wild species that can connect between protected areas. So you need to have many different actors in the landscape. The infrastructure, the human settlements need to be aligned with the vision that you have for landscape regeneration. And that means the flows of finance need to be aligned. So this study was really very interesting because we found two clusters of ways that was happening. One of the clusters was financial support services. These would be people who would put that portfolio together by acting. And sometimes it was a landscape partnership. Not very often. They usually don't have the expertise. Sometimes it was nonprofit actors that came in to do kind of bilateral, facilitate bilateral deals with different financial institutions and different projects and businesses. And sometimes they're starting even to be for-profit services that are putting out. They're saying, we can help you mobilize financing that will lead to this regenerative landscape And they work with different financial institutions and different businesses. But we also found about 25 examples where there were new funds or multi-landscape funds or bonds or donor collaboratives, a couple of other things like that, that actually were structured to finance multiple projects in multiple sectors, place-based. Wow. And they're not very developed. There aren't a lot of them, but we find this really fascinating and are trying to learn more and promote more about

SPEAKER_00: 22:22

this. Was there like appetite for that from the investor side of things? Because I'm imagining it would be interesting because you might also invest in like a real estate portfolio with different risk type, different places, different, let's say, different levels of maintenance that needed different fanziness and all of that. But we're very used to that because it sort of fits in our financial system. Like for these newer types, of course, it's still a early stage, what was the response? I don't know if you asked that as well in this research. What was the response from the financial world? Are they eager or is it a bit messy to have these different things? Oh, okay, they're in one landscape, but they're a bit different in that same portfolio.

SPEAKER_01: 23:02

Well, I think when we talk to the financial, we talk to people who were the frontline innovators. They're the ones who are willing to take the risk to try these new kinds of approaches. And what we came out of there from those interviews that I was mentioning before was they were quite bullish They really felt this was the direction things were going to go. But they then had a litany of things that were constraining that growth. And I think what you're finding is it's still a niche. It's, what would you call it, kind of a boutique thing because the system is not set up for it. The people involved have to do all sorts of unusual work to make it happen. And you have very unusual kind of partnerships to pull them together. So I think we're not at a place now where this is going to scale up. But one of the things we're trying to do right now with A Thousand Landscapes is to work with financial institutions to build this. And what we're perceiving is that for probably at least the next 10 years, you're going to have to have partners in those efforts that are either very long-term impact investors that don't care about, you need at least some philanthropic, catalytic philanthropic partners in there, government partners, and multiple private sector partners. providing the funding sources for these larger scale efforts. I think they need that partly because of true risks, partly because of perceived risks, and partly because we're still working out the mechanisms for trying to do this. So there's many issues around strong enough financial institutions at the local level that can disaggregate funds that come in in bulk and getting them to smallholder farmers, that kind of thing. So we definitely have models for that. But if you haven't built those institutions, you've got to build the institutions before you're going to be able to work that out. But you're definitely seeing an interest that, you know, banks, there's some new, big new private sector funds. You know, HSBC has their new billion dollar fund for biotech. And I think you're really seeing funding coming in. But it's going to be blended funding. And it's going to be, I would argue, they would, if I were an investor, I would go to a place where there was a robust landscape partnership already established, where for the last five or 10 years, they had really looked at what was happening in that landscape. They understood where the financial flows were. They knew where they wanted to go in terms of regeneration. They'd worked on some of the tenure issues. They'd worked on some of those other enabling environment for investments. That's where I would go if I was a private sector investment investor. I would not go to a random project in a place that didn't have a pretty strong cross-sector support for the kind of work I was doing. doing, because I think you'll greatly reduce your risk greatly. There's a lot of opportunities for enhancing your profits from doing that.

SPEAKER_00: 25:54

It's actually a great bridge. And then we're going to unpack the thousand landscapes because we mentioned it a couple of times, but a question I always like to ask, let's say you are in charge of a billion dollars or even 10, like a large, very large portfolio that you have to put to work tomorrow morning. And the timeframe can be very long, but it is definitely an investment portfolio and not a grand portfolio. Where would you focus? Is it more the Trump? I mean, I'm asking this question, not because I want to know the exact dollar amount, but I'm curious about people where they would focus their attention. Is it the tropics? Is it agroforestry, which you mentioned? Is it technology? Is it satellite imagery, which is also tech? Is it setting up a specific bank to do this, issuing green bonds, whatever? I mean, you can come up with anything. Where would you start putting this money to work if you had a considerable portfolio to play with?

SPEAKER_01: 26:39

I'm assuming this is a person who wants to deliver impact as well as returns,

SPEAKER_00: 26:44

right? Absolutely.

SPEAKER_01: 26:45

I wouldn't do it that way. I would I would pick five landscapes in the world that were important for me or important for people that I wanted to influence and benefit. And I would recognize that you need more than commercial funding to generate the kinds of returns and the long-term returns that you're looking for. And therefore, I would be place-based in my investing. I would find partners in there with the government, from business actors, etc. And I would recognize that either I or some of my partners needed to get a couple of things done well before I started the funds really flowing. And one of them is these really strong landscape partnerships that have done their homework. They've done the landscape assessments. They've figured out where they need to go. They've figured out where the vulnerabilities they are. And they've put together at least a rough landscape investment portfolio there of what needs to be done. And then I I can pick in the short term, which of those seem most robust. And I think this is the real weakness of most of these landscape partnerships. They have good action plans often, and they have good visions of where they wanna go, and they're grounded, but they haven't turned them into investable projects and investable businesses. And so that's one of the major areas that needs to happen. But they need to be done with those projects and investments being done in the context of where the larger landscape is going and in the context of potential synergies with other investments in the landscape. So for example, if you want to come as a private investor and invest in fisheries, you need somebody else to invest in the landscape to be investing in water quality. And if they're both happening at the same time, your productivity is going to be much higher and your risk is going to be much lower than if you just go in and do a fisheries project. So I would argue that investors need to be willing to put some funds into supporting the landscape partnership and into doing some of the research, contributing to some of the research that's needed to make sure that the agricultural practices or the industrial practices or whatever actually are contributing to the landscape regeneration? Or can they be improved and made much more productive, much more profitable? I think we need to look at the actual production systems. Can we make that agroforestry system generate higher quality products that can be used in a We know that we need diversified landscapes to be stable. We know that. And to deal with all these different products. Right now, agriculture investment and research has focused on a tiny fraction of those ones, and primarily for monoculture production systems. And so if we're shifting to diversified production systems, farmers are going to need some support to make those changes. It's a totally legitimate thing. I never demonize farmers who are struggling with the transition costs and risks associated with moving toward regenerative agriculture, even though on the long term, it's much lower risk for them. But in the short term, it's not necessarily. So I think supporting that kind of development process and particularly supporting new market development processes, because if you want a more diversified landscape, if you want to be investing in the full portfolio of long term opportunities in a landscape, we need to be refining some of those markets. You've got to refine the processing. We've got to set up the pay months for ecosystem services and have robust institutions for implementing them. So there's a lot of market development work when we're talking about a regenerative economy. It's building new relationships between those restaurant owners and the producers of regenerative agriculture. Those are institutional changes and market changes that need to be invested in. And obviously, public sector can do some of that investment, but the private sector plays a critical role in it. So I think there's that cluster of things, and then there needs to be a willingness by the investor or, again, by one of their partners to come in and incubate those projects and businesses so they're ready for infusions of significant capital. And so who's going to do that incubation? A lot of the companies are finding in the end that they need to do it themselves or they build partnerships with nonprofits or partnerships with governments to do that incubation so that when they're ready to deploy their capital, it's into something that is really going to generate returns. So I would say if I had a billionaire dollars. And I actually think you need any one landscape needs billions of dollars of investment potentially, but it shouldn't all come from one group, right? But let's say, I would say that I would keep 30% of my money in the first 10 years of a 40 year time horizon. I'd keep the first 10 years and those things I was mentioning before about the institutional work, the market development, the incubation, and then you really will have a diverse, potential diverse portfolio to invest in. And we will be able to crowd in and from other places that could really lead to transformation at a landscape scale. But if you're going in and you're just going to cherry pick a project here and cherry pick a project there, that's great. That's a wonderful thing to do, but it's not going to lead to regenerative landscapes.

SPEAKER_00: 32:01

So it's really, again, also taking as an investor, the landscape approach and sticking it with it, with a landscape in the long run and knowing that even if you have a billion or two billion, like any landscape is going to need many more. And so they're There's always that partnership approach, but also how are you going to attract, how are you going to make it investable for others, how are you going to reduce the risk, how are you going to actually attach it to the fire hose of the financial system, which is quite strong, but it requires massive projects. There are investors that don't even look at things simply because due diligence costs are too high. Anything under even half a billion is just considered way too small if you talk about infrastructure.

SPEAKER_01: 32:42

Right. And I think for me, that's why I am so excited about the development of these innovation large-scale funding mechanisms where the funding can absorb a billion dollars into a landscape. But there is an institutional process for disaggregating the money and dispersing the funds to a set of pre-screened investments within the landscape with institutions that have been supported to be adequate from a fiduciary point of view. I really think that that's going to be a very

SPEAKER_00: 33:12

important... Infrastructure, basically. It's the pipelines. How do we get it from the fire hose to the drip irrigation almost.

SPEAKER_01: 33:18

Right. And that's the scale of funding that's needed. So that's what we should be looking for. But I think this issue about how do we build the financial institutions within the landscapes that are capable of working with us, and it requires public, private, philanthropic partnerships. Everyone doesn't have to do all of these roles. But I think figuring out what the strategy is for it, I think is going to be, it's when we talk about the transition to a low carbon economy When we talk about the transition to a nature-positive economy, that's what we're talking about. We're not talking about just putting some money in some places for an existing short-term project. But I think we have a lot of mechanisms for absorbing risk. And I also think it's really important to remember that a lot of the funding, when we talk about the billions needed, is actually already flowing to the landscape, but it's flowing to things that are degrading rather than regenerating. And so huge potential for impact affecting the design of infrastructure investments huge potential for designing you know the agribusiness investments that are going in with the same money that they have but with some support from a coalition of people that are that want to want to help them not punish them but

SPEAKER_00: 34:31

help them make that transition it's fascinating the lever you describe the local financial institutions the banks but also others that are going to play a crucial role to absorb all this money and put it to work and do that last mile distribution almost and are probably not not ready yet for that kind of push and probably you don't want to push that much money through a very like you don't want to push too much water through a drip irrigation system as well if it's not not set up to absorb that kind of pressure so the crucial institutional work there or the building there is is absolutely fundamental to make sure that the flow of capital can flow and is is able to be processed to get to the end the smell of the farmer to get to the farm to get to the agribusiness to get to the solar park to get etc etc etc and get back when the flow of cash flow comes comes again. And that's an interesting observation. What do you see the role of technology there? And then I promise we go through a thousand landscapes. What do you see as the role of technology there as we see, especially in finance technology starting to take off and the DeFi movement? There's a lot that we couldn't do, we can do now and we couldn't do five years ago. And there's even more that we couldn't do 20 years ago. What do you see there happening? Is there experimentation on landscape levels around that financial mechanism, maybe even disrupting this institutions we just talked about.

SPEAKER_01: 35:48

Yeah. No, I think there's actually a lot of innovation that's going on right now. I would say that there's more going, there's financial innovation towards sort of sustainable projects is still what most of that financial innovation is. But there is some very interesting financial innovation going on at the landscape level. And of course, just reducing the transaction costs of financial flows is going to be huge for any kind of environment. Having better mechanisms for monitoring and impacts that will make it easier for finance But I think there's also starting to, you know, we're working with our partners on trying to develop IT facilitated kind of matchmaking, if you would, at least doing the first early screen of investments. So if you can find all the landscape partnerships that have got their investment portfolios, and they've got out of 50 landscapes, there's 20, you know, good screen coffee projects, finding people who would want to invest in coffee and connecting them with those financiers. You know, I don't think you can do that. do it. I don't think you just have to do your due diligence. You have to do all of those other things. But I think some of the search costs for national and international funding can definitely be facilitated.

SPEAKER_00: 36:56

And especially if you're, let's say, I mean, it's not ideal because you go into one crop, but you also start learning. And if you want to do an X amount of coffee investment or X amount of, let's say, tropical cash crop investment, it helps if you do multiple because you're learning capacity of what you need to look for and you can repeat a lot of things. I mean, a lot of these things are relatively, we're talking about Dan Miller, which should be out of Stuart, which should be out when this is out as well. And they were talking about local processing, very different sector for meat in the US. And they said, yeah, we're going to do a few, but then we're going to repeat because of course they're all different. But once you've done a few, you start also recognizing the good ones or you start recognizing, okay, this needs another consultant for a bit of the design. This needs, okay, how do we attract some more grant funding on this? But the rhythm or the US needs, I don't know how many local processing for for beef and other meat products. So you can repeat that probably a thousand times and in different shapes and forms. And you're going to see that in coffee. You're going to see that in water treatment. You're going to see that many of these things look similar at some point once you've seen enough.

SPEAKER_01: 37:59

And I think that's the way to think about landscape finance at this point in time. It's where sustainable energy was 30, 40 years ago. And now in solar energy or whatever, we have a lot of sophistication and people know which tool to use where and which finance financing works with what, and there's an insurance system. We are in the process of building a landscape finance system, and that is the way we should look at it. So I think philanthropic actors need to be thinking about how they've got the capacity to take the greatest risk in some ways to, you know, how can they help to build that finance infrastructure for landscapes? How can governments play a role? We're actually finding right now that we're spending a lot of time with sort of developing Bank groups, those kinds of organizations that are very commercial in their focus, but have the capacity to take some more risk and to do institution building. And I think those groups are going to play a really critical role in the transition over the next 10 years in order to attract more private capital in. But I think you do have an appetite from quite a few, a lot of private investors, if you could basically be certain you would be able to deliver the impacts that they're looking for. and either get the same returns or take some hit on returns if you can guarantee impacts. But I think we need to think a bit about it, that we're building a new infrastructure in finance. And that's got to have a solid basis in terms of the development of businesses and programs on the ground and infrastructure, et cetera, that contribute to landscape finance. And as you say, I think within the next 10 years, we're going to have very standard ways of going about doing it. a lot of these things. We're going to have a standard way of giving grants to landscape partnerships. We're going to have a standard way of having cross-sectoral government agency investment. We're going to have standard ways of having multi-sector business investments and marketing. Those, I think, are going to come in place, but we have to be intentional about it and we need to look at what the roles of different actors in the financial system are in pulling that together, which it means that the grant folks need to talk to the equity folks and they need to talk to the government folks and we need to find some way that people can collaborate together in building this system.

SPEAKER_00: 40:20

And so let's get to the 1,000 landscapes for 1 billion people. You're also the chair there. How would you describe that process? I will obviously put the link in the show notes below. But how would you describe that initiative?

SPEAKER_01: 40:34

We talked about where things were 20 years ago. Well, in the last 20 years, there has been a huge development of these landscape partnerships. Back in 2015, 2017, We documented about 450 of them in different continents of the world. And that was just a portion of them. And they've just exploded since then. And it's actually really exciting to see how much many of them have done. They've organized themselves. They've got their strategy. They've got their action plan. They're starting to do work. And even the ones that are super well organized just can't. They're just not reaching their goals. You know, they've got these ambitions and they're able to implement them. And why is that? It's because their work is not recognized and not supported by other investment programs that are going on, not recognized in national policies and flows of funds. It's because they can't get financing for that investment portfolio. They either don't know how to get it very well, they don't have the skills, or the financial institutions are not structured to be able to provide the financing in the way they need. And thirdly, they can't get access to support in terms of how to do the work well and expertise and data and facilitation, et cetera. So we stepped back and we said, at this rate, they're doing great work, but it's not going to get us to where we need to be. We're not going to get to 1.5 degrees in carbon. We're not going to get to conserved biodiversity. We're not going to get food security at the rate at which this is happening. And so 1,000 landscapes for 1 billion people was set up in 2019 as a, we call it a radical collaboration, because the idea is it's going to be a network of hundreds of organizations eventually across the world who all have the shared vision of locally led multi-sector landscape partnerships that are going after ecological benefits, human societal benefits, and economic benefits within the landscapes. And these groups, we've started off with a core group of seven, Eco-Agriculture Partners and Rainforest Alliance are the co-conveners of the initiative. And we also are working with with a landscape developer, Commonland, with the United Nations Development Program, with the Environmental NGO Conservation International, with the Landscape Finance Lab, and with, let's see, is that seven? I think that maybe should be seven of us. And then we have another couple dozen of other partners that are working with us already. And we're working now with almost 20 landscapes where we're in a process of trying to synthesize the knowledge base that we have, pull together whatever we know, the things we don't know, start developing it. And we're working to come up with a set of tools and services that will be available to any landscape anywhere in the world, any landscape partnership anywhere in the world. And we're working on four specific areas. One of them is the one we just mentioned on information technology. And we are, oh, Tech Matters is the seventh partner. There are Silicon Valley-based nonprofit tech experts who are working with us to develop a platform of open access, open source software that's specifically designed for the needs of landscape partnerships for their organization, for their landscape assessments, for their monitoring, for the development of their investment portfolios and action plans, et cetera. And so that's under development right now. The second component of it is learning and capacity development. Right now, if you don't have access to a UN agency or an international NGO or a very small special short-term project of the government, you can't get training on how to do this work. You can't get technical support. You can't get data. So we're trying to build an infrastructure for capacity building and ongoing support, technical support, that would come a part of it through the internet, a part of it through Terrasso, this digital platform, a part of it through a network of landscape partnership networks, which are proliferating around the world, where they're trying to support one another, and also through direct direct training and advisory services. The third component is to work on landscape finance solutions, both in terms of supporting landscape partnerships to convert their action plans to investable projects and business deals and then help them connect with financial institutions that have made a commitment to supporting landscape investing. And then the fourth area is to support communities of practice that are building around landscape partnerships so that the leaders of these initiatives and the financial actors and others can connect up with other people who can help them with their challenges, with their markets, with their financing, with their knowledge. So that's what we're doing right now. We're in a design, testing and demonstration phase, and we expect to be working with 50 landscapes by the end of 2023. And by 2030, we are hoping that this network of radical collaborators will be connecting with at least a thousand landscape initiatives globally. So it's a very, very fun and very exciting initiative

SPEAKER_00: 45:47

and what seems to be I mean there must be multiple but like the biggest bottleneck like if there's I ask this question differently sometimes as a or often as a magic wand question if you could take if you could change one thing but I usually ask it very openly could be global consciousness better taste could be the better no subsidies or better subsidy schemes etc but in this case I want to ask it specifically like in this landscape space and in this landscape regeneration space what's the biggest bottleneck what would you take away with your magic wand if you could? If not what I

SPEAKER_01: 46:19

would take away, it's what I would give. What do you change? What I change? Recognition by powerful actors in government, business, and finance that they need to support these landscape partnerships and that they're serious about investing in them as long-term institutional mechanisms to address regeneration and sustainable development. So I would say that's the number one piece because when they start to do that we see that you can get huge impacts and benefits

SPEAKER_00: 46:52

quite quickly in these why they don't see that yet what is needed to make them it's very easy them always but them see that like do we need to bring them out of their ivory towers into the landscape do we need to force them to watch certain documentaries what is needed for people to see their potential or the potential in a landscape and their potential? I

SPEAKER_01: 47:16

think there's sort of three aspects to it. One is they don't have what we call landscape literacy. They know their piece of the landscape, but they don't know how it interconnects with others. That's changing a lot. I think the younger generation that I work with now, they are learning about that when they go to college. They've got a lot of that. I think it's more my generation maybe that still has such a silo.

SPEAKER_00: 47:44

Landscape literacy, I I like

SPEAKER_01: 47:47

the term. of this plan, it must mean that I'm going to lose something. And it's a lack of trust and experience with the power of collaborative design. And so I think the problem with collaborative design is no one believes it until they do it. And then they're like, oh my gosh, how do we get that solution? You know, probably diplomats know more about this. They've got to figure out a solution that gets everybody to yes. And so those are skills that people don't have. And there are also fears that they have that they're going to lose. So the third is it seems so messy. People are fearful of what they see as a complex process with a lot of different actors. And it is. It is, however, the least complex way of addressing these simultaneous challenges. And I think that's what they don't get about it. It is complicated, but it's not nearly as complicated as having all of those actors continue for the next 20 years to degrade that landscape in a way that everybody is going to suffer. So they're not comparing the costs of collaborative action with the risks of not taking collaborative action, I think. So I would say that those are the principal things that in terms of people's mental models, they need to

SPEAKER_00: 49:35

shift. It's very interesting that that's your magic wand answer. And it seems very doable. I mean, it's a huge shift, obviously, from trade-off mentality to potentially abundance or at least it's not my your gain is my loss by definition um but you can you can experience that and i think those shifts are partly generational maybe partly educational partly experience and and all of that and what would you tell i mean i asked this question what would you tell smart investors obviously and not as a as as investment advice but in in the landscape sector now where would you if we would do this in the theater and the room is full of people and somebody asked the question okay i walk out of this theater where should I go? What should I do? Where should I start digging a bit deeper? Where should I start interacting? Is it really my own landscape that I should really get to know personally well if I live somewhere and I have deep roots? Where should I start if I'm an investor and I want to get active in the regeneration landscape space?

SPEAKER_01: 50:33

I think it's ideal to go to a landscape that you really care about. So I was fascinated when I said we did this review of models at these initiatives where you had these investor collaboratives and it was just a bunch of people who kind of did care about their landscape and they wanted to make it more food secure and they wanted to care for the biodiversity. And they would meet on a regular basis and exchange ideas about investment projects. And together they had a really great vision and view of what was going on in that landscape because they came from different sectors. So I think that it is valuable if you're an investor of your own money to go to a landscape that you care about and that you think about having a commitment to that landscape over the next couple of decades. Landscape change takes 20 years at a minimum. Some people say 50 years, 100 years. But I think at least you need to think of it as multi-generational, which means you don't have to do everything in it. You need to find where the pieces are that resonate with you, that you have the skills and talents and resources and expertise and business networks, et cetera, to make your piece work there. But it's a question of placing your investment within this larger context and then seeking out partners who can reduce your risks, reduce your costs, co-invest with you, provide complementary investments that are going to enhance your business, finding new markets there, finding new sources of finance within the landscape that could support the work that you're doing. So that's what I would recommend to people who care about landscape regeneration, that they should think about it that way as how can they be the most contributing actor within a strategy that's going to keep that landscape viable. And I ideally even regenerate the economy and have better jobs for people, etc. So that's what I would say. And I would say, be creative. Come up with a new financing plan. And if you've got a good financing plan, you can talk to the local banker about that new financing plan. And if the banker doesn't want to do it, you can go talk to those other 20 business people you've been working with on landscape stuff. And you all go to the bank and say, we need a new line of credit. Give us something different. And if If you come collaboratively and you bring in your other partners and they're all there, the bank will change. They'll start a new line of credit. So,

SPEAKER_00: 52:52

yeah. I'm thinking when you're talking, do we need to tell this story better? Like I know we sort of hit a nerve in, this is a whole different rabbit hole, but a nerve with like, let's say an individual farm conversion or farm transition or farm evolution with The Biggest Little Farm, obviously Kiss the Ground. We have a number of very inspiring books, but but it's always about one farm and it's never about a landscape. Did I miss those? Like, are they there? And I just didn't see them. Are we making them at the moment? Should we be making them? Like how we're going to hit that same nerve of, because I know people that saw those and were like, I need to start a farm tomorrow without any farming experience. And I don't know if they did. And maybe I hope not. But it hit a nerve with us that we, that is really, really powerful. The same on Zach Bush's work around glyphosate, et cetera. Like we're hitting nerves with storytelling and media how do we do the same with with a landscape approach which doesn't sound really sexy

SPEAKER_01: 53:49

so storytelling is actually one of the central things we're trying to promote with 1000 landscape for 1 billion people we're trying to work with landscape partnerships to tell their own stories if provide them with media support or with you know technical support on how to do storytelling and journalism as distinct from analytical reports and donor reports etc like that so i think there's a really important storytelling aspect to this there's also another another piece to it which when we talk about these four big benefits from doing integrated landscape management we talk about the ecological benefits we talk about the social benefits we talk about the economic benefits but we also talk about the inspirational benefits to collective action people love the places they live not everybody but there's usually a large number of people that have a very strong connection to the place where they live and these landscape partnerships typically work the best where the tap into that. And they bring in the arts and they bring in music and they bring in dance. They bring in storytelling. They bring in the elders to talk to people about how that landscape was when they were young. Bringing the cultural and emotional aspects of the landscape is actually quite central to the success of landscape partnerships themselves. In terms of bringing in the others, I really agree with you. I think we've done a poor job of telling the story. Part of that, I think, is because so many, when I look around my 20 So I think the storytelling has not been strong, except in some places where there are very iconic landscapes. So, you know, in South Africa, you've got the wine and biodiversity initiative where you have some of the most iconic biodiversity in the world. and some of the best wine in the world. And that landscape initiative has been able to use that to get people excited about investing there and also about attracting buyers for the wine and other products in Europe and other places because it's so charismatic, the landscape. And I think you've got a number of other places that are high biodiversity landscapes that are charismatic that way. I think you've got the Chesapeake Bay near where I live here in the United States, which is, you know, people care about the bay. But I think this storytelling of how we need to collaborate together, not in a wishful thinking way, but in a very hard-headed, you know, what are the real solutions that are going to make sense in this place way? How we get that story, I'm looking for some wonderful storytellers to work with us and to do some really exciting films and videos and infographics, et cetera, that will really convey this to people. It's literally, to that landscape literacy piece, there must be a much more fun way to call it than landscape literacy. It's more the aha moment when you all of a sudden realize that the problem you have is either coming from or could be solved by all these other actors that you had no idea even existed. I remember I went to a really interesting, I was working with a landscape in Honduras, really severe degradation going on in the uplands. And it was basically kind of destroying some of the very rare coral reefs that were far away in the coastal areas. And they organized a field trip to bring all these business owners and agribusiness dealers and local government officials. And they just took them down to the coast and they did this amazing display. And then they had a big map where they were showing where the pollutants had come from that were destroying it. And people were seeing it. And I'm telling you, the people went back And they just all started thinking about how they could do things a little bit different in their own businesses so that they weren't going to be responsible for that coastal loss. So I'd love to hear ideas from the people who listen to your podcast about how we can turn this into a really, really sexy and inspiring way of moving forward.

SPEAKER_00: 58:14

sharing five years it's not going to be another five years I hope the next time we check in and thank you so much for the work you do and of course coming on here to to share about that and giving us an insight in the landscape approach

SPEAKER_01: 58:26

thank you so much for providing this wonderful service for people in the global community

SPEAKER_00: 58:34

thank you for listening all the way till the end I hope it was interesting and relevant to you