Investing in Regenerative Agriculture and Food
Investing in Regenerative Agriculture and Food
235 Stefania Avanzini - Why and how 26 food giants with a turn over of $900 billion are getting serious about regeneration and biodiversity
A conversation with Stefania Avanzini, director of One Planet Business for Biodiversity (OP2B), about working hard to create alternative vertically integrated, farmed-owned food companies and transforming the current giants. Because, whether we like it or not, most of the food we buy in supermarkets comes from these companies. These companies are finally feeling the pain from climate weirding in their supply chains. So, what are they doing about it, and why did 26 of them join the coalition of businesses for biodiversity?
How does a coalition with companies with a total turnover of over 900 billion dollars work on changing the food system? These are the whales of the food system, not the small fishes, and with all their issues and challenges, they are fundamental to the future of our food system.
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How does a coalition with companies of a total turnover of over 900 billion that's a B work on changing the food system? These are the whales of the food system, not the small fishes, and, with all their issues and challenges, they are fundamental to the future of our food system. Yes, we need to work hard to create the alternative, vertically integrated, farmer-owned food companies, and, yes, we need to work equally hard to transform the current giants, because, whether we like it or not, a lot of the food we buy in supermarkets comes from these companies. Maybe not for the lucky majority of the listeners of this podcast, but for the majority of the global north, definitely. Yes, these companies finally feel the pain of climate weirding in their supply chains. So what are they doing about it and why did 26 of them join the One Planet business for biodiversity supply chains? So what are they doing about it and why did 26 of them join the one planet business for biodiversity?
Speaker 1:This is the Investing in Regenerative Agriculture and Food podcast investing as if the planet mattered, where we talk to the pioneers in the regenerative food and agriculture space to learn more on how to put our money to work to regenerate soil, people, local communities and ecosystems, while making an appropriate and fair return. Why my focus on soil and regeneration? Because so many of the pressing issues we face today have their roots in how we treat our land and our sea, grow our food, what we eat, wear and consume, and it's time that we, as investors big and small and consumers, start paying much more attention to the dirt, slash, soil underneath our feet. To make it easy for fans to support our work, we launched our membership community and so many of you have joined us as a member. Thank you, if our work created value for you and if you have the means and only if you have the means consider joining us.
Speaker 1:Find out more on gumroadcom slash investing in RegenEgg that is, gumroadcom slash investing in RegenEgg or find the link below. Welcome to another episode Today with the director of the One Planet Business for Biodiversity. Welcome, stefania.
Speaker 2:Hi Con welcome. Thank you for inviting me.
Speaker 1:And I always like to kick it off with a personal question, and it's usually super relevant in this case as well, because there's so many other jobs that are easier in the world, and this is definitely not one of the easiest ones. So why, how come you spend most of your awake time, let's say, thinking and acting on regeneration? What led you to this role? How did you end up focusing on biodiversity already? This is the five year anniversary, and biodiversity is maybe slightly hotter now, but definitely wasn't five years ago, and so you've really focused on that. Like, how did you end up spending so much time on regeneration? How did that happen?
Speaker 2:Thank you for the question. If I start a little bit about myself, I would say when I was studying businesses. So I definitely don't have an agricultural background. But when I was studying businesses, I was quite hit by the limitations of seeing an enterprise, a business, as the sole objective to maximize profit. That was not working for me. And then, thankfully, in 2006, when I was finishing my businesses, mohamed Younous won the Nobel Peace Prize and so I got a world of what does it mean when a business pursues social and environmental impact, and his book and many others then really opened the world to me.
Speaker 2:And I have had the luck to start my career to work for an impact investment fund, and so I spent most of my working life, my 15 years, pursuing economic profits but also social impact or, more recently, environmental impact.
Speaker 2:And probably the second thing that really brought me to OP2B is, as I've also worked for the leading network for social entrepreneurship. I've really vetted into a lot of individual enterprises and supported individual entrepreneurs and understood how the power of the collective to really make a change in a system. You just don't only need one innovative ideas, you need this idea to spread, but you need the collective to come on board and I was very, very seduced when I heard about the mission of One Planet Business for Biodiversity because, as you said, five years ago, some of the leading value chain actors understood the limitations of their individual pilot projects and said, actually, if we really want to contribute to move to agricultural models that work within planetary boundaries, that also benefit biodiversity and nature, we actually need to do this collectively, cross-sectoral. So not only one sector is represented in the coalition and this is also the.
Speaker 1:so they have understood the power of the collective and and the power that they can collect, how they can collectively also incentivize the transition, and that's what actually brought me to one planet business for biodiversity and in business school or at university, you remember what it was because I think 15 years ago, probably now slightly less, but still you hear many students, quote unquote, complaining about the limitations of their economic degrees. In that sense of that, it's very, very focused on the numbers, and on the numbers, only the financial numbers, not on the ecological outcome numbers, none of that. So let's say it's very easy to not be exposed to that. There is a limitation to that. What triggered you there? Because you said when Eunice won the Nobel Prize, it was after I was triggered to be interested in there's a world beyond financial numbers only. Do you remember what triggered you to begin with? Was there a teacher, a book, something you saw? Like okay, there's a world beyond the financial numbers only.
Speaker 2:I have to say it has really been.
Speaker 2:In 2006, I was starting my master's and that was the trigger.
Speaker 2:When I heard about, I was quite skeptical, or even I would say maybe quite bored about the fact that I would go in an enterprise to just pursue a profit maximization.
Speaker 2:And so already since probably my childhood, very sensible to the problems that the communities maybe are also affected with and what entrepreneurial solutions can also solve them, and so it was really an eye-opener for me to understand that there are social businesses, that there are impact investment funds that exist or environmental trust funds since a long time, and so this news triggered then my curiosity and, effectively, the book that Yunus wrote. But I remember also at that time Prahalad wrote also a very good book about the bottom of the pyramid and the services and needs and how to contribute to a world without poverty. So I would have to say my start, my early start in the career, was very much motivated by social impact and they go hand in hand. We'll see, when we talk about the agricultural transition, farmer prosperity and farmer well-being are at the center and need to be at the center for this transition to be beneficial for the ones driving it who are in the driver's seat.
Speaker 1:And when did that let's say, farmer, rural communities piece come into it? Because in many places not sure in Europe, but the impact investing world in some places is really focused purely on the social, which is interesting because without the environment or the social wouldn't exist. And vice versa, how did that agriculture, food piece come into your worldview?
Speaker 2:let's say agriculture food piece come into your world view, let's say Well. I would have to say it was luck too, because my first assignment for an impact investment fund. First of all, it was an impact investment fund funded by Danone, so it's one of the biggest agri players.
Speaker 1:It has to be about food.
Speaker 2:It has to be about food, and it was to support a Senegalese entrepreneur who created actually the first milk dairy value chain in Senegal, because before herders were nomads and were auto-consuming their milk, and so I had the opportunity to support with the marketing and the sales of this enterprise, which exists still today and is thriving. So it was a very it was this positive experience and, I have to say, for the past 15 years I've only worked on topics that are linked to food value chains.
Speaker 1:And so how did this coalition come onto your path? Because I think you worked at Ashoka, you worked at Danone, you could have continued that probably there's enough work to do in all of those for for the next decades. Uh, easily. And uh, not because they're not doing great work, but because there's so much work to do. And and then this came, came about, or this passed on. And how did how did that happen?
Speaker 2:it happened.
Speaker 2:First of all, I would say that I had a very strong curiosity for collective initiatives.
Speaker 2:Also, at one of my last missions at Ashoka, I contributed to create something called the Bioregional Weaving Lab, where Commonland is also very much engaged, and so I was more and more linking, having a strong interest to environmental, linking, having a strong interest to environmental, and so agriculture as a how can agriculture be a solution to our climate crisis and biodiversity loss, versus seen, as always, as a burden, because this affects me the food I eat and how I consume so I see a very direct impact also to my surrounding and so very interested by collective initiatives, and so I had been following, actually, one Planet Business for Biodiversity since its inception in 2019 and was very enthusiastically cheering from the sidelines, and this is why I took over the director's level two years ago and today, just also to make sure for the audience. Today, the One Planet Business for Biodiversity Coalition is an initiative and a program hosted by the World Business Council for Sustain for sustainable development, so it's part of a bigger organization that really supports businesses on their sustainability paths and what?
Speaker 1:when did that um transition happen? Let's say to um, to them, because it was set up as a individual or a separate organization, which is always tricky and interesting and relevant. But there's always a like how long do all these coalitions survive? Like, when did that? Let's say it's, of course, not a merger or an acquisition, because these are non-profits, but when did that happen?
Speaker 2:I would say so. The full integration happened in January 2022. But, I have to say, since its inception in September 2019, quite quickly, the coalition was still already had his back office, so it was very close to the World Business Council and the World Business Council was managing the back office of the initiative since almost its inception, if I recall well.
Speaker 1:And so what is the coalition? And what are you currently recording this at the end of summer, in summer of 2024, after five years, and you're celebrating the five years as well and what is the coalition if you had to explain it now on a flight or the dinner party or to someone who never heard of it? Of course, heard of the word biodiversity but just for our audience, to get them up to speed of what we're talking about when we talk about collective action.
Speaker 2:Well, as I said, five years ago, a group of companies really realized that they needed to move from their individual company projects that they were already having, trying to improve the resilience of their value chain to a collective approach, and so they decided to create a coalition, or a group of like-minded companies and CEOs at the top who actually thought that we have a mission to contribute to transform our agricultural models so that they protect and restore biodiversity. So, with a very strong mission to increase agricultural biodiversity, that was seen already five years ago as a key transition lever, I would say. And today the coalition is comprised of 26 companies, value chain actors that have an aggregated turnover of over 900 billion.
Speaker 1:Yeah, just to be clear these are not the smaller fishes, these are the whales of the sea in this case. But it's interesting. When launched, I think Emmanuel Faber, then CEO of Danone, was very fundamental in that. Biodiversity was such a I remember the press releases coming out etc that it wasn't another one around carbon, it wasn't another thing around sustainability. It was very putting biodiversity in the name five years ago already. Like this is the fundamental piece, Otherwise the rest, like it's the younger piece. You shouldn't pull out of the tower because it will collapse. And what has changed over this five years in biodiversity terms? I mean, we know that the numbers are going down fast and we haven't been able to push them up, let's say in terms of richness of this earth. But in terms of urgency those 26, have many of them come on board recently? Like, in terms of urgency, of seeing biodiversity as a key point? Have you seen the shift over the last two years that you have been there? Of course, Thank you.
Speaker 2:Thank you for asking years that you have been there, of course, thank you. Thank you for asking. For sure we can reflect upon the fact that five years ago it was a very visionary idea to actually bring biodiversity and agricultural biodiversity, so cultivated biodiversity really at the center of the conversation, because at that time we were only talking about climate. I would say what has probably changed in these five years is, I think, a growing understanding and alignment in the agricultural value chain sector that well, a transition from our current model is needed, like I think there is a quite. First of all, there's a quite shared understanding that the current agricultural models industrial agricultural models we're relying on, they're hurting farmers because they're not adapting to climate change and they're also hurting, as a consequence, value chain players in the system. So that's the first, I think, strong realization that now is shared by many, many players. And I think the second realization that is very much shared is OK.
Speaker 2:And what kind of transition? What should we work towards for? Should we just go for carbon farming? And I think there is today a clear no that says the transition needs to be. I use the word holistic, but just to make sure the transition really needs to touch upon different dimensions economical, socioeconomic dimensions and also environmental dimensions and I think there is a strong understanding today that farmer prosperity and so farms profitability need to be at the center and need to improve thanks to the transition to new agricultural models like regenerative farming, and that then it also needs to benefit nature, and so the links between nature and climate are key, and today also there is ample scientific evidence. Johan Rockström also published lately reports that showcase that if we want to reduce the climate impacts of agriculture, if you take a look from that lens, actually two-thirds of the potential of carbon removals and carbon reductions come from actually improved nutrient loss management, which really means that nature plays a big role, because it's the hedges and the trees and the alleys that would allow for pollinators and natural pest control to thrive. So I really see that the link between nature and climate is very much embedded. I would say that's what I see.
Speaker 2:So I see more and more consensus for a holistic transformation that will benefit farmers, nature and climate.
Speaker 1:And the view of I think it's a fundamental point you're making here that nature is part of agriculture, if we like it or not. Maybe we've reduced it significantly on most of agricultural land or a lot of it, but there are a not maybe we've reduced it significantly on on most of agriculture land or a lot of it, but there's a lot of. There are a lot of ways to bring it back or to restore or to to regenerate, and. But I think the view or the the world view of we should separate nature and agriculture and should intensify this has sort of slipped away a bit or reduced over the last months or years because there was a strong movement, eco-modernist or whatever you want to call it. That's okay. Let's intensify on a small piece of land as much as possible, or smaller, and then let's let the rest rewild and and there's some argument for that.
Speaker 1:But I think a lot of evidence has shown that it's much more relevant to rewild part of of agriculture land or to re actually to embed nature more into agriculture and food, because you just have many more hectares to play with and it doesn't mean you're going to produce significantly less actually on the contrary in some cases but that sort of has been quite a worldview battle over the last years to see, okay, can we actually have more biodiversity on productive land or not. Science is showing that it's absolutely the case, but it still doesn't mean that world view goes away overnight. Let's say, have you seen that as well? That sort of pooling between it needs to be nature or, and my feeling is, at least in our bubble, that that's starting to get less of an argument or at least less of a world view. But I don't know if you see the same.
Speaker 2:Now it's the eternal dilemma between what we call land sharing versus land sparing, or maybe the experts call it like that.
Speaker 2:Yes, I've definitely seen this.
Speaker 2:But science is quite clear on the fact that below 10% of natural or semi-natural habitat per square kilometer, your ecosystem collapse.
Speaker 2:So then you're just completely reliant on agricultural inputs for your field to for the productivity of your field, and ultimately we then know also that how bad shapes our soils are, and just in Europe we have over 70% of our soils were just seen as not in good and healthy conditions. So I would say, definitely seen. But I think the argument of science of that this is so important to benefit from the natural ecosystem services who are for free, because pollinators and natural pest control for the moment are for free. I think we're seeing it more and I just saw this morning there was a, an article from the Guardian, for example, who was just praising about the recent good results from the from the English, from the UK farming, nature farming and thanks to the Brexit they had to develop a new incentive system for for nature farming. It was good to see how they were also seeing that positive results of incentivizing to put back nature in agricultural, in productive land.
Speaker 1:And from the last two years, what has surprised you the most from your work? What are things that you really didn't expect? On the good and the bad, of course, whatever comes to mind first.
Speaker 2:And probably linked to the conversation we were having, is what surprised me the most is one of the case studies and evidence pieces we have built and designed with Boston Consulting Group was actually to look at what's the farmer's business case. Actually, we're seeing science and there's ample evidence telling us when you bring back nature in farming, it has positive impacts for the environment. But what about the farmers? And I was quite positively surprised when we learned that, actually, when you compare conventional agriculture to regenerative agriculture and the case study was done in Kansas in the US the farmers actually have up to 120% increase in profitability, and so there is ample evidence that starts to emerging, evidence that starts to build up. It actually pays off economically for the farmers, and so then also for the value chain players, for his clients, and so then also for the value chain players, for his clients, and so this was for me a realization. I imagined it would be a little bit more positive, but not so much more positive Besides the fact that, of course, then the farms are more resilient to climate, extreme weather events and to drought, and so then we know how much climate change is affecting farmers that are at the forefront. So I would say that was the first positive example I have. I might have one that is a bittersweet that I can share is we're really seeing within the coalition really trying to support companies to move from individual projects to also collective landscape action. So how can we actually collectively set up projects instead of having your individual projects at the farm level or pilot farms, and when? Seeing that I can say that I've seen, for example, a project that didn't go through and the main reason was there was not a strong multi-stakeholder endorsement, probably when the project was set up, and so just reminding ourselves that execution is hard. One thing is talking about what we want to put in place and the other one is doing it and then learning also by doing and again really stressing also that importance of a strong multi-stakeholder alignment, strong alignment with farmer cooperatives who are the one really driving the change and representing actually the farmers who will be driving the change. So that probably surprised me.
Speaker 2:And maybe, third thing that is still, I think we're still a little bit in a rabbit hole. We're not looking at it, oh no, sorry, we're sticking our head in the sand would be a better image is that this transition will cost money. So today there are two things that are, from an economic point of view, that are not aligned. First, the short-term costs and risk of this transition are way too much on the shoulders of the farmer and we can't ask them to take that risk alone.
Speaker 2:And secondly, when we're looking at farmers farm the way they farm because of the market incentives that are in place, and today's market incentives, because it's a heavily subsidized sector, incentivize farmers to farm the way they do today, conventionally, to make it simple and to move it to regenerative. It actually requires also to realign market incentives, and value chain actors, like the one that I have the pleasure to represent in OP2B, have a role to play by, for example, proposing long-term offtake contracts, price premiums linked to the adoption of a basket of practices, and then, of course, try to coordinate those incentives so that we move from disjointed incentives to a really coordinated farmers financing package, especially for the transition. But there is still some dissenting voices in the ecosystems that think this will not cost more, and I think we just need to acknowledge that transition has a cost and all actors and different actors in the value chain, and also, of course, governments, have a role to play to invest in that transition and bear the cost.
Speaker 1:And how is that landing, like that realization that this is going to be a needed transition, but also a transition that has to be invested in with a cost or an investment or whatever we're going to call it, however we want to put it on the balance sheet or on a profit and loss statement, but this is going to cost money with the actors you represent, with the groups, because many of them are used or grown so big in a commodity system where it was or is probably way less now than it was 10, 20 years ago.
Speaker 1:But to shop around to buy oranges somewhere else, or your olive oil, or your tomatoes, or your cacao, or your cacao beans, et cetera. What you're describing is longer-term contracts, longer-term engagement, potentially risk sharing as well if something goes wrong with a harvest harvest which is way more likely these these times than it was not so long ago that it requires a different kind of relationship with, from the buyer to the trader, to the cooperative, to the farmer. And this is even the easiest one of only four steps probably there are ones with six, seven, eight, ten. I mean, decommodification is a term we like to use, but it's not easy at all like how does those things plus potentially extra payments, plus longer term relationships. How do they land with companies that you work with? Because it hasn't been in their nature, let's say For most of them. There are some exceptions, but for most it hasn't been in their nature.
Speaker 2:No, probably. To answer this question first is the biggest risk that companies will face in the next 10 years is natural resources shortages. It's one of the biggest risks, of course, extreme weather events, so supply chain disruptions in the next 10 years.
Speaker 1:And you're seeing that. Do they see that as well? Like is that what you hear from them.
Speaker 2:I think what I just said is part of the WEF annual monitor report, so it's not me saying it.
Speaker 2:It's economists, experts that are just underlying how supply chain disruptions are a risk, and especially a risk for companies that have land-based value chains.
Speaker 2:So that resource either fiber food, so it can also be textile company, also cosmetic companies with natural ingredients, so it can also be textile companies, also cosmetic companies with natural ingredients, and so they have. Most of them have understood that they need to invest in the resilience of their value chains and to also secure their supply chains, and this is probably the number one reason why companies join the P2B and why companies invest in the transformation of their supply chain. It is not to claim to net zero, it's really the resilience of the business which is important, because that's at the core and that's why they are able to unlock also considerable investments and, as you said, the commodifying is not so easy. I think this is one of the biggest shifts for their procurement teams in the way they operate, and, of course, they are doing it today. They're doing it together with their partners, so traders are coming on board, and so this is definitely a different model and I think we'll see also many more changes coming up there.
Speaker 1:And do you see examples there, I'm not saying leading to fully vertically integration, but examples where those relationships have changed between the farmer on the ground and eventually the company that is part of the coalition? What are some pilots or some examples there that you've seen coming to fruition, if already?
Speaker 2:Well, there are some commodities where a direct relationship to farmers is already a little bit historic, so these are probably examples where it so proposing long-term contracts. But we can also see it on some rotational crops. For example, potato Companies that are involved with potato growers often have that more direct relationship and I can, so I've seen that there, and sometimes it's also met with some hesitation from farmers, like I know. Sometimes also farmers say why do I? Why do we need to marry for six years? But usually when we propose long-term contracts, I just want to make a disclaimer Companies, the price is still negotiated on a year by year in case it goes up, or the farmer, the farmer, of course, can.
Speaker 2:Prices are not set. But it is a change in relationship. But I think it meets the needs of our current world where we need to share both the risks and the costs of the transition and then, of course, of the more uncertain environment we're also evolving in because, due to extreme climate, weather events actually actually yeah, our agriculture is more uncertain and is under higher risk, I would say, and that kind of thinking of this longer term way of working.
Speaker 1:Do you see that landing as well? I don't know if any of the coalition partners is, let's say, from the financial world as well, because we've seen the examples with Unilever, with Danone and others as well, where there was a very strong focus on the long term until it was punished or, let's say, pulled back by some activist shareholders. So we also see that the long term is more than a quarter and in the financial world there is a whole group that's focusing on long-term, but there's also a whole group that's definitely not focusing on the long-term. How much can? Because not all of the companies you work with are publicly traded. But can the publicly traded ones do, or how can they make sure that they can do long-term, while they're actually usually pulled back on things that didn't work this quarter, actually usually pulled back on things that didn't work this quarter.
Speaker 1:So we need to make changes, et cetera, et cetera. We all know agriculture is seasonal and if you want to do anything in agroforestry, it's six, seven plus years, and if you want to do anything on a landscape scale, it probably is 20. How does those like? What's your feeling or your sensation there, with the financial world also getting on board on a longer term vision, which we all know, but still we see some actors are trying to squeeze a bit too much in the short term.
Speaker 2:Probably two answers, two points to answer this question. First of all, today there are many financial actors who are involved in financing the transition, but these often are asset managers with a strong impact in their DNA. And some insurance companies are also starting to get on board, which is very interesting to look into because they see the advantages of investing in more resilient models like more resilient agricultural models, like regenerative agriculture, less risks and so more profitable businesses for insurance companies. And then we also see some historic banks that have always had a very strong relationship with farmers who are also coming in and saying if I can support a farming model that is also allowing to decarbonize agriculture, maybe they look at it more from an end zero topic. It definitely is interesting.
Speaker 1:Do you see signs now? Is that changing? I think that's more like over the last years. Do you sense that the financial world is waking up to that more, or is it still a minority? And we have to consider that the ever-changing tide of the financial world is not really connected to the flows and timings, let's say, of agriculture and food.
Speaker 2:No, I think it is changing, and it is changing due to a sense of urgency.
Speaker 2:I think it is changing and it is changing due to a sense of urgency. Agriculture, also, as a topic, has become more and more of a priority, also for multilateral banks Before it was not so much the case, because investing in agricultural transition for mitigation and adaptation goals is higher up in their priorities. This is very encouraging to see, also higher up in their priorities. This is very encouraging to see. Also, this means that the material links linked to extreme weather events and impacting agriculture and food sovereignty or food security are more and more prominent and top of mind. And we also see, then, more we can call them conventional or more mainstream financial actors now really investing in the transition, be it insurance companies or banks and asset managers. Yes, I would say yes, this is really definitely something we're seeing, and I have the privilege to have worked with companies like BNP Paribas or Rabobank or AXA Climate as an insurance companies, but Lloyd's banking group is also very engaged. There are more and more financial actors engaged there.
Speaker 1:So what do you see as the biggest opportunities now, after two years and after five years, of course, of the coalition, where do you see now, looking? You mentioned landscapes and the struggles and opportunities with that. Is that one of the big ones? If you had to pick one or two opportunity areas for you to focus on, what are the big ones?
Speaker 2:Thank you for your question. What I would really focus on is probably moving from individual mindsets to collective and individual agendas to collective mindsets, and we can see it in different things. And individual agendas to collective mindsets, and we can see it in different things. I would say the coalition in the past five years has really worked a lot on how do I move from individual companies framework they all have their region ag program to a shared impact monitoring system at a landscape level. So how do different actors in the value chain food actors, but also fiber or cosmetic actors, how do they all align on the key impacts they want to measure, monitor and reward farmers for at a landscape level? That's a very important change that needs to happen.
Speaker 2:I think the most important one, of course, is then real action. How do I move from individual companies, pilots or demo farms to actually collective landscape investments? And this is probably the one that really excites me the most and very connected to that one. The other shift that I see is how do we move from disjointed incentives that exist today to really comprehensive farmers financing package that's probably for transition finance and tomorrow also harmonized incentives that that incentivize more the transition or to regenerative farming practices than the conventional industrialized agricultural model is today in place and heavily subsidized in many countries and where do you see, I mean, the landscape piece really interests us in on this podcast and where do you see that happening already?
Speaker 1:And, if not, where do you think or hope like where, with your coalition? Which landscape are we going to see first, where this is going to be, of course, piloted, but piloted at a landscape scale and a watershed scale, not on a demo farm scale. What can we expect, or what do you hope to expect too?
Speaker 2:scale. What can we expect, or what do you hope to expect too? The good news is that I have the impression there are many different regions where landscape level collective action is effectively growing more and more. There is definitely in the US. There is the Midwest Row Crop Initiative. There is also the Soil and Water Outcomes Fund. That is a very interesting financing mechanisms as well as, for example, if we look in Europe, this is still emerging, but there's different national initiatives EIT Food, which is interesting, so European agencies also investing in the transition in landscape level.
Speaker 2:Transition Lens, the Landscape Enterprise Network, which is an initiative that is really rapidly growing. Innovative financing mechanism, too, to pay for ecosystem services and to allow for at the landscape level. So we're seeing it, but of course, also in many other I could also cite in, with, of course, also another focus on deforestation and conversion free. But in Brazil we have initiatives like the Farmers First Cluster, which is funded by agri-traders for deforestation and conversion-free soy supply chains, or in India on sustainable rice landscape initiatives I would say they're different on palm oil, of course, in Indonesia, and coffee and cocoa as well. There are quite many projects. Rainforest Alliance, for example, is very engaged there. So I would say there are many who are rapidly growing. Where I see the biggest potential for scale is, for sure, in the US, thanks to also the enabling conditions, so that the US government, with their Inflation Reduction Act and the Climate Smart Agriculture Partners partnerships, has really helped, I think, to to create those, to unlock some of those funding that are necessary for a collaboration at a landscape level.
Speaker 1:so probably I see it growing very fastly there and I hope, because I'm based in europe, that we won't be too far and also will contribute to that and and if you could pick one landscape, regardless of the conditions at the moment in terms of is there even a landscape level work going on, is any of the coalition members involved or not but if you had to pick one landscape that you would love to get on that journey, what kind of landscape would that be? Would it be Mediterranean, northern Europe? Would it be landscape? Would that be? Would it be Mediterranean, northern Europe? Would it be somewhere in West Africa? What landscape would you love to have tackled?
Speaker 2:Not necessarily by you, but in general, no, no, definitely I think I would pick. I don't have one specific in mind now that comes to my mind, but one of the biggest issues we have is really watershed management and water management, I think, in agriculture. So I would definitely want to pick one landscape that is extremely suffering from maybe dross or not enough water to actually see that how, with bringing back nature and adopting regenerative farming practices and also maybe some landscape design of farming practices and also maybe some landscape design, we can actually make sure that or prove that a landscape can exist and that we do not need those. I don't know if you've seen those mega pools of water that sometimes are used to for conventional agriculture.
Speaker 1:The massive irrigation dams.
Speaker 2:Yes, exactly.
Speaker 1:Which lose a lot of water. I mean, if you think of the evaporation it's, I mean it works to a certain extent. I always wonder, I mean it is easier quote unquote easier it's definitely easier to finance and to organize a massive project like that compared to, I don't know, five or 10,000 different key line design swales, ponds, like much more human scale design ones. It's always easier to do one big one and if it works like, if you manage to raise the funding et cetera, and you get a loan from the World Bank or something, it's very difficult, I think, to get a loan from the World Bank or somewhere for 10,000 kilometers of swales somewhere or key line design Like that's just too. I hope people are going to figure that out and start to get funding for that. But it feels that amount of money spread out over a landscape more would have had such a much bigger impact in terms of water holding capacity, in terms of restoring, in terms of actually storing water where it's needed, instead of a big lake that loses a lot in terms of evaporation and actually loses a lot of agricultural land, because usually these are built on riverbeds on the most productive agricultural land that there is and then we fill it up with a lake for good reasons, for good thinking, at least historic thinking, but probably not so adapted to the world we live in today.
Speaker 1:And I like to do this, ask this question in a way where, for instance, we do this in front of a live audience, where we're in a theater in Zurich or Geneva, somewhere in Switzerland where you're based, or somewhere else, maybe in New York or London, and we have an audience of investors, either professional, investing through, let's say, nine to 5 or 9 to 6, through their job, or managing their own wealth, which probably takes more time even. What would be the main message you have? We have an interesting evening. Of course, they get excited and interested about the opportunities and challenges of a food system in transition, but what would be the main, if you want them to remember one thing, what would be the main thing of an evening, of a conversation we would have on stage? What would be the seed you want to plant in the minds of a theater full of financial professionals?
Speaker 2:The main message probably I would try to convey is that there is no net zero in agriculture without a holistic approach, so without regenerative agriculture. So that's probably the main message that for me is important that it also comes into the financial community Please do not come in the agricultural space just thinking about climate. Make sure that you have a holistic approach, that you think about farmers first, farmer centricity, and then nature and climate, because they're all interconnected. That would be probably my main message. And then the second one probably is investing in agriculture can be a profitable business. So please do invest and I would say I see lots of potential on investing in markets that create demand for alternative crops. It's probably one of the biggest needs that we have. We actually also need to move from heavily dependent monocultural systems or with very few rotation, to a very diversified crop, to many diversified crops. So please do invest in creating demand for alternative crops.
Speaker 2:And then the other biggest innovation that is happening, where a lot of technology and investments is needed, is we're moving from an agricultural models that are very practice-based. We're trying to move away from that. We're very prospective, maybe, on practices. This is when you need to apply your fertilizer, your pesticides and just do it every 15 days and don't ask yourself questions To a farming approach where knowledge on soils we haven't talked a lot about soils today, but the knowledge of the health of your soils and also the it's much more needed health of your soils and also the much more needed and so more emphasis on the results that you can achieve, and more freedom and agency to the farmers to decide which practices or which combinations of practices will arrive there, and for that we need investments in probably cost effective measurement, reporting and verification schemes that are not there today.
Speaker 2:Most of the things we align on that we want to measure and we work farmers for are too cost-effective to measure. So that's probably another area where I would say there is a big opportunity to invest. So, holistic approach there is no net zero without region ag and investing in agriculture is profitable and diversified crops MRVs are probably two of the biggest areas.
Speaker 1:That's a perfect bridge to another question I'd like to ask what would you do if you would be in their shoes? Let's say you have a billion euros to invest, over a billion Swiss franc or a billion US dollars. They are not exactly the same, I know, but just a large amount of money to put to work, with long-term horizons, but it has to be put to work. I'm not asking for exact amounts. I'm asking what would be the main buckets you would focus on. Maybe they're the ones you just mentioned, or maybe you say actually, if I had the freedom to choose and I was focusing on impact or ecological outcome, I would do X, Y, Z mostly, and I would keep something for this, something for that. What would you focus on if you had that amount of money to put to work? Besides the question if somebody should be in charge of that amount of money and how that came into your hands, that's something we cover in another podcast.
Speaker 1:But let's say it happens tomorrow morning you.
Speaker 2:I would definitely. Probably what I just shared is definitely relevant also here. I would invest in creating markets for diversified crops, because I think that is probably the biggest need and also the biggest. Do you see that happening with your coalition?
Speaker 1:Then we get back to the answer. Sorry, but do you see that happening? Because we did an interview it will be out, I think around this time before as well with Wilderland, with Matthijs, and he kept calling it and I'm calling it as well Monoland versus Diversityland and he sees so many opportunities in diversity and in selling that and somehow brewing it into interesting teas and interesting things. But it's also very difficult for larger players because they're used to very constant, very commoditized value chains and now we're saying, yeah, but you can also buy 20 crops of this farmer, or 15, or 10 or 6. And like, do you see this notion of buying the full rotation or whatever Dan Barber calls it? I think the risotto, the rotation risotto, like that notion. Is that starting to? Because we talked about it with Nestle actually in their interview? That's fundamental for a landscape, but it needs people need to still buy it. We can keep saying it's fundamental, but what? Do you see something moving there?
Speaker 2:I definitely see it is probably the biggest bottleneck for large companies. I want to emphasize that first, and I see moving, because that's when I'm talking about also investing in collaboration at a landscape level. That's actually what happens together. Who, for example, off, take the wheat, the, the, the sugar or the alcohol from beetroot, the potatoes from the potatoes and next? So we see these rotations coming together and these combinations and that's how they can actually contribute to a full or to partly fund a full, a full rotation. But but that's why I would like to invest more, because there is much more needed and much more diversity is also needed. We need to know how much lentils poles play a big role on soil health and so, yes, that's where I see the biggest gap also.
Speaker 1:So you would invest in brands or smaller companies that are creating that demand for the lentils. For I mean, we all know, if everybody loved lentils, a lot of these things would go away, a lot of the issues would disappear. But, like the legume side of things, how would you invest in that?
Speaker 2:There is actually, by the way, there is an interesting initiative backed by the UN called the Beans Is how campaign that we are also supporting at the World Business Council. Very interesting initiative because they are trying to double beans consumption at the World Business Council. Very interesting initiative because they are trying to double beans consumption, beans in very large place, by 2026. So we're very, very working with chefs and so interesting to see here because, of course, when you invest in that you're also talking about, as you said, investing in, am I investing in the brands or am I, for example, seeing partnerships with public procurement? That could play a big role if more canteens or more universities have more lentils on the menu. There are different ways of doing it. And then, yes, probably the other easier sector where it's important is cost-effective measurement, reporting and verification schemes measurement, reporting and verification schemes.
Speaker 2:There are many actors out there that I have the pleasure to meet and exchange with, but there needs to be even more disruptions in this field to make sure that we land on very cost-effective MRV systems.
Speaker 2:So I would say this is the second area that I see would be very important from a 1 billion.
Speaker 2:But if it is my 1 billion, then for sure. What I would love mostly to support and fund are collective landscape projects. And here we see but that differs a little bit from your question, because I don't know what can return on investment exactly but how can we contribute to create comprehensive financing packages for farmers in specific regions so that a group of farmers, a comprehensive group of farmers, can transition, so that, and here very concretely, that allow them to have better depths at a better rate for new machineries that may be right off their pre-existing depths, that ensure them insurance products, that help them ensure, especially for the transition and for, maybe the loss for some of the first years or seasons or the trials and errors that they want to do with new cover cropping, and so I see that as very important. And then ultimately, of course, in the more longer term, is what the incentives for the adoption of some practices, and then that can move to payments for ecosystem services. This is all new and growing, I would say.
Speaker 1:Yeah, no, no, absolutely, as we discussed before, I think is one of the together probably with nutrient density and quality and flavor, one of the keys to unlock different kinds of actors and interests, because they're not exactly the same but to show what regeneration can do on a larger scale in terms of restoring water cycles, bringing back rivers all year round, cleaning them up, storing a lot of water, like actually having productive regions. I think a lot of regions are going to figure out that that that's absolutely essential. We only have to look at the hottest july we ever had, the hottest june and probably it's going to be the hottest august, um, and in the northern hemisphere, and probably on the other side it's it's equally warm, slash cold, slash extreme, um. So that that landscape view is is so fundamental and so neglected. I think there are a lot of actors working on it, but if you look at a larger sphere of sustainable food, etc.
Speaker 1:I don't think the word landscape is hardly ever mentioned. Well, it's so fundamental because you can have an amazing demo farm, but if the whole landscape is desertifying, then you're going to not make it probably or at least have a lot more issues and within the coalition, if you have the meetings and you don't have the name names, obviously, but where do you think different? I like to ask this question that John Kemp likes to ask, like what do you believe to be true about regenerative agriculture that others don't? But in this case, let's say, within the companies, let's say you have a conference or a gathering, where do you notice that you really think different than your peers or the people you work with when it comes to food and agriculture?
Speaker 2:I would say one of the things that the coalition thinks differently than many actors in the value chain, I would say was the level of transformation that we're aiming for in agriculture.
Speaker 2:You know, we can say, are we trying to just improve and sometimes we can call it carbon farming, conservation agriculture or are we actually trying to go for a full holistic transition that really has to improve and benefit farmer? Prosperity first has to impact nature, water quality and water quantity, and so really also rooted in science. But we also look at pollution, and sometimes pollution is a little bit of an overlooked sector when we're trying to talk about the transition in agriculture, and I have the impression. So I have the sense and the feeling that I have is that the committed members that we have have understood that no, we need a holistic approach. We also need to look at the impact of pollution that pollution in agriculture has on our rivers, on our soils, and that this is something that we need to fix for. So I would say that is probably one thing that I would say yeah, that would come on top of my mind, top mind.
Speaker 1:And like, how, like? I think, like, how deep is this transition? I think many people underestimate or or maybe don't want to think about it, or somehow it's easier if you don't think how deep this food and agriculture transition is or needs to be or will be, if we like it or not, as I mean you could trace it back to the invention of agriculture, the invention of the plow, or I mean there's there's a lot of big shifts in that are going to be triggered by regeneration in general. It's not just a few practices and they will be fine. We're going to talk about collective land ownership. We're going to talk about landscape scale. We're going to really figure out what health means in food and agriculture, and that will mean big shifts. Big shifts just like in energy, but this is probably an even bigger rural versus urban and all of those massive conversations that we're going to have in the next decades are going to be rooted in food and agriculture and how we treat land or how we manage and steward land and seas.
Speaker 1:Obviously, we're doing a full region agriculture series at the moment, so we try not to we have neglected it a bit but try not to neglect the water side or the water farming side of things too much. And to touch upon health, how important is that of a topic? Health, flavor, nutrient density, quality, whatever you want to call it and, of course, the issues on the other side of the ultra processed food, obesity and all the health side of things. Is that something that is part of your, let's say, realm or not? So much because of biodiversity focus, agri farmer focus, and of course, it's part of the realm of your coalition members because they are part of selling food. But how about health in terms of the coalition side of things?
Speaker 2:I would say probably the strongest link that we have in our work is really the nutrient density work.
Speaker 2:I think you had probably Tina Owens also on your podcast and we're supporting, for example, the Nutrient Density Alliance, so very interested in making the link between living soils and rich soils and nutrient dense crops let's say, carrots, if you want to take an example so that link and that link that then it has on your gut and on your well-being and the nutritional values it brings.
Speaker 2:I think this is as an individual and as a consumer I'm extremely interested into that and that makes so much sense and there is today a lot of evidence, scientific evidence out there, and now it's about how do we make sure that the end consumer knows about it, and the Nutrient Density Alliance is doing great work to spread it, and so that is a very clear link. Some of our members have also done work to really understand how this can impact their products and portfolio and diversifying product portfolios and was also part of some of the transition. So really the the upstream, so how they are managing their supply chains, and so in procurement and operations, and less on today, less working on consumer facing, but effectively the transition to be as a whole.
Speaker 1:It will have to involve everyone yeah, it's such a massive piece because if you are I mean to talk about piece if you're growing your piece amazingly in a regenerative rotation and all of that but it still ends up being extracted, split, bleached and ends up in some kind of anonymous ingredient list somewhere.
Speaker 1:We got our environmental outcomes on the farmer's side, but we didn't get the health outcomes that they could have had if they were eaten in a different way. So it still feels very disconnected, I think, in many of the extremely large food companies the smaller ones as well. But it's interesting. This is going to question a lot of their recipes and ingredient lists and a lot of their processing as well, which I think Ellen MacArthur Foundation did some very interesting work on the recipe side of things and are going to launch, I think, a few pieces of work. But when we interviewed Emma Chow, a friend of the show, and she left after that and then joined us actually for a number of episodes on the region mindset, that's the big piece. How is a landscape going to influence recipe making and how is it going to change the cookies that we end up eating or whatever processed food ends up being made unless that also changes? It's great for the farm and the landscape and for all of our environmental outcome, but it's not going to do a lot for for health.
Speaker 2:but I understand that's probably not part of your, your mandate to also tackle the yeah, and probably I don't know if that's what you're referring to, but the Ellen MacArthur Foundation launched recently their Global Food Redesign Challenge that we have been also supporting because I think it's a very interesting challenge that tries to effectively make a link between food formulation and the way you and then agricultural an impact on agriculture and how you design it. So it's interesting to see how, of course, about upcycling, recycling and using seasonal ingredients. So it's more than the health dimension, it's the diversity of ingredients that is a very important element in that global food redesign challenge and, if you want, I can connect you to their teams, if you want to have them on your podcast and they can tell you, of course, more about it.
Speaker 1:Yeah, it would be great. Very supportive of this. I remember the, the first report coming out in 2021 and was based on fictional um, like they came up with recipes and how certain things could look like. I can remember a cheese made half, I think, from milk coming from microforestry system and half like a silver pasture sorry, sorry and half fermentated. And like they were calculating the biodiversity outcomes and they were calculating also the environmental outcomes and it was very, very impressive. And then, of course, how to get it into practice, which I think is where they're getting now to, which probably needs an update on this podcast. So that would be good. And then, as a final question, if you had a magic wand and you could change one thing overnight, what would that be? Could be anything We've had global consciousness, or all animals outside, or all subsidies disappear, like anything you can possibly imagine. What would you do if you had that power?
Speaker 2:Probably the biggest shift I see that is needed is how can you really move from individual agendas to a truly collective mindset to solve these agendas and, linked to that magic wand, if we are all seeing the importance of our collective agendas, what's then important is then to understand the system and so how we shape the market incentives that are in the system, and so the importance of, as you said, can we make sure that governments, value chain actors are all investing in the future of agriculture, not in the status quo, to keeping what we have and seeing it degraded by extreme weather events? But can we all invest in the future of agriculture, in the future of more resilient agricultural models that help us have more productive and deliver more productive raw material, food, feed and fiber? But that would probably be my biggest wish.
Speaker 1:I think it's a perfect end to this conversation. Actually, no, what are you excited for? You're celebrating five years. In five years, of course, you have the vision, and always the last question leads to other last questions. But let's say, in five years, what would be something you really, really want to be able to celebrate with the coalition?
Speaker 2:The thing I would mostly want to celebrate with the coalition in five years is really a massive unlock of investments in agriculture and especially at the landscape level. Of course, I didn't bring so much number, but I can say in the past five years the OP2B members have invested over 3.6 billion US dollars and have engaged, like over 300,000 farmers, in their project on regenerative agriculture. This was in the path from 2019 until now in 2024. But if we're looking at in the next five years, how can we just unlock really that massive investment that is needed to really accelerate the transition? Because today, I think what we can say is the transition is happening for many, many years. Millions of farmers are engaged in agroecological, regenerative farming practices out there, but they are still the minority. I think it's estimated that 15% of global agricultural land is actually, we can say, is using regenerative or agroecological farming practices. But how can we unlock?
Speaker 1:five.
Speaker 2:Right, you didn't say five zero yeah no, 15, 15, 15, so good, too bad yeah how do we get? To the 15, but it's, I think yeah, how do we get to the 50?
Speaker 1:interesting. Probably you have to look at a landscape level. But there's a lot of research like what's the tipping point in systems? And I think it's somewhere between 10 and 15, or 10 and 20, like 13, 14, 15, like what do you need to suddenly become the norm, or at least not become this, the minority weirdos in the corner? And and that's probably part true in procurement departments, that's part true in certain categories of food, that's true in landscapes, it's true in farms. Like what do we need in certain regions of food? That's true in landscapes, that's true in farms. Like what do we need in certain regions to get over that hump? And then things start to flow and then we get to the 50 and 100 and all of that, but it's, I think, almost more. How do we get to 20? Then it's how do we get to 50%? So your would be okay, how do we move the needle on hectares and impact over the next five years?
Speaker 2:Exactly, I would say so. And just to finish, science tells us that to stay on a 1.5 degree journey that's what we agreed on in Paris we need to have 40% of total agricultural land under regenerative farming practices. So we still need to move quite a bit, and there is a considerable funding gap today in agriculture, and that's what I would love to see mostly tackled, but for I mean, it seems doable.
Speaker 1:It doesn't seem like we need to get to 95 or something. That's the and probably there's a discussion of. Okay, I'm also imagining which landscapes are most like, are most important to do. First from a carbon intensity perspective. Now, from a biodiversity importance perspective, probably not the same landscapes from a food production perspective, from a risk of food security. I mean, there are a lot of different maps we can, but we're starting to build a technology we can actually start looking at that.
Speaker 1:Okay, where do we go first and why and what makes sense? Okay, you want most carbon reduction, these are the most carbon intensive crops. Or you want most carbon sequestration potential, these are the landscapes where there's most potential in that and the water side of things as well. I think we're starting to be on the cross. We did a whole series on two series actually, on landscape scale, regeneration and what's the technology needed, and we see some examples, but there are a few. But it's starting to accelerate at least, and I'm very happy that in a coalition like yours, that the landscape piece is such a fundamental one, albeit not easy, obviously, but definitely an important point. So anyway, thank you so much, for I want to be conscious of your time as well and thank you so much for the work you do, obviously in coming on here to share about it, and already I hope you have a nice five-year celebration I think it's during Climate Week in New York with the coalition and continue pushing. I would say.
Speaker 2:Thank you so much, Con, for the invitation. It was a pleasure to exchange.
Speaker 1:Thank you so much for listening all the way to the end. For the show notes and links we discussed in this episode, check out our website investinginregenerativeagriculturecom. Forward slash posts. If you liked this episode, why not share it with a friend or give us a rating on Apple Podcasts? That really helps. Thanks again and see you next time.
