Investing in Regenerative Agriculture and Food
Investing in Regenerative Agriculture and Food podcast features 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. Hosted by Koen van Seijen.
Investing in Regenerative Agriculture and Food
110 Marcus Link, Regen farming isn’t enough, we need regenerative enterprises
A new conversation for the series on New Foundation Farms with the CEO Marcus Link, author of "Farming Smarter", about how farming using regenerative approaches is not enough.
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New Foundation Farms is building a regenerative AgriFood enterprise on a thousand acres in the UK and raising 20 million to do so.
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Simply farming using regenerative approaches isn't enough. So what is a regenerative enterprise? What means enough is enough? Radical generosity and nature as your co-worker. And how do you lock in the purpose of a company in an enterprise? This is a conversation with CEO Marcus Link of New Foundation Farms, part of a series where we unpeel the onion, of course regeneratively grown, of New Foundation Farms, building a regenerative agri-food enterprise on a thousand acres in the UK, raising 20 million to do so. Make sure you listen to the end where mark drew the executive chair joins us to share how investors are responding to the concept of a regenerative enterprise Welcome to another episode of In March last year, we launched our membership community to 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. an egg or find the link below thank you Welcome to another episode today with CEO Marcus Link of Neo Foundation Farms. This is part of the series where we dive deep into what a regenerative farming enterprise and food enterprise means. Neo Foundation Farms is raising 20 million pounds to buy a thousand acres in the UK to build a regenerative agri-food enterprise. And I'm very, very happy to have the CEO today, Marcus. Welcome, Marcus.
SPEAKER_01:Such a pleasure to be here, Koen. I really admire your work and I'm not surprised that your platform has become such a central part of the emerging regenerative network, certainly in the English speaking world. Well done.
SPEAKER_02:Thank you so much. Thank you for the nice words to start and didn't put any pressure on this episode. So let's try to hit that bar you just set, but I think we're going to easily manage. I would love to know a bit about your background and why you ended up going deep and in this case, very deep actually in soil.
SPEAKER_01:That's a great question. I have a general entrepreneurial background in different sectors. What they have in common is that they were always at the emerging stage when I was interested in them and it started off with working in the space of renewable energy and the internet at the same time when I was at university and I set up a platform called windpoweronline.com That led me into the whole arena of venture capital, focused on biotechnology projects, which was a big thing in Germany at that time. And what happened there for me was that I was exposed to money and the way it was spent. At the time, the buzzword was business 2-0. This was the new economy. People were really going for this approach of throwing big money at projects and expecting that some of them would yield a high return. And when was this, more or less, just to have an idea of? So this is 1999, 2000. Okay, so
SPEAKER_02:the boom years and the hype and the, yeah.
SPEAKER_01:Just before one of the crashes.
SPEAKER_02:Okay,
SPEAKER_01:yeah. I couldn't quite think my way through this, but it stayed with me. Do
SPEAKER_02:you have like an example of something that you worked on or saw in those years that is an example of this process?
SPEAKER_01:Yes. A very specific event was an evening, a scholarship evening at a big pharmaceutical company that I was invited to where a professor of ethics had come along to talk to the scholarship students about his approach to questions around stem cell research and so forth. And he had a particular approach to ethics, the details of which I forget, but the conversation that ensued and the energy in the room was such that I was absolutely taken by this opposition that emerged between the purpose and the way we engage with pharmaceutical research, the IP that pharmaceutical companies hold, and the purpose that human health that actually seemed to be central or should be central was somehow lost. the professor faced large resistance from those with a financial interest in the business. And that just stuck with me and I went very quiet.
SPEAKER_02:That's 20 plus years ago. And how did that, I mean, the medicine space is extremely interesting, but now we're discussing food and medicine, which is very different. How did that lead you further from wind energy to eventually food and ag?
SPEAKER_01:I'm not sure it is so different. I think that I was already very much aware at the time of that flavoured my interest in what you might call the multiple interconnected crises that we face as humankind today. So my interest in biotechnology or renewable energy was very much around the problems we were facing. I mean, you remember the Kyoto Protocol that takes us back to 1995. What we're dealing with today in terms of climate emergency has been a long time coming. So I was exploring at the same time, how do you make money and how do you solve these problems? My transition Out of biotechnology went straight into organic farming in England. I joined Riverford Farm Foods and my job was to establish the meat box scheme alongside the already successful vegetable box business. And this involved starting with a small scale local farm shop and working with the processes of that farm shop to establish a more standardized product, a meat box that you could deliver safely to the home of our customers and then scale that with a purpose-built facility, growing the supply chain around us, bringing in the IT and the processes and all the technology that's required in order to take orders and process them with quite a complex product, especially when you have to anticipate the volume of meat that you're going to need at a particular time. So I took that from a very small number, around 10 a week when I first joined, to several thousand per week, 5,000 per week when I left.
SPEAKER_02:Wow. And of course, it's extremely tricky. I mean, that planning you mentioned or the anticipate, like this is a cycle of multiple months and potentially a year or more, depending on the meat type. Like that requires a huge planning and a big freezer to a certain extent to not waste a lot or not be without a box or not be without meat for a box.
SPEAKER_01:Yes. And it also, that's the supply side, if you want, how do you manage production and plan all of that? And then there's also the engagement with the customer and what they want and how that works at their end once they have the meet. So that was a real exposure to those two sides that we're also working with at new foundations today. In fact, our business model is directly engaging with those two sides of the issues that agriculture is stuck between.
SPEAKER_02:And what made you leave? Because I mean, I think that the box schemes in not in a negative sense, but are booming these years. And it seems that COVID helped definitely with that. And they seem to have a moment. And what made you decide to go, let's say, one step further? down literally to actually get become part of the farming part as well
SPEAKER_01:yeah another great question i'm entrepreneurially minded so that means i ask my own questions success in a way is not enough i also have to answer to a higher purpose and i felt that at the time i've taken something to a level that it was just complete and i couldn't see a way forward in the way the business was organized so it was very much a question of what do i do next so what i did next at the time was I took my connections I had developed to local food producers, farmers, and so forth, and I developed an e-commerce business that helped farmers and food producers get online and sell their wares and market them and so forth in a way that was as authentic as possible to their particular values and mission. And what I experienced in that hybrid business I set up, which was both e-commerce consultancy and creative agency, that we very quickly got drawn into the world of the glitz and glam of big brands and big platforms and very quickly worked for more London-based projects because they'd worked out it would be cheaper to work with a Devon-based creative agency than a London-based one. But that was, I had a young family and that was fine. But this question of purpose kept coming back. And in the process of doing this, I at some point engaged with other projects, including a research institute that was looking at some research questions around business leadership in organizations in social activism and in agriculture. And they set up a suite of master's programs. And I joined them as the director of communications and helped set up these creditors master's programs. To me, crucial leadership questions. So that was, if you want, on the one hand, it was a change of career. But on the other hand, it was a logical step for me to take the skill of the communications industry into this research question. And from my Riverford time, I was still working on agricultural questions. And one of the master's programs was called Researching Agroecology. And it was fascinating to engage in the educational side and how do you engage with people? How do you introduce a kind of questioning stance? And one of the big things we were working with was consciousness studies and ethical perspectives on business and so forth. So that was another layer that leads to today. And I would say an absolutely crucial part is my meeting Mark Drohl in the school playground at the school our children go to in 2012. I had just joined the school, Mark had just joined the school, and we pretty instantly connected over our shared ambitions in very different parts of the world. And what ensued was a working partnership that was already great right from the beginning and continues to grow. And starting in 2019, sat down together and worked out what are the big problems of the world? How do we address them? And we clearly wanted to work together We decided on regenerative agriculture as a key proposition to address the multiple challenges we face today.
SPEAKER_02:Which, I mean, I think many listeners will agree on. And it's interesting that you've taken it or took it and are taking it a few steps further than just a regenerative farm and really calling it specifically a regenerative agri-food enterprise. And I hope, and we're going to unpack that a bit, it can meet that challenge that you felt more than 20 years ago in that evening with the ethical professor and the other students. So let's unpack a bit what you mean by a regenerative agri-food enterprise and what makes it so different from, I would say, between brackets, a regenerative farm.
SPEAKER_01:Yes, another excellent question. I think we need to start with what do we mean by regenerative?
SPEAKER_02:So what do you mean by regenerative?
SPEAKER_01:So there are lots of definitions out there, but what I keep finding myself going back to is this genius approach of Ethan Solovievs actually to see regeneration as the opposite on the spectrum of degeneration
SPEAKER_02:so just a shout out to friend of the show Ethan I will put the article he wrote on this in the show notes because it's really nice the spectrum I think it's called the spectrum of agriculture but I'll find it and put it in the show notes for whoever is listening and hasn't seen it and keeps getting this question as well like can you give me a definition or what is regenerative agriculture yes I always just send this article and usually it fixes the question.
SPEAKER_01:Yeah, Ethan's really good point is that by defining something, we also assume that we've sort of finished the exploration of it. And in that sense, what we have finished the exploration with very thoroughly so is that of how far we can take degeneration on this planet.
SPEAKER_02:Yeah, we know that pretty well. Yeah, I think we still have something to explore there, but let's not do that. But there is, yeah, there's good data, let's say, and there's a good understanding of what degenerative agriculture or degenerative enterprises mean.
SPEAKER_01:Absolutely. And because of the interconnection of ecology and economy, I think it's really worth pointing out that the size of the climate emergency that we face is interconnected with a global economy. That is something that we've been driving with its roots in the industrial revolution with policies that have furthered exports and all the other stuff that's connected to a global economy. And so we have these two big pieces East facing each other, climate change and global economy.
SPEAKER_02:And we need to tame, I wouldn't say tame, but somehow dance with both.
SPEAKER_01:Yes. So I think that regenerative agriculture has in its essence a solution to offer here because it is focused both on the ecology and on profitable business at the same time. And that seems to many people a paradox. If you look out there into the world of ESG and people planet profit into these articulations
SPEAKER_02:just for let's explain the buzzwords as well what do you
SPEAKER_01:okay yeah sure so ESG is short for environmental social and governance and it's a form of labeling businesses that have an agenda beyond profitability and it's often used in conjunction with investment so I would say it's the buzzword of the moment everybody is trying to somehow make their portfolio more ESG The observation there is that somehow we have these ingredients, the people, the planet and the profit, but we're not integrating them. Rather, it is, if I just exaggerate it a little, we put the profit first and then we have a look how we invest some of that profit into people, as in social causes. and in environmental causes. But we're not integrating the actual operations of the business with a concern for people and a concern for the environment as much as it could be. Whereas in regenerative agriculture, if we just keep going back to that, we have this immediate concern. There's both a concern for the profitability of the operation and a concern for its environmental or ecological impact. And the two are absolutely related in the activity of agriculture.
SPEAKER_02:And the people part? Is that by definition or do we have to add it into it?
SPEAKER_01:Well, I think that affects anybody involved in farming. We'll be aware that it usually doesn't involve many people. And those people who are involved, they usually work very hard. And it's the hours they work, also in isolation, and the economic pressures they face, amongst many other things, that lead to, for example, an increase amount in mental illness and depression
SPEAKER_02:and suicide yeah but you're saying that let's say if we do regenerative agriculture well then you actually take care of the esg of the triple bottom line or whatever we want to call it almost not automatically but it has to be part of that like it's sort of you cannot escape it's not that we okay we make a lot of profit with extractive agriculture and then we use that to clean up our act just a bit and we can call it better than the standard now this is going to the heart of those of the big issues basically what you sat down with Mark to say, okay, what are the big issues in the world? And a lot of them, or most of them actually come back to doing agriculture well.
SPEAKER_01:We could look at the extreme positions on this. For example, the shareholder system is one that's extractive in terms of profit. It's interested in a profit and then it removes the profit from the immediate organization. So it externalizes that in one way. On the other hand, if you look at the human potential movement, you find an allergic reaction to words like profit or in any kind of corporate speak. These are the two extremes. And I would say regenerative agriculture somehow sits in the middle of these two because it integrates a strive for profit and at the same time, a strive for ecologically positive impact. And it realizes that by understanding that when we put natural systems underneath agriculture, they are at the same time ecologically positive and profitable. So maybe we need to understand unpacked that direct connection a little bit.
SPEAKER_02:Yes, because it sits in that tension also, because it is an interesting statement and saying, okay, agriculture can be profitable. I already, even saying that, I already noticed many people really frowned upon it, like it can never be, et cetera, et cetera, et cetera. And saying it can be profitable and it can have an ecological base, actually the two are connected, is something we need to explore. So let's explore profitability. Let's explore the parts there, because it feels like it sits in that tension. between ecology and economy. And it sits there actually quite comfortably, interestingly enough, which is very weird.
SPEAKER_01:Yes, it is. But let's take a dive down into the soil first and have a look at what happens around plant roots. What you've got is that a plant with its green leaves transforms solar energy by taking carbon dioxide from the air and water plus the sunlight, and it creates complex sugar compounds. And it then gives part of those out into the soil through its root system. If you're talking about healthy soil, you've got a larger number of fungi and microbes around this. And then on the next level up, you've got protozoa and nematodes who literally graze the microbes and the fungi. And what they're engaged in is a sort of trading platform. What they're trading is biologically available nutrients in return for biologically available carbon. So there is the ecology at its very basis, when you start off with sunlight and connect nutrients into this, you've actually already got economy it's a trading platform and that's what ecology is
SPEAKER_02:and the carbon is the currency basically
SPEAKER_01:carbon is the currency but the exchange is nutrients so what the plant can provide is the translation of sunlight into biologically available energy in the form of carbon whereas the subsoil life the web of life under the soil provides everything including water it provides nutrients that sometimes travel from a significant distance to the plant roots
SPEAKER_02:which is something I mean just that significant distance is absolutely fascinating but so basically you're describing an economy like in the soil around every plant around every root around every tip of every root a small economy is buzzing and communicating and trading and basically running it's between brackets business
SPEAKER_01:that's right that's how I think it's absolutely fair to call that an economy because it is a trade and the trade benefits all the partners in the system
SPEAKER_02:which is not always the case in our economy yeah
SPEAKER_01:that's right if somebody starts to dominate it creates an imbalance which immediately undermines the existence of one or the other contributors in the game and that in a way is a blueprint for how we could imagine an economy but at the same time if you now look at the human interference with that blueprint we have a degenerative effect on that economy we are extracting nutrients from this system and what we're putting back into the system is not what the system needs that's the fundamental problem with conventional industrial agriculture. And I would say that it actually goes back a long time. And it goes back some 13,000 years in human history. If you look at authors like Yuval Noah Harari and Jeremy Lent and others and trace this back, the agricultural revolution is a phenomenal bifurcation point in human history.
SPEAKER_02:Yeah, there's some very interesting research. I mean, Against the Grain is fascinating because obviously what we know of agriculture and of history is what is written down. down and not the rest so the chances that we ignore a big chunk of history of a lot of people that never settled down for agriculture and were much let's say healthier and happier is quite large I mean it's a very interesting and then the whole indigenous movement or the fact that many actually were able to farm quite consistently and quite long but never were documented and we just don't know I mean yesterday discussion with Sarah Mock that probably is out this interview is out before like she will be out before this and saying yeah they're are tribes, there were tribes in Mexico that we know of that farmed for 4,000 years consistently in a very, very difficult environment and fed their people. And there are not many others, like we as humans, we don't have many records of doing that, which is like not a few generations, not one or two, not seven, no, 4,000 years. But it's very, very, very difficult because most of what we've done in terms of ag has been destructive, faster or slower. Like that's generally seems to be the, like we've been degenerating at some point at some point and it's it usually collapsed so it's a 12 or 13 000 year old story why is it different now like what's the because we came to the realization probably a lot of thinkers have done that before as well and somehow we never managed to get out of that except for a few exceptions where we have managed landscapes in a in a very different way but we also forgot that or we basically really really went against it and forgot how to do that
SPEAKER_01:in that sense i can only speculate what the difference is but i would put that down to something we might call our scientific understanding or understanding what exactly is actually at work, especially in the soil. It's only in this 20th century that we've now got the articulation of ecology. I mean, in fact, I forget who said it, but I think it's Gordon Conway who said that ecology is the second great revolution of biology in the 20th century after genetics. We focus very much on the potential of genetics, but I think until now it's fair to say that ecology hasn't quite got the respect it's due
SPEAKER_02:and the attention yeah and for sure not the investment I think it's fair so now we know and we interviewed Elaine Ingham and just the soil food web and just the sheer life in the soil has been known we knew it and I think many intuitively knew a lot of it but we've only seen it now or very recently hopefully that makes a difference but we know a lot of things we know I mean Kyoto goes back in 95 and we still haven't figured out a lot of things around emissions so I'm not so sure that just knowing is enough.
SPEAKER_01:I think you're absolutely right. One of the problems we've got is that we are locked into an institutional logic that is successful enough to keep going, even though we are becoming more aware of the problems that this institutional logic brings with it. So it's how do you change? So one of the fundamental questions we're asking at the captured by and change the institutional logic that we're held hostage by. Because I would say there's a difference between the individual agents and the institutions we are a part of and how they prevent change, even though we ourselves may be willing to change.
SPEAKER_02:So let's unpack that a bit on New Foundation Farms. What does it mean that the piece of regenerative enterprise, because it is a business, it is an enterprise, it is an institution or it becomes or it will become or hopefully, and What prevents it from going the same route as all the other institutions we ever built, basically?
SPEAKER_01:That's the question. So our theory of change starts off with a question. How do you, in a short space of time, have the maximum impact? So how do you get a flywheel going that it becomes infectious, so to speak? And our observation is that innovation at scale has usually happened through the involvement of some kind of enterprise for which finance has been enabled. A good example for that is the change from fossil fuel-based power production to renewable power at scale when it became possible to connect finance directly into large wind parks, large solar farms. And the research was already there for many years prior. We knew how we could do it differently. We had powerful lobbies that prevented the change because their business was successful. Why change it? And it was then the innovation through these disruptor enterprises that went to scale and introduced other ways of doing things.
SPEAKER_02:The Sun Edisons of this world and a shout out to Jigar Shof and many others that connected finance to scale and to solar and to wind. And I see actually many, and you're one of them, that are starting to enter the regenerative ag space coming from, with a lot of experience, coming from renewable energy or has been active in renewable energy, which is very exciting because there's a lot to learn there.
SPEAKER_01:Yes. And you also... In other spaces, you see the switch from landline telephony to mobile phones, which is connected with other technology innovations as well, but the same principle. You've got large-scale disruption of the way we live, of the way we do things, the way our power is supplied, the way we communicate and so forth is changed through enterprise. We see a significant role for this in the private business space. And for us, that is connected to scale. Dale. To just bring this back to the human potential movement, you see a lot of work in permaculture and with a lot of organic work that's gone here. And often you see that this is connected to small. There are some other examples, but usually they are small and worthy projects. And the theory seems to be there that a lot of small makes big. And we don't think that's happening fast enough or big enough.
SPEAKER_02:I know some people that would say it would have happened already. because many of these have been on it for 10, 20, sometimes 30 years. And yeah, we haven't seen, let's say, the hectares or acres under management drastically change enough.
SPEAKER_01:So a regenerative enterprise, just to connect this back to regenerative and my definition earlier of regenerative being the opposite of degenerative, what such an enterprise does when it is regenerative, it considers the ecosystems or systems it engages with. So for example, its employees, its community that it immediately affects, and maybe its national economy that it is engaged in, but of course also the natural resources it affects. And when you're running an agri-food enterprise, that of course is the agricultural interface directly with the soil that you're working with. It is the employees that work for you. It is the customers who come to the business and so forth. And what we've put forward is a proposition that interconnects, that integrates all of these systems in a way that is regenerative on balance. So the net effect of this is a regenerative effect.
SPEAKER_02:It sounds so good to be true. Can you really have both? You can have an ecology and economy and you're saying in regenerative agriculture, when done well, you can both eat the cake and sell it to you to butcher the metaphor a bit. What do you say to naysayers that say, yeah, that just sounds too good to be true. We've tried it in organic. Permaculture is very small. You can do it, but then it's a lot of personal involvement and hand work, like what does scale look like in here? And should it be so big? Like, what do you say to people that basically say that sounds too good to be true?
SPEAKER_01:Well, I have a lot of sympathy with that position, but I just think it's fundamentally flawed because it doesn't appreciate the actual science, the actual understanding of what ecological health is. So without wanting to be negative about organic in terms of its intentions, one of the fundamental problems we have with organic is that despite its intention it can still be ecologically destructive. Essentially, the organic paradigm is industrial farming minus the chemical inputs and with a few additional techniques. It is not fundamentally about the pursuit of an ecologically positive engagement with nature. And basically there it falls short. That's where it falls short on the one hand. On the other, farming like that is also much harder. Soil fertility doesn't just go away as a problem. You have problems in creating that soil fertility. And when you haven't got the fertilizer, but your fundamental approach is essentially conventional industrial, then you're going to somehow make that happen. And that makes organic farming riskier. And that is also where the idea of the premium comes from in organic in principle, is that essentially it's riskier and therefore it is worth more because essentially it might go wrong.
SPEAKER_02:And you're saying in regen ag done well, it doesn't have to be risky. It's actually... less risky it can be equally or it can be let's say profitable That's the angle you're taking.
SPEAKER_01:Well, so how does regenerative agriculture do this differently? And this is a question of how do you go about soil fertility, for example, while at the same time creating a saleable product?
SPEAKER_02:Because you're still harvesting something or removing something and thus extracting. Like you're still removing the plant in some cases, in cases of annuals, that still disturbs the soil to a certain extent and takes away a bit of that economy that was happening there around the root.
SPEAKER_01:That's absolutely true. would argue to a certain extent that say birds can have that effect and locusts might affect your harvest in other parts of the world and so we have those kind of phenomena but when we're talking about the day-to-day we have a situation where in regenerative farming what we're doing is we're interconnecting different layers of biological activity that can work in such a way that they are at the same time product and input so that means we're creating synergies where, for example, the way we plan our grazing provides the in-farm fertility for our land, while at the same time, it raises the beef that we sell as meat.
SPEAKER_02:So you can bake the cake and sell it at the same time, when done well?
SPEAKER_01:Yes. Well, the issue with that metaphor is that it just doesn't apply in that sense, because biology just works like that. It is the human mind that creates a paradox. Nature already does this. And we have a history of a flawed relationship with nature since we started agriculture 13,000 years ago because we always lived in this dependency on our form of engagement with nature requiring a return which was mostly successful but sometimes devastatingly unsuccessful. Now we understand and it is literally now we understand from a scientific perspective how this works in the soil and how you can integrate these different layers both for profit and for economic ecological health. And that is how economy and ecology come together. That's what you describe as having your cake and eating it.
SPEAKER_02:Yeah, meaning that we now know how to manage an ecosystem or facilitate or help or be part of it and create an abundance that you can still harvest and you can sell, which means, let's say, the dollar or pound economy or the euro economy on top of the land works. But at the same time, it's not extracting, it's actually regenerating the soil. So The economy in the soil also works while you're still having to sell food and fibers, which is mind-blowing. Just very simply, for 12,000 years of human progress in agriculture, that's a mind-blowing thing, except for a few exceptions here and there that we unfortunately didn't really document well. We could have learned a lot from that, but we didn't. That's a huge step change, basically.
SPEAKER_01:It's a huge leap, and it also conceptually allows us to now connect to previously seemingly separate worlds of profit and purpose or economy and ecology in this grounded way right in the soil and to just pick up your metaphor that the problem or the reason that metaphor doesn't quite work is because it's essentially two sides of the same coin it's about what the cake is made of and then eating it right is it artificially made or is it a regenerative cake if it's a regenerative cake it tastes fantastic it's nutrient rich and it's actually profitable for the people who made it
SPEAKER_02:so it is profitable you are building this regenerative agri-food enterprise. But then coming back to an earlier question, how do you prevent it that this enterprise or institution basically goes the direction of one other enterprise? Is it just that it's based on ecological sound soil? Is that enough to prevent it? Or do we need to organize the enterprise differently? I know the answer to the question is probably the second, but let's unpack that. What does an enterprise need to look differently and not just be the normal, We all know and we all, I wouldn't say
SPEAKER_01:hate, but let's say have, we know the issues. and the farming sides of the business. For us, after exploring this quite extensively, what we found is that structures that lock purpose in that we have here in the UK don't necessarily do it in a way that enables the profit aspect of the business in the way that we want it to. So our solution to it has been to focus on the articles of association and how we come together in them in order to define very clearly what the roles of the different stakeholders are. So how does money come How does investment come in? How is that rewarded? How is the company managed? Who gets a say in that management? How do the employees get rewarded for their work? And what is differential in the pay levels between the lowest and the highest paid worker? So we've considered what regeneration might mean for all these different stakeholders in the business governance structure.
SPEAKER_02:I picked up some of that in the data room, which was fascinating. And I would love to just touch upon that. Like, first of all, there's written enough is enough. Explain, what does that mean?
SPEAKER_01:Well, the classic or traditional business model we're used to is, if you allow me to exaggerate, you end up with an arm wrestle between the founders and the investors in a business. Purpose aside, it's about who gets how much of the cake. as opposed to how do you move this forward at pace and scale? So what we've decided is that the solution to this is look at what we call fair return. That's one side of the equation. So what is fair return for an investor? What does that look like? And then the other side of that is how do you distribute the wealth or the profit that emerges? And our solution to that has been to, right from the start, write in articles of association, be clear that the wealth is distributed between the founders, shared with the employees and shared with society in equal measure. So we're not talking about a participation scheme for employees that's worth a few percent. We're talking about a participation scheme that initially is worth one third of the business profits and society participates through a particular mechanism in another third of those profits of the business.
SPEAKER_02:All of this we can spend an hour on, but I want to be conscious of that as well and I went I have a few more so radical generosity
SPEAKER_01:It's a question for us that Mark and I wrestled with quite a bit is you could say that this agricultural model over the last 13,000 years has created a... We live with fear of not enough. And this not enough informs a lot of the business practices we work with. We essentially want to ensure a maximum return. We want to hoard as much as we can somehow in case there is not enough is always somehow where that comes from. Now, if you flip that around and you consider nature as essentially an abundant being. She makes all of this possible. And if you look at the regenerative principles that work in the soil, you'll just see the generative, generous nature. And this is radical, not only as a concept for us humans, it's radical in the true sense of the word in that radical comes from the Latin word radix, which is essentially the root. Radical is about taking things back to the roots of things So in that sense, radical generosity is about a generosity that goes back to the roots of things and really thinks it through properly. So it is both about a notion of sharing and distributing wealth in a different way and not saying just because we founded this, we get the most. It's enough is enough. That is the way to say at some point, you just have enough. You couldn't possibly spend more money in a meaningful way. Rather, we could put it to use meaningfully elsewhere. And this is how these values that we've articulated come to bear.
SPEAKER_02:And the last one, nature is our coworker. I mean, we've talked about it before, but if you had to summarize that What does it mean to you? And how is it such a central part in the regenerative enterprise?
SPEAKER_01:I just love your questions. You wrote these,
SPEAKER_02:not the questions, but this is coming straight from your... I love it because I picked it out of it and everything that piqued my curiosity. And nature is our co-worker. I've known some companies that basically made nature their CEO. And we just had Brad of Willicroft, a vegan cheese company on, went live yesterday, I think. And it's a very interesting notion, but I'm very curious what you mean by nature is our co-worker.
SPEAKER_01:There are lots of layers to this. do you build a higher wall right so we're going to build a longer table
SPEAKER_02:that is a fascinating but i'm just thinking how that looks like no it's uh i've never heard somebody say that that's very interesting
SPEAKER_01:of course you build a longer table
SPEAKER_02:yeah but then you need more
SPEAKER_01:food yeah i think it's some meme i picked up somewhere which goes like this when you have more than enough do you build a higher wall or do you build a longer table that's a really nice way to summarize it yeah and that table starts with the natural principles that enable life on this planet without which we wouldn't be here and so i think it's just putting into perspective the relationship between us and are we separate from nature and our position is very much that we're actually a part of nature
SPEAKER_02:yeah I think Charles Eisenstein would say this all starts with a great separation not to quote him and because for sure I butcher something there but this is yeah at the center center of regeneration is the understanding that we're part of it and thus we have to deal with it and we have to deal with it in a good way I'm not saying it's a bad thing but we have to realize that there is no separation between us and nature. And that probably reflects in region ag more than anywhere else, but it also reflects in a lot of other places.
SPEAKER_01:Yes, I would say that the ultimate vision, and I'll borrow this again from Ethan Soloviev, because he just is so articulate on this subject, is the ideal, is the understanding or imaginative capacity to see the co-evolution of human systems and natural systems. That requires that word imagination is quite important because the whole connection to nature and how we work with her is very much dependent on our inner landscape. So we have to work on ourselves and our own attitudes here as much. This is why we've put so much effort into what is a regenerative enterprise. How does it work? How does it deal with debt, wealth? How does it grow? How does it scale, et cetera?
SPEAKER_02:I think it's something we don't talk about enough. And that's why we're doing these interviews. That's why we're digging deeper. That's why we're peeling the onions. If you could wave a magic wand, so you had a magic power and change one thing only in the agriculture or agriculture and food or land use, I mean, you can make it as broad as you want, but you only have one wish. You can change one thing. What would that be?
SPEAKER_01:I would like to convert what's called baseline reset syndrome, which I'll explain in a moment, into something that I would call a kind of double vision, where we see both what's there right in front of us, and we see its potential over time. overlaid at the same time. Now, baseline reset syndrome is a condition, you might say, with which we all have to battle. We are born into the world and we therefore don't know what potential could look like because all we see around us is the world as it is. And this leads to the phenomenon that people think of nature as what they experienced when they were children. So when they grow up, they might get to see the degeneration they experienced in their lifetime, but But then we don't naturally extrapolate that to the potential of what this natural landscape could look like. And especially in this green and pleasant land on the British Isles, we are deluded by the fact that it is quite green here. But we actually live in one of the least biologically diverse Western countries. There's a very interesting report by the RSPB in 2016 that ranked Great Britain or United Kingdom in 189th place out of 220 reviewed countries. It is green, but that doesn't mean that it is ecologically healthy. It is a very forgiving climate and a very forgiving soil that makes this possible. And so we think it is healthy when really it is not. We are suffering boiled frog syndrome. So the one thing I would like to change is this baseline reset syndrome so that people can see what's there and what the potential of it is and let that awaken their creative capacities.
SPEAKER_02:It's sort of I would even add to that a capacity of looking back as well, because I had a very interesting discussion with Isabella Tree, I will link it below, on the illusion we have that Europe and a big part of the UK, if we wouldn't be there, it would be a giant forest. And actually it would be a savannah-like system, or it was a savannah-like system, and it potentially would go again, like very similar to what we see in Africa, et cetera, obviously with different species, et cetera. But we don't even have an idea of what it used to be, let alone we can imagine what it could be. We'd only see now. So it would be some kind of augmented vision that you can both look back and look forward to what the potential is of a place, of an ecosystem, of a watershed, of a biome, etc.
SPEAKER_01:Exactly. It's a question. We are very good at projection. We imagine some better future or some better past, but we find it very hard to just imagine a really good present moment in a present healthy landscape. Good
SPEAKER_02:point. and how chaotic and how beautiful and how interesting and abundant that could be we really really struggle until we see until we visit actually some projects and you think okay wow this is possible and why is the neighborhood not and then stuff starts but yeah unfortunately only the lucky few get to visit many of these but that's obviously why you're going to be so open and you are so open and transparent to give that experience to many people what could be in on an island like the uk
SPEAKER_01:yeah absolutely let's find out how far we can take regeneration.
SPEAKER_02:We have actually Mark draw back on the show to reflect a bit after our deep discussion with Marcus on what is a regenerative enterprise and how does ecology and economy actually can dance together? And what does it mean for funding? What does it mean for investors? How have the investors over the last weeks, as you have met with many, many, many, many conversations, what has been the response from investors, Mark?
SPEAKER_00:Hi again, Koen. It's been really interesting because when you start talking about regenerative ag food enterprise as being about regenerative food and regenerative farming at that point you're kind of ticking all the conventional boxes but then you say done within a regenerative framework and people go, oh, that's interesting. What's that? Broadly, you get two kinds of response. The first kind of response is from people who are intrigued and excited because you trigger something that many people who are working with finance wrestle with, which is the acknowledgement that the way organizations are designed is not always entirely aligned with creating the kind of outcomes that we look for. So it's a really positive response. Oh, this is really interesting and we want to explore this in more detail. On the other side of the equation, closer to what I would call more the mindset that has a conventional thought process, but layers on an idea of capital being deployed in a more socially and environmentally friendly way, then the conversation can be quite challenging because then it's, well, how does this fit in the box? Where do I put it? What's the exit? Yeah. This isn't a tech company where the idea is you put your money in 10 years later, you get a 20x exit and sail off into the sunset with more wealth than you started. It's about long-term fair returns. And that obviously means you're appealing to, if you like, really forward-thinking investors who have an interest in systemic change and see value in getting a fair return for it, but not this being the next big unicorn.
SPEAKER_02:And what's, let's say, the breakdown? I mean, obviously, you're talking to a subset that is already interested in agri-food, but what is the percentage? Is it half is it a quarter that that really is both interested and then seems to get and also be able to find a book somewhere for a regenerative enterprise or is it a very very small percentage what do we imagine as an audience
SPEAKER_00:yeah i think the good news is that i would say it's 75 25 in a positive direction and the reason is because as far as we see you don't have to be a rocket scientist to figure out that this kind of direction of travel makes a huge amount of sense so if you've If you can figure that out, then you're going to be probably positively inclined to want to see how you can be involved. It's more the case of the other end of the spectrum. You do have a smaller group of people who are stuck in, if you like, the boxes that they are used to putting things in, who find it harder. But the good news is I think most people who are investing in this space are interested, innovative, curious about possibility, and somewhere in their consciousness, if you like, they've already been rescued. with some of these bigger questions about how do we design companies in a way that shares success more fairly and builds a better society.
SPEAKER_02:What have you learned in this past weeks, basically, of sharing this story, getting a lot of questions from investors that potentially are interested to put money to work? What would be your big lessons learned? Or what are you taking back, basically, to the enterprise?
SPEAKER_00:Let's go to surprises
SPEAKER_02:later. What are your lessons
SPEAKER_00:first? So the what we're setting out to do. The responses have been very positive. I recognize we seem to have the team to do it and the capabilities and the plan. And then the second thing we've learned is that it's really important to make sure that the framing of the investment proposition is really clear and easy for people to say yes to within the constructs that they have for the choices that they make with their capital.
SPEAKER_02:Yeah, we discussed it last time as well. You're innovating on so many different pieces that it needs to be crystal clear. And that obviously is something that it becomes more clear over time after more discussions and tweaks, et cetera. And we'll come back to that. And what's the biggest surprise from having many conversations with people that are managing their own money, but also other people's money? What has really surprised you in this journey in the past weeks?
SPEAKER_01:So what we discovered is that there are different ways about thinking or thinking about money in different geographies. So having conversations with with continental investors, there is a different engagement, not negative or positive, just simply a different kind of creativity about how money can do its work when faced with a question of how do you maximize impact. So there was a stark contrast I noticed in the reception of the project and the way people engaged.
SPEAKER_02:You mean between the UK and let's say continental Europe?
SPEAKER_01:Yeah, well, I would broaden that out a bit. I would say there's something, certainly in these conversations, There's an English speaking world mindset around how finance works. And then there was a continental European approach, which has more than once somehow looked at, for example, saying that equity investment is essentially the same as free grant money, which, you know, as a concept in the UK would be a polar opposite. Whereas the idea was, well, you know, you put when you're equitory investing, some of your investments work and Some of them don't. It's a bit like planting trees. Some of them make it. So would you consider equity investment as a form of impact grant funding? So that's a fascinating response that took me a moment to appreciate.
SPEAKER_02:And to process, yeah. Has that shifted something or, I mean, that's just basically you have to explore and explain that, but that hasn't dramatically changed anything in the offering or in the way you talk about it in the conversations you had after that?
UNKNOWN:Yeah.
SPEAKER_01:Yes, I would say as in generally this part, this aspect, these past few weeks of our roadshow have been about having as a wider range of different kinds of conversations as possible in order to get different reflections in order to then go back and have a look at, is it working? How's it working? And how might we refine this? And I would say the first question we've totally answered, yes, it's absolutely working. The feedback is overwhelmingly positive. where we need to refine this is with how do you take the 20 million pound ask and break it down into different contributions to what we are overall achieving. And the big split there, for example, I would say is between the money we're asking for, what you might summarize as land and infrastructure on the one hand, versus the money that's going into core funding. Depending on whether you take an accountant's view, you would call that the operational expenditure, OPEX, or you would call it the developing the enterprise funding. So that's been our major realization that there is a different approach for either of those pots.
SPEAKER_02:That needs to be clear. Yeah, go ahead, Mark.
SPEAKER_00:Yeah, there's also something really interesting that is about language that people use. So two investors with apparently the same profile and apparently the same interest in the subject, the one will be a conversation all about impact with almost nothing about the financial metrics and the other will be primarily about the financial performance with the impact not being part of the conversation at all and the lesson there is very much around the degree to which even when you're talking about the same subject with people who apparently look like they're doing the same thing from the same starting point the nature of what we as individual human beings are really interested student is very different
SPEAKER_02:that's fascinating and it's impossible to predict probably like you wouldn't have guessed that going into that call
SPEAKER_00:no so you can walk into I'll give you an example you can walk in you know two foundations that we've spoken to without naming names who are interested both from the point of view of grant funding and the potential of this to be part of the returns in their endowment the one was all about the accounting and how the numbers stack up and you know very deep detailed lines of the financial model and the other was all about you know, the metrics we use for impact. And these are the kind of things you discover as you go into these conversations. And everyone's different. Yeah,
SPEAKER_02:you need to be ready, be ready for both. Yes. I want to thank you both for this short update on the funding side and how people are responding to the regenerative enterprise piece. And thank you, as always, for your time and very much looking forward to see how this evolves, develops and goes forward. Looking forward to it, Gun.
SPEAKER_01:Likewise. Always a pleasure speaking to you. thanks so much for joining us on the journey
SPEAKER_02:we didn't get a chance to cover it in the interview but if you want to know more Marcus co-authored together with Tony Graham a report for the food farming and countryside commission in the UK called farming smarter the case for agroecological enterprise with a subtitle agroecology is good business if you would like to learn more on how to put money to work in regenerative food and agriculture find our video course on investing in regenerative agriculture dot com slash This course will teach you to understand the opportunities, to get to know the main players, to learn about the main trends and how to evaluate a new investment opportunity, like what kind of questions to ask. Find out more on investinginregenerativeagriculture.com slash course. If you found the Investing in Regenerative Agriculture and Food podcast valuable, there are a few simple ways you can use to support it. Number one, rate and review the podcast on your podcast app. That's the best way for other listeners to find Thank you so much and see you at the next podcast.
