The FAIRR Initiative recently released a groundbreaking report titled "The Four Labours of Regenerative Agriculture." This report is the first of its kind, focusing on systemically assessing the growing number of regenerative agriculture commitments across publicly listed agri-food companies. It aims to understand whether these commitments are meaningful enough to deliver against climate and nature goals. The report assessed 79 publicly listed agri-food companies with a combined annual revenue of USD $3 trillion, equivalent to nearly a third of the global agri-food sector.
The Importance of Regenerative Agriculture
The agri-food sector is responsible for a third of global greenhouse gas emissions and is the primary driver of biodiversity loss. Regenerative agriculture has gained traction as a way to mitigate these environmental impacts. It focuses on positive environmental outcomes, including reducing greenhouse gas emissions, contributing to carbon sequestration, building resilience to climate change, and improving soil health, biodiversity, and water availability.
The Four Labours
Labour 1: Transparency
The report identifies a lack of transparency in company ambition levels, the agricultural practices being pursued, the scale of commitments, and how success will be measured. Companies need to be clear and transparent when communicating their regenerative strategies and be inclusive of climate, nature, and social outcomes to avoid a siloed approach.
Labour 2: Accountability
With no universally accepted definition of regenerative agriculture, it becomes difficult to hold companies accountable for their commitments. This lack of formal definition can create difficulty when assessing corporate commitments and related disclosure to understand ambition levels and progress being made.
Labour 3: Investment Risk and Return
The report views the issue through the lens of investment risk and return, emphasizing that a failure to define and deliver on promised change could soon prove costly. Investors must therefore establish what the company is aiming to achieve with its regenerative agriculture initiatives.
Labour 4: Stakeholder Engagement
The report draws insights from a broad spectrum of stakeholders, including investors, subject-matter experts, regenerative farmers, and companies. It emphasizes that outcomes sought from regenerative agriculture are scattered with a distinct bias towards environmental outcomes relative to socio-economic considerations.
Thematic Areas of Assessment
The report evaluates company commitments based on five thematic areas:
Outcomes: Whether companies disclose the outcomes they seek, covering aspects like carbon reduction, soil health, and water availability.
Targets: Whether companies have quantified targets or merely state their intent.
Strategy: The overall strategy adopted by companies for implementing regenerative agriculture.
Company-Specific Definitions and Initiatives
Unilever: Focuses on localized solutions by working with farmers and suppliers on different crops and geographies.
Nestlé and Barry Callebaut: Pay farmers in Ghana and Ivory Coast for the survival of planted trees as part of their ecosystem services.
Compass: Engaged in a pilot project with the Soil Association Exchange in the UK to assess baselines against various environmental factors.
Implications for the Industry
The varying definitions and practices among companies underscore the need for a standardized framework for regenerative agriculture. Without a universal definition, it becomes difficult to measure the effectiveness of these initiatives.
Good Practices
Companies like Grupo Bimbo and General Mills are emerging as leaders in implementing good practices in regenerative agriculture.
Role of Investors
Investors can play a pivotal role by demanding better transparency and accountability from companies. They can also assess the impact of regenerative agriculture on their portfolios and offer financial incentives for positive outcomes.
Conclusion
The 2023 FAIRR Report serves as a wake-up call for the agri-food sector, emphasizing the need for meaningful commitments in the realm of regenerative agriculture. It provides a comprehensive framework for understanding the corporate landscape of regenerative agriculture initiatives and serves as a valuable resource for investors, policymakers, and companies alike.
For the full report click here