A Material ESG Risk
Industrial agriculture contributes to:
- Up to 34% of global GHG emissions
- Rapid biodiversity and topsoil loss
- Water stress and climate vulnerability
As these risks intensify, regulators are tightening disclosure requirements, from SFDR to TNFD and ISSB. For investors, this means that how food is grown has direct implications for portfolio resilience and overall regulatory compliance.
Regenerative agriculture offers a pathway forward towards improving soil health, biodiversity, and water use, while also supporting long-term value creation.
From the UK to Kenya: International Proof Points
In the fields of Oxfordshire, Andy Cato – former Groove Armada musician – walks among grain he grows using regenerative methods. His company, Wildfarmed, partners with over 150 UK farmers to improve soil health and eliminate chemical inputs. Their products also now reach Tesco, Waitrose, and Nando’s.
Cato’s journey is one of many signalling a growing shift in agriculture – and furthermore a clear opportunity for asset managers focused on ESG integration and stewardship.
Fellow B Corp, First Milk, a British cooperative dairy, is rolling out regenerative protocols across its farms, subsequently aiming to sequester 100,000 tonnes of CO₂e per year by 2025. More on First Milk
In Mount Kenya, farmers Enos and Christine improved crop yields and community well-being by adopting regenerative practices with support from the Rainforest Alliance.
Since embracing regenerative agriculture in 2021, Enos has witnessed a remarkable increase in production. This is thanks to his efforts to reduce reliance on external inputs; nurture soil health; and replace older, disease-prone tea varieties with drought-resistant variants.
Putting aside monoculture techniques in 2022, Christine now grows avocados, macadamia, mangoes, and bananas alongside her coffee. These plants significantly enrich her farm and her family’s income, providing much-needed shade for her coffee trees. More on Mount Kenya farmers
These aren’t just anecdotes, they’re emerging engagement and investment themes in significant portfolios.
Indeed, over the last five years, regenerative agriculture has gained traction among institutional investors. In 2021, Union Bancaire Privée (UBP) launched its Biodiversity Restoration strategy, which includes exposure to regenerative farming practices as a tool for ecosystem recovery. Meanwhile, AXA IM has committed over €500 million to natural capital strategies, including regenerative food systems that improve soil quality and farmer livelihoods. Schroders and Nuveen have also similarly invested in agri-transition projects, focusing on sustainable land use and circular agriculture models.
Mirova, in partnership with the Rainforest Alliance, has committed to scaling up regenerative agriculture and sustainable land use projects across Africa, Latin America, and Asia. They aim to invest up to $20 million in selected projects, firstly focusing on restoring soil health and enhancing biodiversity.
These moves reflect a broader shift: as food systems face scrutiny under TNFD and nature risk disclosures, asset managers are therefore turning to regenerative farming as a lever for both alpha and impact.
An Opportunity for Asset Managers
This is where stewardship teams come in. Engaging portfolio companies on regenerative strategies specifically supports:
- Reduction of Scope 3 emissions
- Biodiversity and soil management
- Long-term supply chain resilience
However, engagement needs to be tracked, benchmarked, and reported. Maanch’s Engagement Tracker also helps asset managers:
- Log and measure stewardship outcomes
- Align efforts with SFDR, TNFD, and SDG targets
- Report transparently to clients and regulators
This transforms qualitative conversations into quantifiable insights.
Measuring What Matters
At Maanch, we advocate for evaluating decisions through Net Societal Impact (NSI), measuring combined environmental, social, and governance effects. Regenerative agriculture aligns with NSI by:
- Sequestering carbon and restoring ecosystems
- Strengthening rural livelihoods
- Encouraging ethical supply chain governance
It doesn’t just reduce harm, it creates net-positive value.
Conclusion
The food and agriculture system isn’t a niche ESG issue. It’s a systemic priority with implications across portfolios. Regenerative agriculture offers a tangible, investable solution to climate, nature, and subsequently social risks. For asset managers, this is about more than values, specifically it’s about fiduciary duty. Are you meeting yours?
