With a new decade comes a new era of sustainability leadership.
The 2020s herald a pivotal chance to deliver on our great climate, environment and development challenges, and the scale and pace of change will require truly transformative thinking. We will need to move beyond efficiency and doing less harm, and base strategies on new goals that ensure business success also meets the needs of people and the planet. It’s time to step up a gear or three on our journey toward a sustainable future. But what does this mean for how we do business?
At the heart of this shift is a move toward “regenerative” rather than just “less extractive” business strategies. With growing public commitments to “carbon zero” targets, businesses are refocusing on how to work in ways that put back more into society, the environment and the global economy than they take out. This sounds like an abstract goal on the surface, but in real terms, it is a powerful reframing of mindset and action.
Organizations taking this approach share an ambition to grow their brands, have strong financial performance, attract the brightest talent and, most important, be future-fit; but these thriving organizations also deliver benefits that align traditional business boundaries of profit margin and shareholder value with wider societal goals.
One of the most impactful areas for intervention is in agriculture. Any business based on agricultural raw materials is vulnerable to increasing insecurity and volatility of supply, as weather patterns shift and natural resources dwindle.
The Nature Conservancy estimates that the United States loses 996 million metric tonnes of soil through erosion, and the societal and environmental costs of mainstream agriculture are around $85 billion every year (PDF). This is part of a global picture, with the United Nations Food and Agriculture Organization (FAO) estimating that 24 billion tonnes of topsoil are lost globally each year. Agriculture is responsible for 8-10 percent of U.S. greenhouse gas (GHG) emissions, driving climate change that is expected to reduce the yield and protein value of staple crops. Even before flooding devastated the Midwest in 2019, farms filing for bankruptcy protection rose by 19 percent in 2018, the highest level in a decade, according to the Farm Bureau.
But there is hope. A transition toward regenerative practices could bring a huge win-win for farmers, food companies and the environment.
Our degraded soils could serve as a major carbon sink, locking away carbon, building drought resilience and increasing soil health, supporting productivity and farmer livelihoods. Indeed, changing agricultural and land management practices so that the carbon content of soils increases represents a huge opportunity to counter, and perhaps even reverse, human contribution to atmospheric GHG emissions. Some estimates of the potential for soils to capture atmospheric carbon are huge; figures in the billions of tonnes per annum are frequently cited.
So what does this mean for supply chains and how businesses work with farmers and ranchers?
Regeneration includes a suite of practices that protect and enhance soils, support thriving biodiversity and improve water quality — from planting cover crops, drilling rather than tilling the land to prevent disturbance, and keeping healthy roots binding the soil all year round. While successful regenerative agriculture approaches have common principles and ambition, it is also highly context-specific. A regenerative farm might look very different between India and the Midwest United States.
But if it is so simple, why isn’t everyone already regenerative? The last 40 years of agriculture have been incredibly successful in growing productivity but often have externalized other costs such as degrading soils — paying for our ability to farm now with the resources we will need in the future.
Shifting to regenerative agriculture requires a fundamental shift in the goals of our agriculture system, from one focused exclusively on maximizing yield and efficiency to one that pursues economic and social outcomes alongside productivity.
Research with farmers and ranchers in the United States and internationally has shown major barriers to change and scaling: Farmers need confidence and resource to take the risk of reinvesting in new equipment. They need knowledge transfer, capacity building and peer support to implement new practices. And the market, investors and policy environment need to incentivize the transition toward new supply chain models that drive this innovation. Actors across the food system, especially food businesses, can claim major wins in enabling this transformation.
With funding from the Walmart Foundation, stakeholders from across the agriculture system and Forum for the Future will be leading a collaborative process to identify the key opportunities to scale regenerative agriculture in the United States, based on an understanding of current activities and initiatives. Our goal is to create a joined-up approach to driving action on the ground.
The urgent need to regenerate our agricultural supply base can be seen in the emerging business strategies of major actors in the food sector.
For example, Danone sees regenerative agriculture as resting on three pillars: protecting soil; empowering a new generation of farmers; and promoting animal welfare. It has played a pivotal role as part of the 4 per 1000 initiative, launched during the climate change COP21 meeting, to catalyze collaboration on soil health and soil carbon sequestration, alongside helping farmers access training, equipment and financing. It has addressed market incentives, introducing longer-term contracts and a new price management system according to the evolution of production costs rather than the market. Its global alliance, Farming for Generations, brings together eight major businesses to build regenerative practices into dairy supply.
Meanwhile, General Mills has committed to advance regenerative agriculture practices on 1 million acres of farmland by 2030, developing training and technical support for land conservation, research and certification.
Global agricultural commodity company Olam has built regeneration into the core of its business strategy, adopting a “living landscapes” policy that explicitly supports a net-positive approach to sustainable development in agricultural supply chains and landscape management. This aims to support the co-existence of prosperous farmers and food systems, with thriving communities and healthy ecosystems to regenerate the living world.
These companies are just a few examples of those already beginning to realize the benefits of regenerative business models and, in an increasingly volatile world, aligning purpose and profit. And while we have focused on food supply, these challenges are relevant across a broad range of sectors as companies move toward the goals of the Net Positive Project.