Unilever joins new €1bn regenerative agriculture fund

Consumer goods group Unilever plans to invest €100 million (£86m) into a new 1 billion euro regenerative agriculture fund, the company said Wednesday (May 11).

Insurer Axa is also part of the fund to be managed by global alternative asset management group Tikehau Capital, and the three partners aim to invest €100m each into the fund.

They said they signed a memorandum of understanding to establish a new private equity “impact” fund dedicated to enhancing biodiversity and mitigating climate change by scaling up regenerative farming, which companies and governments see as a way to help meet targets to lower greenhouse gas emissions.

Proponents say regenerative farming can fight climate change by rebuilding soil organic matter and restoring degraded soil biodiversity, drawing carbon dioxide from the atmosphere and improving the water cycle.

“We know that one of the key ways to address climate change is through nature, and agriculture is a part of that solution. This is why in 2020 Unilever committed to invest €1bn in climate and nature projects, connecting value chain transformation with our business and brands, allowing Unilever to take targeted and meaningful action to address climate change and grow responsibly,” Eric Soubeiran, VP Climate & Nature Fund, Unilever, said.

“Eventually, we would expect projects to include accelerating the transition of regenerative surfactants, scaling low carbon dairy and plant-based acceleration. We look forward to working with partners on this new regenerative agriculture finance mechanism.”

Agriculture covers nearly 40 per cent of the world’s land and is responsible for 17 per cent of global greenhouse gas emissions, according to the United Nations, while causing a loss of biodiversity. Changes to farm practices could sequester as much as 250 million tonnes of carbon dioxide annually in the US alone, or 4 per cent of the country’s emissions, according to a 2019 report by the National Academy of Sciences.

The companies aim for the fund to invest in projects and companies dedicated to improving soil conditions, limiting water use and supplying regeneratively grown crops, as well as those developing new technologies in regenerative agriculture.

Impact investing, requiring a fund manager to track how the money meets targets tied to various environmental, social and governance-related metrics, is a growing area for investors.

AXA’s climate arm would utilise satellite technology to help monitor the new fund’s impacts, the companies said, while Unilever would provide guidance based on its own regenerative agriculture policies and work.