Turning over soil health

Soil is a crucial ingredient, not only in the production of healthy and delicious food, but also medicine, building materials, our clothes and fuel. Soil health is also at the front line of tackling climate change, through the carbon sequestration processes that soil enables.  

However, despite the central role farming has, accounting for a third of global greenhouse gas emissions, it has taken 27 Conference of Parties (COP) to the United Nations Framework Convention on Climate Change for agriculture to be granted a full day’s discussion. In acknowledgment of the lag in investment in the farming industry, during this year’s COP27 there was the announcement of $8bn (£6.68bn) of funding led by a US-UAE joint initiative. The funding commitments are focused on reducing carbon emissions connected to food production, but also reducing the impact that chemicals used in the production of food have on our environment.  

There was also an announced commitment from the Rockefeller Foundation to provide grants to 10 organisations scaling indigenous and regenerative agriculture practices around the world. The variety of different solutions to sustainable agriculture promoted at this year’s COP really demonstrates the range of approaches needed to tackle this issue and highlights the requirement to overhaul the agricultural system.  

Investment and commitment

As fund selectors, this is an issue we have been engaging on with the managers of the funds held in the sustainable portfolios, to understand the challenges and opportunities they are seeing for investment in this space. We wrote to our managers to understand how they were tackling various aspects of farming, such as biodiversity, in their processes, and their responses varied from commitments to no deforestation through to examples of strategic rewilding using weeds for ground cover and indigenous mammals as pollinators.  

Exciting opportunities range from companies that are enabling the delivery of precision farming practices, that can be used by very large-scale agricultural players, all the way through to new agricultural practices entirely. Using precision farming technology results in lower volumes of chemicals being applied to crops, by targeting the areas and varieties that need it. We have also seen a return to more traditional methods of cultivation being readopted and farmers refocusing on replenishing soil nutrients through naturally occurring minerals, enzymes and worms in the place of added chemicals.

In terms of engagement, our managers have been inspiring companies to record and report on metrics around water efficiency, uncovered land and biodiversity through habitat potential metrics, and on a broader scale engaging in policy through initiatives such as the Taskforce on Nature-related Financial Disclosures or the Natural Capital Alliance.

While the eradication of using chemicals is certainly the best outcome for biodiversity, soil health and earth regeneration, taking steps to scale down usage is certainly of benefit to the soil and fields. It enables farmers to spend less on expensive fertilisers – an added value in the context of the current Russian invasion of Ukraine, which has sent prices of ammonia soaring – and it has also demonstrated an increase in crop yields.

Nutrition initiative

Encouragingly, at this year’s COP, an Initiative on Climate Action and Nutrition was also launched by Egypt and the World Health Organisation. The goal is to integrate the global delivery of climate change adaption with nutrition and sustainable food systems. These two things are symbiotically intertwined, and it places nutrition and food safety much higher up the priority list for nations.  

Climate change cannot be tackled without considerable attention paid to agriculture and soil health, and in turn food systems are being increasingly disrupted due to climate change. It is encouraging that these issues are increasingly seen in a less siloed fashion, and reflects the way we view climate change, biodiversity loss and agriculture within our investment selection process.  

These initiatives bring opportunities for businesses providing solutions but also an awareness of the practices that should be implemented as a standard by companies involved in agriculture.