Regenerative agriculture: accelerating the net zero pathway

Regenerative agriculture: accelerating the net zero pathway

Impact investing ESG
Hélène Henry-Prince & Laurent-David Charbit (photo archive Tikehau Captial).jpg

Agricultural improvements have enabled the successful nourishing of a growing population globally. But tackling climate change and biodiversity loss by collectively reducing negative externalities is just as important.

By Hélène Henry-Prince and Laurent-David Charbit, both Co-Head of Regenerative Agriculture, Tikehau Capital

Carbon ‘tunnel vision’

The road to carbon neutrality means reducing carbon emissions in the atmosphere and physically sequestrating the remainder through ‘carbon sinks’. With the wheels of progress towards this goal finally in motion, we now need to shift from incremental progress to systemic change.

One of the biggest hurdles to overcome is a matter of perception. When thinking of reducing carbon emissions, we tend to focus primarily on carbon in the atmosphere. However, what hasn’t yet been widely discussed in our opinion is that, in order to achieve carbon neutrality by 2050, CO2 soil sequestration will play a decisive role1.

Soil scientific experts2 consider the soil to be one of the biggest carbon sinks on the planet. It contains two to three times more carbon than the atmosphere, making the agricultural ecosystem an essential ally to meet the Paris Agreement’s 1.5°C target.

The true cost of heightened production

Agriculture is the second-largest emitter of GHG globally (circa 25%), the majority of which comes from methane emitted by livestock farming and the remainder from nitrous oxide resulting from fertiliser use3 and deforestation.

Modern agriculture has made it possible to increase production massively across the globe - but at what cost for the planet and human health?

Intensive ploughing and the maximisation of outputs has destroyed soil vitality, rendering it infertile. To compensate for this, the use of fertilisers that pollute our water tables has been increased, which has raised acidity levels in the soil. Hedges have been cut down, territory has been regrouped and large monocultures have been organised to optimise yields, making it necessary to use even more pesticides.

The need for a change: could regenerative agriculture be the answer?

Regenerative agriculture is a nature-based solution which promotes land management practices that leverage the natural and ecosystemic photosynthesis in plants to close the carbon cycle and to rebuild soil health, crop resilience and nutrient density. Regenerative agriculture improves soil health primarily through practices that increase soil organic matter. Amongst other benefits, it can help reverse climate change by acting as a carbon sink and rebuilding degraded soil biodiversity – in turn resulting in carbon drawdown, improved water cycle, reduced use of chemical intrants and better resistance to climate shocks.

Carbon absorbed by plants from the air (CO2) is exuded through the roots to feed microbes, which then provide the plants with essential minerals and nutrients. Increasing organic matter in the soils by 4g per 1,000g of CO2 each year would offset all the greenhouse gas emissions produced by the planet in 1 year4.

How do we make it happen?

Firstly, regenerative agriculture is facilitated through various ‘enablers’. These include farming tools, equipment, machinery, fertilizers and agri-tech.

The second aspect requires a change in agricultural practices. For example, through improved training and recruitment as well as making more effective use of available technologies.

Importantly, and whilst shifting from conventional agricultural production to regenerative practices may lead to a shortterm drop in productivity, conventional fertilizer-driven food production simply isn’t viable in the long run. Therefore, instead of destroying the productivity of the same soil from which we demand an increase in production, regenerative agriculture, by enhancing and sustaining soil health, should improve productivity in the long run, enabling sustained production and nutritious food independence for future generations.

Secular trends behind the agricultural shift are underway, with changing regulation and an evolution of a food system that is climate/ nature positive and health conscious, driving sustainable and inclusive growth.

Filling the financing gap

Regenerative agriculture practices seeking to reverse unsustainable production methods at scale require significant financing. To help fill this gap, Tikehau Capital has partnered with AXA Climate and Unilever to launch a private equity impact strategy dedicated to investing in projects and companies supporting the scaling-up of the regenerative agriculture transition. To create alignment of interest, the three firms invested € 100 million each, combining a differentiated set of industry, risk, and financial expertise to drive structural change.

The strategy focuses on rebuilding soil organic matter and restoring degraded soil biodiversity, contributing to sustainable food production as well as promoting local approaches coupled with innovative distribution and packaging solutions.

  • Designed to contribute to SDGs 13 (Climate change), 15 (Life on land) and 3 (Good health and wellbeing), the aim of this strategy is to promote regenerative agriculture by focusing on three core areas:
  • Restoring soil health to enhance biodiversity.
  • Preserving water resources.

Helping to fight climate change by contributing to the future supply of regenerative ingredients. This objective aims to meet the needs of a growing global population and consumer demand for sustainable products.

A collective effort

Reducing agriculture’s negative impact on the environment is vital to combatting climate change and ensuring a healthy and sustainable food supply chain for all. We believe this must be a collective effort on a large scale. Through the launch of this strategy, we are pooling resources, skills, and expertise to scale technological innovations and the changes of practices required to improve both soil and human health.


1 Source: Ontl, T. A. & Schulte, L. A. (2012) Soil Carbon Storage. Nature Education Knowledge 3(10):35 2012
2 Source: Stanford News, March 24, 2021
3 Source: IPCC AR6 WGIII Technical Summary 2022
4 The International ’4 per 1000’ Initiative encourages stakeholders to engage in a transition towards a regenerative, productive, highly resilient agriculture, based on appropriate land and soil management, which creates jobs and income and thus leads to sustainable development


The agricultural ecosystem is an essential ally to meet the Paris Agreement’s 1.5°C target.

The regenerative agriculture transition can play a crucial role in addressing both climate change and environmental issues.

Tikehau Capital, AXA Climate and Unilever’s collective ambition to launch a new private equity impact strategy, dedicated to investing in projects and companies supporting the scaling-up of the regenerative agriculture transition, intends to fill the significant financing gap. 



Important notice: This publication is intended as a marketing instrument and does not satisfy the statutory requirements regarding the impartiality of a fi- nancial analysis. This document is not an offer of securities for sale or invest- ment advisory services. This document contains general information only and is not intended to represent general or specific investment advice. Past perfor- mance is not a reliable indicator of future results and targets are not guaranteed.