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Investing in regenerative agriculture: financial gains that combats climate change

A shift is occurring in the financing of regenerative agriculture, driven by the recognition that enhancing sustainability in food production is essential to mitigate the high climate impacts. This realization has resulted in multiple international and Danish agrifood companies investing in regenerative agriculture. 

According to the Rockefeller Foundation, economists predict that if CO2 emissions continue at the current rate, climate change will reduce overall global GDP by 25% by 2100. In the past 30 years approximately EUR 3,7 trillion worth of crops and livestock, equal to 5% of annual agriculture GDP, have been lost due to climate change. 

Investments that are changing the sector

Significant global investments in regenerative agriculture have been driven by these predictions. Notably, at the 28th UNFCCC Conference of the Parties (COP28), substantial progress was achieved as leaders from 150 countries committed to integrating food systems into national climate plans by 2025. These commitments are part of the Declaration on Sustainable Agriculture, Resilient Food Systems, and Climate Action. 

In response, the private sector has pledged to promote regenerative agriculture practices on 160 million hectares of land—an area three times the size of France—by 2030. To support these commitments, EUR 6,5 billion has been allocated for climate and nature initiatives in food systems, with EUR 2 billion specifically designated for regenerative agriculture projects. 

But what does regenerative agriculture entail? Although there is no universal definition, there is a general consensus that regenerative agriculture is a farming practice grounded in principles aimed at preserving nature and combating climate change. These principles include minimal soil disturbance, applying compost or compost tea, maintaining permanent soil cover, establishing follow-up crops, grazing, and using hand tools or smaller machinery. 

regenerative agriculture contributes to soil health, improves water quality, and protects biodiversity

Danish agrifood companies are taking part in the transition

Regenerative agriculture contributes to soil health, improves water quality, and protects biodiversity. However, making regenerative agriculture financially viable for agrifood companies remains a challenge. One company offering a solution is the Danish start-up Agreena, that is developing tools to monitor carbon sequestration and issue credits, thereby making regenerative agriculture more economically feasible. 

DLG Group, Denmark’s largest supplier of crops to the food industry, is working to mature the market for regeneratively grown crops. They have initiated agreements with farmers to cultivate barley using regenerative principles and are inviting industry stakeholders to discuss accelerating this development. 

Carlsberg is also striving to incorporate more regenerative agriculture into their practices, with ambitious goals to source all their materials from regenerative agriculture by 2040. Similarly, Arla has multiple pilot farms in Denmark, the UK, Sweden, Germany, and the Netherlands, testing and documenting the impact of regenerative dairy production. 

Regenerative agriculture practices are beginning to be implemented, and while the challenge is not yet solved, these initial initiatives serve as solid building blocks for a more sustainable agriculture and food sector. 

 

Click here to read: The Potential of Regenerative Agriculture in Denmark