The transition to regenerative agriculture will be accelerated by a new impact fund

AXA, Unilever, and Tikehau Capital plan to create a private equity impact fund for regenerative agriculture. The three partners plan to invest €100 million each to drive structural change. They combine industry, risk, and financial expertise. The €1 billion fund will also be open to investors.

Today, worldwide insurance and asset management company AXA, global consumer goods company Unilever, and global alternative asset management group Tikehau Capital, have announced they have signed a Memorandum of Understanding outlining their ambition to create an impact fund dedicated to accelerating and scaling the regenerative agriculture transition.

Together, agriculture, land use, and deforestation represent the second-largest source of greenhouse gases emissions globally and the primary driver of biodiversity loss. Regenerative agriculture practices can reverse this trend and play a crucial role in addressing climate change and environmental challenges. Healthy soils can sequestrate carbon, support biodiversity, preserve water, and improve the resilience of agricultural yields, bringing healthy food while ensuring a sustainable source of income for millions.

The aim of the fund, which will be managed by Tikehau Capital, will be to promote regenerative agriculture practices by focusing on three core areas:

- Protecting soil health to enhance biodiversity, preserve water resource and help fight climate change

- Contributing to the future supply of regenerative ingredients to meet the needs of a growing global population and consumer demand for increasingly sustainable products

- Helping to unlock technological solutions that aim to accelerate the transition to regenerative agriculture

We believe that the required transition in agricultural practices will only be made possible by a new, more systemic form of collaboration between stakeholders across the value chain, including farmers, producers, manufacturers, retailers, technology providers and financial investors, which this fund will seek to bring to life.

Leveraging on the international network of AXA, Unilever and Tikehau Capital, the fund is expected to be global. Impact objectives and measurement will be central to the way it operates and fully embedded in its investment strategy.

Pascal Christory, AXA Group Chief Investment Officer, and Antoine Denoix, Chief Executive Officer of AXA Climate, added: “Regenerative agriculture is a major ESG theme. This fund therefore aligns perfectly with our strategy of decarbonising the real economy through impact investments. At AXA, we aim to have €26 billion invested in green assets by 2023, and to have €1.5 billion to invest in forests and natural capital projects, which will soon include sustainable agriculture projects. To convince investors, we need to reinvent the way we manage agricultural risk and measure impact locally, throughout the duration of the projects we fund. We hope that this initiative with Tikehau Capital and Unilever will be the first of many!”

Eric Soubeiran, VP Climate & Nature Fund, Unilever, said:

“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. 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.”

Pierre Abadie, Group Climate Director at Tikehau Capital, said:

“We believe that reducing agriculture’s impact on the environment is vital to combating climate change and ensuring there is a healthy and sustainable food supply chain for all. This reduction in impact must be a collective effort that takes place on a large scale. Through the launch of this fund, our goal is to pool resources, skills, and expertise to support the technological innovations and the changes of practices that are required to improve both soil and human health. The fund will help us to implement our climate plan, through which we aim to have €5 billion of assets under management by 2025 dedicated to addressing the climate emergency.”

As a pioneer in the field of climate and environmental adaptation, AXA Climate will play an integral role in launching and deploying the fund. This AXA subsidiary will contribute through its expertise in climate, environmental and agricultural risks management, and in impact monitoring (particularly via satellite technology), supported by its granular knowledge of the agriculture sector.

Unilever has been leading the industry through sustainable sourcing practices for well over a decade, engaging hundreds of thousands of farmers worldwide. Its Regenerative Agriculture Principles build on these years of designing progressive policies and practical work, and this, coupled with Unilever’s extensive global supply chain and local market experience, will provide guidance for future projects.

Tikehau Capital will bring its experience and expertise in climate-related investments. Having launched the first fund dedicated to the energy transition and the decarbonisation of the economy in 2018, Tikehau Capital now has almost €2 billion of assets under management focused on climate action across its various asset classes.

Source: Unilever news