Speakers tackled a diverse range of topics at the event, held at a time of intense innovation to meet the challenges of the drive towards more sustainable farming with nature- and climate-positive impacts.
From soil carbon measurement to fintech, there was no shortage of innovatory technology on show at the World Agri-Tech Innovation Summit, designed to encourage a global shift to more sustainable, nature-friendly farming. But, against the backdrop of a difficult funding environment for young agri-tech firms, speakers said more regulatory certainty was essential to underpin financing for the sector.
The need for agri-food businesses to address and measure their climate and biodiversity impacts has become more acute in light of the requirements of the UN-backed Global Biodiversity Framework agreement signed last December at the COP15 meeting in Montreal, and the just-released final recommendations of the Taskforce on Nature-related Financial Disclosures (TNFD).
The COP15 pact contains goals and targets, notably that to provide environmental protection for at least 30% of the world’s surface, but speakers at the summit said it still lacks sufficient detail to make it workable.
Karen Ellis, chief economist at WWF UK, told the event that businesses and the financial sector were supposed to be aligning with the goals, but there was uncertainty over the mechanisms for achieving them. “That is part of the framework that was agreed, but at the moment, I don’t think anyone knows how that can happen,” she said.
However, while the COP15 agreement had yet to demonstrate it had teeth and the TNFD recommendations were currently voluntary, both were likely to become drivers for change in future. Making reporting on nature-related impacts mandatory was seen as vital by panellists if biodiversity targets were to be met.
The positive signal to investors that such measures would bring could help kindle investment in agri-tech start-ups, which has flagged in recent months after a decade of buoyant growth. How small companies and their backers should respond to this challenging new investment environment was another key theme at the summit. Impact Investor talked through the theme with summit participants in a recent article.
The challenge of measuring nature and climate impacts right across the agricultural supply chain was also a hot topic. Ashish Gadnis of BanQu – a developer of blockhain-based supply-chain data technology – said international companies tracing back their supply chains often stopped at the wholesaler in the country of origin in the global south, rather than going right back to smallholders growing some types of commodities, such as coffee. That meant some western firms had little idea of the true extent of their deforestation impacts, or of whether the grower was really getting a fair deal from the wholesaler, leaving them open to accusations of greenwashing.
Gadnis said he expected EU deforestation-free regulation (EUDR) , which came into effect in June 2023, to require companies to pay more attention to the “first mile” of an agricultural commodity’s journey, as it required the supply chain to be “traceable, transparent and equitable”.
Carbon credits under fire
The value of carbon credits as a tool for encouraging climate and nature-related investment was another subject that got an airing, with the conclusion that they were a necessary tool, but that care had to be taken to separate the wheat from the chaff.
Doubts were cast over the ability of some types of offsets to accurately represent emissions benefits, as well as on their value as a long-term investment.
Andrew Dreaneen, head of natural capital & liquid alternatives at Schroders, said investors in the carbon offsets market needed to be aware of the danger that over-supply of credits and fast-changing methodologies for measuring their value made holding some types of carbon credits a challenging proposition. He suggested investing in forestry as a less risky alternative for investors seeking to decarbonise their portfolios, while noting that not all forestry projects have biodiversity benefits.
Kathy Willis, professor of biodiversity at Oxford University and a member of the UK government’s Natural Capital Committee, said claims by some carbon offset providers over the ability of the world’s oceans to store carbon, particularly in seaweed, needed to be treated with extreme caution. She also said work on carbon storage in soil was promising, but that more data was needed to assess the true impact.
Difficulties in assessing the benefits of carbon credits indicate the challenge facing those seeking to introduce so-called biodiversity credits, an even more complex proposition, as Impact Investor reported earlier this year.