Field Notes: Agri Investor awards winners; US to track natural capital stock; UK pushes nature markets; and cover crops or no-till farming for carbon credits?

Agri Investor awards winners revealed; the US's 15-year program to measure its natural capital stock; the UK’s push for investment into its nature markets; and cover crops or no-till farming for carbon credits? Welcome to Field Notes, the start-of-the-week briefing for our valued subscribers only. Tips and feedback to:  

First look

The winners of the Agri Investor Global Awards 2022 have been revealed. (Image: Getty)

Agri Investor Global Awards winners 2022
Today we reveal the winners of the Agri Investor Global Awards 2022! Now in its second year, we have expanded the number of categories from 31 to 40 to give specialist GPs their own space to shine, as well as creating room to recognize the work being done in the emerging natural capital and climate mitigation space.

Big winners: BTG Pactual Timberland Investment Group emerged as the firm with the most wins, clinching four awards, including Fund Manager of the Year in the Americas and Global sections. Warakirri Asset Management and the AXA group also deserve mention, each claiming three awards.

Blue chips muscle in: The rapidly growing influence of TPG Rise in the timberland space is also worthy of note, as the firm and deals completed by its subsidiaries took home a combined three awards and it was runner-up in a further category. The firm was not shortlisted for any awards in our inaugural 2021 awards, demonstrating how rapidly it has made its presence felt.

Similarly, BNP Paribas has been known to deploy capital into natural asset funds (mostly under the radar) but its International Woodland Company deal was both highly visible and commendable, winning the European Deal of the Year award.

Discover the winners of all 40 categories here.

They said it

“A big part of our savings account comes from our natural resources, and we don’t have a way to track when we’re drawing it down”

Professor Eli Fenichel discusses the problem with making economic growth predictions without taking into account the environmental impact of that growth.

Natural capital

US embarks on 15-year natural capital data collection strategy
Work is underway in the US on a 15-year effort to begin accounting for the country’s natural capital data so it can be integrated into economic decision making.

Professor Eli Fenichel recently returned to Yale University after a stint at the White House where he led a 27-agency team to begin the undertaking.

Accounting for the natural capital cost of growth: Fenichel told Yale Insights that after a hurricane or wildfire, for example, GDP goes up in the next quarter as rebuilding and investment begins, but “ecosystems have been damaged or destroyed, yet we’re counting the impacts as positive economic growth.

“A big part of our savings account comes from our natural resources, and we don’t have a way to track when we’re drawing it down.”

Standardized data: More standardized natural capital data will be a key tool in addressing climate change through influence on regulatory and programmatic elements of federal policy and economic planning at the national, state and local levels.

Fenichel cited work on fisheries in the Gulf of Mexico and water issues in Kansas as demonstrating that it can take time to find language and numbers well-suited to all stakeholders across diverse markets.

Finding the key environmental metrics: “To develop the statistic requires bringing people from multiple fields together to effectively backwards engineer the way natural systems work,” Fenichel said. “We want to get a handle on it in a really deep way so we can find a finite number of statistics to produce that let us effectively ingrate environmental and economic decisions.”

Nature markets

UK wants to attract more private capital to its nature markets
The British government has released a framework for scaling up private investment in its nature markets. The framework is primarily concerned with markets that enable the creation of “units or credits that can be bought and sold.”

The four key areas the framework touches on are:

1. Core principles to ensure markets operate with integrity and deliver positive outcomes.

2. Current rules for how farmers and other land and coastal managers can access markets and combine income streams, and plans to further develop policy in this area.

3. A new arrangement with the British Standards Institution to develop a suite of high-integrity nature investment standards.

4. Next steps to clarify and develop institutional and regulatory roles and market infrastructure needed to ensure good market governance.

Government commitment: The document adds that the “framework represents a commitment from the government to support the development and operation of nature markets, and to build market policy on robust and enduring principles.”


Which is best for carbon farming: cover crops or no till?
A pair of University of Nebraska professors and an assistant have drawn on existing research to examine the financial and societal costs-to-benefits ratio of generating carbon credits through no-till farming and cover crops.

Cost vs benefits: The future cost to society of an additional ton of CO2 emitted today is estimated at $51 per metric ton by the US Interagency Working Group on Social Cost of Greenhouse Gases.

“This is a reasonable number for us to use as an estimate of the social benefits of carbon sequestration because it is the damage avoided by sequestering, rather than emitting, a ton of CO2,” the paper says.

“We note that the average cost of sequestering CO2 via no-till is about $21.98 per ton, well below the $51 benefit, while the average cost via cover crops, $59.68 per ton, is higher than the $51 benefit.”

Not all farmland is the same: The trio acknowledge sequestration outcomes vary across properties, as they drew on existing multi-year experiments to conclude it would “make economic sense for society to enroll and reimburse only the top 60.8 percent of fields for no-till, and only the top 31.7 percent of cover crop fields.”

An imperfect world: As it is not possible to use a “perfect information” policy where we could know ahead of time which plots will deliver a net positive benefit, the team found that in a scenario where 100 percent of fields were farmed using no till, the average sequestration benefit would be 0.77 metric tons of CO2e per acre per year. For cover cropping, it would be 0.76 metric tons per acre per year.

But even within these average ranges, there is a widespread set of outcomes, such that in some cases “no-till decreased soil carbon by a little more than two tons of CO2e per acre.”

See the full report here.

Agtech fundraising

  • Unibio has received a $70 million investment from the Saudi Industrial Investment Group to scale its operations. The start-up uses continuous-flow microbial fermentation technology to convert natural gas into Uniprotein, a protein-based fish and animal feed.
  • Agreena, a soil carbon platform start-up, has raised €46 million in a Series B funding round. Germany’s HV Capital led the round and was joined by existing and new investors including AENU and Anthemis.
  • Cauldron, an Australian precision fermentation start-up, has raised $10.5 million in a seed round backed by Australia’s Main Sequence and Hong Kong’s Horizon Ventures.
  • EV Biotech, a microbial fermentation start-up, has raised €4.5 million in a seed round. The company intends to use its production method for a range of use cases including proteins, food ingredients, flavors, fragrances, cosmetic ingredients, materials and bio-pesticides, among others.

Also in the news…

  • Final TNFD draft framework sets out disclosure metrics
    Latest draft suggests taxonomies can play key role in disclosing nature-related opportunities, while also publishing draft guidance on nature scenarios (Responsible Investor).
  • Heartwood Partners bets on land reclamation through NativeSeed
    NativeSeed operates mainly in the Rocky Mountain states and the Pacific Coast, areas battered by extreme weather (PE Hub).
  • Ukraine grain glut hits agribusiness in neighbouring countries
    Romanian and Polish farmers criticise ‘derisory’ EU compensation and politicians call for higher offer (Financial Times)

Today’s letter was prepared by Binyamin Ali, Chris Janiec and Daniel Kemp.