In a concerted effort to accelerate and scale the transition toward regenerative agriculture, Unilever, AXA and Tikehau Capital have partnered to create a private equity fund to invest in projects and companies that support this initiative.

Each company aims to invest €100 million (US$105 million) and merge industry, risk and financial expertise to drive structural change. The fund will also be open to investors who want to participate and benefit from this initiative, with a target size of €1 billion (US$1.1 billion). 

“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 the company committed to investing €1billion (US$1.1 billion) in climate and nature projects in 2020, connecting value chain transformation with our business and brands,” says Eric Soubeiran, VP, climate & nature fund, Unilever.

“Eventually, we would expect projects to include accelerating the transition of regenerative surfactants, scaling low carbon dairy and plant-based acceleration,” he says.

Stakeholder collaboration needed
The fund which Tikehau Capital will manage aims to promote regenerative agriculture practices such as protecting soil health to enhance biodiversity and preserve water resources.

In addition, the fund will contribute to the future supply of regenerative ingredients to meet the needs of a growing global population and consumer demand for sustainable products and assist in unlocking technological solutions that can accelerate the transition to regenerative agriculture.

The companies believe the transition in agricultural practices will only be possible through a more systemic collaboration between stakeholders across the value chain, including farmers, producers, manufacturers, retailers, technology providers and financial investors.The private equity fund will aim to secure a supply of regenerative ingredients to meet the needs of a growing global population. 

“Through the launch of this fund, our aim is to pool resources, skills and expertise to support the technological innovations and changes in practices required to improve soil and human health. The fund will help us to implement our climate plan, through which we aim to have €5 billion (US$5.2 billion) of assets under management by 2025 dedicated to addressing the climate emergency,” says Pierre Abadie, group climate director, Tikehau Capital.

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

“This fund, therefore, aligns well with our strategy of decarbonizing the real economy through impact investments. At AXA, we aim to have €26 billion (US$27 billion) invested in green assets by 2023 and to have €1.5 billion (US$1.6 billion) to invest in forests and natural capital projects, which will soon include sustainable agriculture projects,” says Pascal Christory, group chief investment officer, AXA.

“To convince investors, we need to reinvent the way we manage agricultural risk and measure impact locally, throughout the projects we fund,” he says.

Meanwhile, Unilever’s Regenerative Agriculture Principles are built on several years of designing progressive policies. Coupled with its extensive global supply chain and local market experience, it will guide future projects.

Tikehau Capital will bring its experience and expertise in climate-related investments and has almost €2 billion (US$2.1 billion) of assets under management focused on climate action across its various asset classes.

In addition, a report detailing how the EU food manufacturing industry can play its part in reaching net-zero carbon emissions by 2050 was published by Food Drink Europe.