July 9, 2024

Building a Regenerative Supply Chain - Lessons Learnt

Drawing from Ben Goldsmith’s (one of the UK’s leading investors in regenerative agriculture) and Ruth Andrade’s (heading the environmental team at LUSH cosmetics) talks at Altruistiq’s Regenerative Agriculture Roundtable, this article shares their unique experiences and insights to unpack the business and environmental case for building a regenerative supply chain.

The environmental and business case for regenerative agriculture in the context of nature restoration

Ben Goldsmith

Nature restoration plays a critical role in mitigating climate change. However, it is not rising up the political and business agenda as quickly as decarbonisation. Ben’s keynote underscores the importance and potential that nature restoration can have when addressed in parallel with decarbonisation.

  • The stark necessity for change: The UK is among the most nature-depleted countries on earth with over 75% of the country farmed. Diversified land management practices are needed to meet specific challenges of different landscapes, from the least productive land to the most.
  • UK policy support: The principal mechanism in place to support nature restoration is the Environmental Land Management Scheme (ELMS), which financially supports environmental land management across 3 tiers:
  • The Sustainable Farming Incentive (SF): Incentivises farmers on high-grade, productive land, to feed the nation in a way that doesn’t damage the soil.
  • Local Nature Recovery: Pays for actions that support nature restoration to meet local environmental priorities and aims to encourage collaboration between farmers.
  • Landscape Recovery: Supports landscape and ecosystem recovery through long-term projects, for example restoring wilder landscapes peatlands and salt marshes.

ELMS highlights the huge opportunity for farmers to create natural habitats within the farmed environment. By recognising that land can benefit us in quantifiable ways beyond food production, farmers can diversify revenue streams to include other environmental and public benefits that they can deliver from their land, such as tourism, flood mitigation, speciality animals.

Wessex Water case study

Businesses can also look to benefit from supporting land use changes. For example, to meet drinking water standards, in 2005 Wessex Water was faced with the prospect of having to build an extremely expensive water purification treatment plant. They decided instead to look into alternative approaches, the preferred option being to pay landowners in the catchment area to  transition to regenerative land management practices. In doing so, Wessex Water was able to improve the water quality at the source, reducing the main water pollutants identified (nitrates and pesticides) from running into the water streams. Wessex Water now pays farmers throughout Poole to manage their land differently, resulting in cleaner water, cost savings, wider environmental benefits and increased supply chain engagement.

How can your company best weave regenerative agriculture into your supply chain?
Ruth Andrade

LUSH Cosmetics are pioneers at integrating regeneration into supply chains, forming partnerships over the past 13 years with communities and organisations around the world that were applying a more holistic approach to agriculture. Ruth shares key learnings and insights that businesses can consider when building a regenerative supply chain.

Key Learnings from LUSH:

  • Diversity of funding streams:  Apply for government subsidies and investments from financial institutions to support private sector regenerative initiatives.
  • Community support: Engage farmers through technical assistance, training programs, long-term contracts, and paying premiums for regeneratively produced commodities to accelerate the transition to regenerative agriculture.
  • Resilience of supply and demand: Back up suppliers with long-term partnerships, guaranteed payment and access to a market beyond that of your own to allow for supply and demand adjustments.

Organic Cotton: Re-Wrap India case studyWorking with a supplier called ReWrap in India, LUSH helped launch a project to support over one thousand farmers in the suicide belt in transitioning from conventional cotton (which requires high use of pesticides, herbicides and is damaging to the water table) to organic cotton, promoting regenerative agriculture techniques.

The main initiatives to facilitate this transition included:

  • Long term relationship building: LUSH pays for cotton two years ahead of production. This props up farmers to allow for yield fluctuations.
  • Guaranteed buying: LUSH guarantees to buy the cotton which ensures a revenue stream for the farmer as well as securing the supply for LUSH. This is increasingly beneficial as supply and markets fluctuate with geopolitical crises.

Themes from the group discussion:

There was a strong consensus that businesses are best placed to enable the flow of money from banks to projects, identifying opportunities in their supply chain, funding the project through a blended finance approach and validating progress with robust data measurement.

To drive the success of these projects, deep and durable supplier partnerships need to be established. Sustained connectivity in supply chains will help ease the challenge of measuring your impact reliably such that it can stand up to public scrutiny and inform sound prioritisation.

Lastly, collaborative partnerships between businesses will help accelerate and maintain regenerative supply chains. Making your supply chains visible will enable and incentivise collective action.

The business, environmental and social case for regenerative agriculture is crystal clear, as is the private sector’s appetite to build regenerative supply chains. A thread that ran throughout the roundtable discussions was the need for private sector collaboration. All businesses need to come into the same journey. Collaboration across public and private spheres is critical to avoid compromising the environment and the economy.

We were excited to bring industry leaders together to discuss how to accelerate the transition to regenerative supply chains. Please join our mailing list if you would like to stay up to date with our upcoming roundtables.

Left: Ben Goldsmith, CEO Menhaden PLC.
Right: Ruth Andrade, Head of the Environmental Team

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