Investments aligned with this Strategic Goal aim to improve ecosystem health by implementing environmental-conservation and soil-health practices associated with sustainable agriculture.

The sections below include an overview of the approach for achieving desired goals, supporting evidence, core metrics that help measure performance toward goals, and a curated list of resources to support collecting, reporting on, and using data for decision-making.

What

Dimensions of Impact: WHAT

Investors interested in deploying this strategy should consider the scale of the addressable problem, what positive outcomes might be, and how important the change would be to the people (or planet) experiencing it.

Key questions in this dimension include:

What problem does the investment aim to address? For the target stakeholders experiencing the problem, how important is this change?

Healthy terrestrial ecosystems are especially important for systems of agricultural production and management. The importance of biodiversity, including soil biodiversity, for global sustainability was formalized at the 1992 UN Conference on Environment and Development (1). Investing in the health of ecosystems and soil through sustainable agriculture can reduce and mitigate the damaging environmental impacts of conventional agriculture, in turn making both ecosystems and farming systems more productive and resilient. Conventional agricultural practices have contributed to long-term ecological imbalance, degrading land and soil, diminishing habitat and biodiversity, accelerating loss of species, and emitting chemical and nutrient pollution (2). Healthy and functioning ecosystems, meanwhile, help pollinate crops, manage pests and disease, filter water, and offer additional services that are critical for land-based agriculture.

Investments aligned with this Strategic Goal can drive improved ecosystem health by:

  • Financing agricultural technologies that support climate resilient practices, such as improved soil health, efficient water use, and increased water holding capacity;
  • Creating new investment approaches that include appropriate technical assistance and training to encourage and support sustainable and regenerative farming practices such as sustainable grazing management plans, decreased tillage, and regionally appropriate cropping plans;
  • Purchasing or assisting in purchasing farmland or farming operations whose emphasis is on improving biodiversity and ecosystem health;
  • Advancing the development of new crop and livestock breeds that create lower negative impacts on local ecosystems
  • Promoting circular-economy approaches to nutrients from farm to fork (and back to farm) that reduce waste and encourage continual use of resources

Investments aligned with this Strategic Goal can:

  • improve soils and grazing lands through sustainable grazing management plans, decreased tillage, and regionally appropriate cropping plans;
  • protect wetlands and habitats for wildlife and pollinators on diversified landscapes;
  • restore freshwater resources, improve water filtration of soils, and reduce runoff pollution from agricultural chemicals and sediment;
  • increase biodiversity of plants, wildlife, pollinator species, and soil microbiology;
  • preserve diverse and sustainable agricultural practices that promote biodiversity.

*The GIIN’s Understanding Impact Performance: Agriculture provides analysis of the impact performance of agriculture impact investments and showcase the real-world results associated with them.

What is the scale of the problem?

Conventional agricultural systems and practices have contributed to the widespread degradation of land, soil, and water, alongside degrading other ecosystem services and resources. Agriculture’s current demands on the world’s land and freshwater resources are unsustainably high. More than a third of the Earth’s total land area is used for agriculture and grazing, leading to alarming rates of land conversion and loss of species habitat and causing the salination of 20% of global irrigated land by area (1). Agriculture is responsible for more than half of all nitrogen and phosphorous runoff into oceans, contributing to the “dead zones”—areas where excess nitrogen pollution leads marine life to die—that affect more than 200,000 km2 of ocean and threaten freshwater ecosystems (3). Grazing lands and grasslands, which cover between 20% and 40% of the Earth’s area, have also faced significant threats, as agricultural conversion in East Africa and South America has led to severe loss of grassland (1). Deforestation, often done with the purpose of converting land to agricultural use, poses one of the gravest threats to biodiversity, because forests support three-quarters of the world’s terrestrial biodiversity (4).

Soil erosion and depletion are occurring rapidly across the globe, with an estimated 66% of the world’s soils already experiencing degradation and more than 90% facing degradation by 2050 (1). Researchers estimate that human-induced rates of soil erosion will outpace rates of soil formation by more than an order of magnitude (5). If current rates of degradation continue, according to the UN, all of the world’s topsoil could be gone within 60 years, making food production increasingly difficult (10).

Who

Dimensions of Impact: WHO

Investors interested in deploying this strategy should consider whom they want to target, as almost every strategy has a host of potential beneficiaries. While some investors may target women of color living in a particular rural area, others may set targets more broadly, e.g., women. Investors interested in targeting particular populations should focus on strategies that have been shown to benefit those populations.

Key questions in this dimension include:

Who (people, planet, or both) is helped through investments aligned with this Strategic Goal?

While investments aligned with this Strategic Goal could positively affect people and planet quite broadly, specific target stakeholders in this Strategic Goal can include the following.

  • Wildlife. By protecting habitat and restoring degraded habitat, wildlife gains access to food and shelter on or near agricultural lands under sustainable management.
  • Soil. Practices that promote soil health decrease compaction, erosion, and run-off and increase soil organic matter, carbon storage, water retention, and moisture management. Such practices provide conditions for the soil microbiome to thrive, furthering the suite of biologically based benefits it provides.
  • Livestock. Following animal welfare guidelines, such as Certified Humane and the Global Animal Partnership, gives livestock access to breed- and environment- appropriate diets, high-quality habitats, and shelter. A genetically diverse base of livestock breeds supports animal health without the excessive use of antibiotics or growth hormones. Finally, managing livestock waste properly for energy production, soil amendments, or both also improves animal welfare.
  • Water resources. The health and quality of freshwater resources are restored by increasing the efficiency of irrigation; better managing groundwater and surface water; reducing pollution from sediment, nitrogen and phosphorus fertilizer, and insecticide; improving water retention in healthy soils; and protecting wetland ecosystems.
  • Climate. Agriculture, through production and land-use change, produces about 25% of all global greenhouse gas emissions. An additional 2% of emissions comes from associated sectors, such as the production of fertilizers, herbicides, and pesticides, as well as from energy consumed for tillage, irrigation, and harvest (4). Practices such as reducing tillage, planting permanent cover and perennial plants, and rotationally grazing livestock, among others, can reduce agriculture-related emissions, mitigating negative impacts on climate.
  • Farmers and farm workers. Implementing conservation and soil health practices boosts farmers’ long-term resilience, benefiting them financially. Poor soil conditions restrict crop yields, requiring additional inputs and limiting financial returns; healthy soils, by contrast, can improve crop quality and therefore financial value (2). Furthermore, reducing the use of nitrogen and chemical fertilizers and other inputs limits health and other exposure risks faced by farm workers and other agri-business workers.
  • Rural communities.* Because 75% of the world’s poor live in rural areas, rural development remains the most effective means of reducing poverty, food insecurity, and ecological degradation. The livelihoods of many rural communities are based on access to and control of land, water, and other ecosystem resources. Conservation and soil health practices, paired with secured land rights and equal rights for female farmers, can gives communities better yields, higher financial returns, improved resource quality, and reduced soil degradation (4).

*Rural communities, marginalized communities, and women may specifically benefit from availability of healthier foods and better care of natural resources related to this Strategic Goal – for further detail, see the “Improving Human Health through Agriculture,” “Improving Social Equity and Justice through Agriculture,” and “Increasing Gender Equality in Agriculture” Strategic Goals in the IRIS+ Sustainable Agriculture theme.

What are the geographic attributes of those who are affected?

The targets of these investments are worldwide in nearly every country that participates in the global agricultural economy, both Global North and Global South. According to the UN Food and Agricultural Organization, the regions with soils most suitable to support cropping with fewer inputs include parts of North America, Eastern Europe, and East Asia. The regions at highest risk of land degradation include parts of the Midwestern United States, Brazil, India, China, and Western Europe. Asia sees the highest use of nitrogen and phosphorous fertilizer, followed by Europe and North America, broadly corresponding with similar trends in excess nitrogen and phosphorous applied to cropland (1).

Contribution

Dimensions of Impact: CONTRIBUTION

Investors considering investing in a company or portfolio aligned with this strategy should consider whether the effect they want to have compares to what is likely to happen anyway. Is the investment's contribution ‘likely better’ or ‘likely worse’ than what is likely to occur anyway across What, How much and Who?

Key questions in this dimension include:

How can investments in line with this Strategic Goal contribute to outcomes, and are these investments’ effects likely better, worse, or neutral than what would happen otherwise

Organizations can consider contribution at two levels—enterprise and investor. At the enterprise level, contribution is “the extent to which the enterprise contributed to an outcome by considering what would have otherwise happened in absence of their activities (i.e., a counterfactual scenario).” To learn more about methods for assessing counterfactuals, see the Impact Management Project.

Investors can contribute toward addressing the larger issues of the degradation of land, soil, and ecosystem health as follows.

  • Grow new and undersupplied capital markets, such as investing in previously overlooked opportunities in soil health, conservation, and carbon pricing. To implement or adopt different practices, farmers and businesses in sustainable agriculture need access to appropriately structured capital for their immediate and long-term needs. Investors can catalyze these underserved markets, particularly in regions where conventional agricultural practices remain widespread and dominant.
  • Provide flexible capital to farmers, communities, and food-system businesses seeking to transition to sustainable practices or to achieve specific improvements in ecosystem or environmental health. Long-term investments can include those targeting soil-health and other ecosystem-restoration outcomes, research and tools for soil health measurement, and early or growth-stage, values-aligned financing that allows entrepreneurs to accelerate impact.
  • Engage actively in the development, implementation, monitoring, or evaluation stages of an investment, providing technical assistance in agroecology, conservation planning, and other relevant fields.
  • Signal that impact matters by investing in projects that prioritize ecosystem and soil health, building networks, driving interest into the sector, and demonstrating commitment to addressing environmental problems through sustainable agriculture.

How Much

Dimensions of Impact: HOW MUCH

Investors deploying capital into investments aligned with this strategy should think about how significant the investment's effect might be. What is likely to be the change's breadth, depth, and duration?

Key questions in this dimension include:

How many target stakeholders can experience the outcome through investments aligned with this Strategic Goal?

Billions of humans, animals, plants, and microorganisms will benefit from healthy and functioning ecosystems. Indeed, at the 2021 World Economic Forum in Davos, the United Nations Secretary-General presented the world’s current loss of biodiversity as an existential threat to urgently address (13). As 75% of the world’s poor live in rural areas, sustainable rural development remains the most effective means to reduce poverty, food insecurity, and ecological degradation (4).

Nature will also benefit. Around one million animal and plant species are now threatened with extinction, more than ever before in human history, according to the United Nations (12). More than three-quarters of food crop types rely on animal pollination, and three-quarters of the world’s terrestrial biodiversity rely on forest ecosystems—meaning that animal extinction threats are also often threats to agricultural yields. Protecting habitats and reducing deforestation thus benefit both biodiversity and food security (4).

How much change can target stakeholders experience through investments aligned with this Strategic Goal?

The extent of change resulting from investments aligned with this Strategic Goal will depend on the size, scope, and attributes of the land area affected. Other influencing factors include any co-benefits from environmental rehabilitation and the investment’s length and stability. However, evidence shows that sustainable farming practices can result in significantly better outcomes for ecosystem health compared to conventional agricultural practices. For example, the Rodale Farming Systems Trial at a trial farm in Pennsylvania in the eastern United States—the longest-running side-by-side comparison of organic and conventional farming systems to date—has shown that, over 22 years, carbon increased by 15–28% in soils managed with organic techniques compared to a 9% increase in conventionally managed soils (6). CGIAR researchers found evidence that the success of using a holistic ecosystem approach to securing land and water resources through sustainable land management mitigated rates of erosion and sediment deposits in the Upper Tana River Basin in Kenya (11).

Risk

Dimensions of Impact: RISK

Key questions in this dimension include:

What impact risks do investments aligned with this Strategic Goal run? How can investments mitigate them?

Impact risk factors for investments to improve ecosystem health include the following.

  • External Risks: Evaluation of an investment should factor in the risks of extreme weather events, limited biodiversity and genetic concentration, land degradation, excess atmospheric carbon, ocean acidification, and nitrogen inefficiency (7). Investors can mitigate these risks by deeply understanding the quality of a project’s land and water resources prior to implementation, seeking long-term investments in soil health and resilience, and ensuring the invested region has strong regulation and enforcement of environmental protection laws. Because climate impacts often take the form of more extreme or frequent occurrences, they are best understood by studying longer temporal horizons than typical risk-management assessments (7). Additional external risk includes the impact of changes in policy or markets that can influence agricultural practices and products. Investors can advocate for policy and regulation that supports and encourages sustainable and regenerative agricultural practices.
  • Evidence Risks: Consistent data collection and measurement can be challenging when evaluating indicators of ecosystem health, such as changes in soil, land, and water quality. Investors can minimize this risk by ensuring formalized and standardized monitoring, reporting, and evidence-collection procedures are in place prior to implementation. They can also make sure that farmers have the technical skills and training needed to support these practices.

What are likely consequences of these impact risk factors?

These risks may lead to financial losses for both investor and investee. Loss of agricultural production due to external risks or loss of a project’s environmental or sustainability certifications present salient and immediate risks for investors. Poor management of an investment can also tarnish an investor’s reputation and credibility. External risks associated with environmental events or human-influenced environmental conditions may cause financial or physical damage to farms and agricultural businesses, leading to investor losses or delayed payback periods. Meanwhile, evidence risks associated with data collection and reporting may lead to inaccurate or misleading outcomes.

Illustrative Investment

Since 2009, RSF Social Finance has supported the growth of Guayaki, a yerba mate–based beverage company that sources the herb for its tea from smallholder, organic farmers in South America. Guayaki exclusively sources shade-grown yerba mate at a premium, which has encouraged farmers to reforest their land with native hardwoods to resemble the plant’s natural growing environment. Starting with a USD 500,000 investment, in 2011 RSF Social Finance offered a USD 1.9 million working capital line of credit to fill a gap in cash flow between inventory purchases and the sale of goods. RSF Social Finance subsequently increased this amount year on year to support the growing social enterprise, including a USD 10 million financial package to build a centralized processing and drying facility in Brazil (14). As of 2019, Guyaki stewards 174,000 acres of Atlantic Rainforest, provides USD 141 million in ecosystem services, monitors more than 400 species of flora and fauna in cultivated forests, has conserved 925 billion liters of water in the soil on 383,500 acres of agroforestry, and has contributed to the economic sovereignty of 1,190 Indigenous and smallholder family members producing yerba mate (15).

Quantified Ventures and ReHarvest Partners manage the Soil and Water Outcomes Fund, which provides financial incentives to farmers to implement conservation agriculture practices that improve water and soil quality. The Fund uses an outcome-based model that verifies results independently with a third-party partner, the outcomes verification firm Sustainable Environmental Consultants. Targeting the Midwest United States, the fund operates across tens of thousands of cropland acreage in Iowa, Illinois, and Ohio. Their annual reporting of environmental outcomes includes 170,000 pounds of nitrogen and 14,250 pounds of phosphorous reduced in 2019 (9).

Mahindra invested in an Integrated Watershed Management Project (IWMP) to promote soil and water conservation on 10,000 hectares in the Indian state of Madya Pradesh. The “Ridge to Valley” program installed sediment traps and ponds high in the watershed near the “ridge” and progressively rolled out measures to the “valley” bottom. In addition to infrastructure improvements, the project also funded tree planting and efficient irrigation systems, such as drip irrigation. This work to develop the watershed has helped slow the flow of water, reduce soil erosion, and increase groundwater levels. The IWMP nearly doubled groundwater availability to 14 meters from 8 meters, increased water storage capacity, and increased overall irrigation access for farmers, who have reported increased agricultural productivity and improved quality of life. After the watershed improvements, households’ average per capita income increased by 235% over five years, and farmers who were previously able to irrigate just 10–20% of their land reported being able to irrigate all of their fields (16).

Draw on Evidence

This mapped evidence shows what outcomes and impacts this strategy can have, based on academic and field research.

NESTA: 2
Status of the World’s Soil Resources (SWSR) Main Report

UN FAO and ITPS. Status of the World’s Soil Resources (SWSR) Main Report. Food and Agriculture Organization of the United Nations and Intergovernmental Technical Panel on Soils, Rome, Italy, 2015. http://www.fao.org/3/a-i5199e.pdf

NESTA: 2
Cover Cropping and No-tillage Improve Soil Health in An Arid Irrigated Cropping System in California’s San Joaquin Valley, USA

Jefferey P. Mitchell et al. “Cover cropping and no-tillage improve soil health in an arid irrigated cropping system in California’s San Joaquin Valley, USA,” Soil and Tillage Research, Vol. 165 (2017), pp. 325–335.

NESTA: 2
Using an Ecosystems Approach for Securing Water and Land Resources in the Upper Tana Basin

Fred Kizito et al. Using an ecosystems approach for securing water and land resources in the Upper Tana Basin. Colombo, Sri Lanka: International Water Management Institute (IWMI). CGIAR Research Program on Water, Land and Ecosystems (WLE). 2015. https://wle.cgiar.org/cgspace/resource/10568-53035

NESTA: 2
Seasonal Analysis of the 2011–2017 North American Monsoon near its Northwest Boundary

Truettner, Charles, Michael D. Dettinger, Emanuele Ziaco, and Franco Biond. “Seasonal Analysis of the 2011–2017 North American Monsoon near its Northwest Boundary.” Atmopshere. 21 July 2019. https://nativewaters-aridlands.com/wp-content/uploads/2019/12/atmosphere-10-00420-v3.pdf

NESTA: 1
Environmental, Energetic, and Economic Comparisons of Organic and Conventional Farming Systems

David Pinentel et al. “Environmental, Energic and Economic Comparisons of Organic and Conventional Farming Systems,” Bioscience, Vol. 55 No. 7 (2005), pp. 573 – 582. http://www.blauen-institut.ch/s2_blue/tx_blu/tp/tpg/g1255_pimentel.pdf

NESTA: 1
NESTA: 1
Building a Common Vision for Sustainable Agriculture: Principles and Approaches

UN FAO. Building a Common Vision for Sustainable Agriculture: Principles and Approaches. Good and Agriculture Organization of the United Stations, Rome, Italy, 2014. http://www.fao.org/3/a-i3940e.pdf

NESTA: 1
Soil Erosion and Agricultural Sustainability

David R. Montgomery. “Soil erosion and agricultural sustainability” Proceedings of the National Academy of Sciences Vol 104, 33 (2007). DOI: 10.1073/pnas.0611508104

NESTA: 1
Global Assessment Report on Biodiversity and Ecosystem Services

Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES). The Global Assessment Report on Biodiversity and Ecosystem Services. IPBES secretariat. Bonn, Germany. 2019. https://ipbes.net/global-assessment

Each resource is assigned a rating of rigor according to the NESTA Standards of Evidence.

Define Metrics

Core Metrics

This starter set of core metrics — chosen from the IRIS catalog with the input of impact investors who work in this area — indicate performance toward objectives within this strategy. They can help with setting targets, tracking performance, and managing toward success.

Additional Metrics

While the above core metrics provide a starter set of measurements that can show outcomes of a portfolio targeted toward this goal, the additional metrics below — or others from the IRIS catalog — can provide more nuance and depth to understanding your impact.