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In a recent webinar with Klim, leaders from Nestlé, Unilever, and Rabobank discussed how regenerative agriculture is shifting into boardrooms as a strategy to build resilient, low-risk, and high-value supply chains.
The conversation around regenerative agriculture is shifting from sustainability departments to boardrooms. In a recent Innovation Forum webinar in collaboration with Klim, industry leaders from Nestlé, Unilever, and Rabobank explored how regenerative agriculture can derisk supply chains and drive long-term value – moving beyond the narrow focus on carbon reduction alone.
The limits of carbon tunnel vision
Focusing solely on carbon emissions isn't driving the transition fast enough, argued Robert Gerlach, CEO and co-founder of Klim. Regenerative agriculture could play a decisive role in shaping company valuations and profitability – and that the tools to scale such practices cost effectively are already in place.
The reality facing agriculture is sobering. Fifty percent of soil organic carbon has been lost globally, 60% of European farmland is degraded, and climate shocks are expected to reduce yields in key commodities by 20-30%. Meanwhile, food demand is projected to increase by 30-50% in coming decades.
A holistic value framework
Gerlach outlined how regenerative agriculture creates value across three critical dimensions:
Revenue enhancement
- Regenerative performance increasingly factors into tender decisions
- Competitive advantage with retailers implementing regenerative programs
- Brand value from demonstrating meaningful action on sustainability
Cost reduction
- Lower hedging spends to manage supply chain volatility
- Reduced switching costs during crises
- Direct savings from water conservation and input reductions (up to 50% fertilizer reduction after five years)
Risk management
- Proactive compliance with tightening regulation
- Reduced supply shock risks from improved yield stability
- Lower reputational risk and improved talent retention
- Favourable cost of capital from meeting sustainability standards
"All of this pays ultimately into your company valuation," Gerlach explained. "This is the ultimate goal standard for evaluating whether you should engage into a regenerative conversion or not."
The corporate perspective: Long-term R&D investment
Emma Keller, head of sustainability for UK and Ireland at Nestlé, compared regenerative agriculture investments to research and development spending. "You would never question a business's investment into its research and development to find new products or exciting innovations," she noted. "That's exactly what we're seeing with the investment in regenerative agriculture. It's a business imperative to face into the climate shocks, the nature shocks that we're already seeing today."
She pointed to recent British wheat harvests as among the worst on record, highlighting immediate supply chain impacts. For brands such as Nestlé's Shredded Wheat, which uses 100% British wheat, these shocks have material P&L implications.
"There isn't a 'this equals this' on your P&L," Keller explained. "This is a holistic, long-term, different phase of implementation where you see different returns coming back to you."
Building resilience: The primary value driver
Erin Hermsen, sustainable business and programme leader at Unilever, highlighted that resilience was increasingly being recognised as a key driver of value. She also acknowledged the complexity of the issue, noting that meaningful impact took time and that it was difficult to attribute yield declines solely to climate shocks given the many other factors at play.
Additional value creation pathways:
- Consumer engagement in regions with high awareness of water scarcity or farmer pressure
- Straightforward business case around carbon reduction for meeting scope three targets
- Integration of regenerative agriculture into procurement strategies
"Integrating into procurement, I think, is an important step one and a good strategy to have," Hermsen said, noting the importance of maintaining a long-term impact focus alongside short-term commercial objectives.
Embedding regenerative practices in procurement
Procurement integration is essential for scaling impact beyond isolated sustainability initiatives.
Keller stressed that procurement serves as "the lever that translates our sustainability ambitions into the everyday decisions that drive the action." Nestlé is moving toward outcome-based incentives, integrating regenerative performance into sourcing criteria alongside traditional requirements of price, quality, and availability.
"If regeneration isn't a business requirement and isn't embedded into procurement, it will sit separate as a CSR initiative, and that's absolutely where we don't want it to be," Keller stated.
Farmer-centred design and financial incentives
Putting farmers at the centre of transition programs is non-negotiable. This means:
- Providing flexibility in choosing regenerative interventions
- Allowing farmers to start with small portions of farmland (5-10%)
- Offering agronomic advice to manage transition risks
- Addressing the trust barrier many farmers face when changing decades-old practices
On financial incentives, approaches vary by context. Unilever builds transition support into programs rather than offering premiums, focusing on radically reducing input costs and demonstrating that yields don't necessarily drop in the first year of transition.
Nestlé takes a more varied approach depending on commodity and context. For their UK dairy suppliers, they offer premiums of additional pence per litre for implementing different practices. "Over time, what we pay for will change as those goalposts move," Keller noted, "and we learn from initial practices that start to return to the farmer."
Both companies highlighted the importance of blending finance, combining corporate investment with other value chain partners and government incentives such as the UK's Sustainable Farming Incentive.
The financial sector's role
Lizzie Smith, global head of sustainability at Rabobank Wholesale, provided the lender's perspective. As a bank with significant direct lending to farmers, Rabobank has developed sustainability metrics that correlate with financial performance.
Key findings:
- Correlation exists between farmers applying sustainable practices and improved financial performance
- Allows the bank to reduce portfolio risk while offering better lending terms
- Farmers implementing regenerative practices can access more favourable financing
Rabobank initiatives:
- Biodiversity Monitor: Developed with Friesland Campina, WWF, and Wageningen University to use common metrics across the value chain
- Stacked incentives: Different stakeholders provide benefits through discounted lending products or improved commodity price payments
- Responsible Commodity Facility (Brazil): Combines senior debt from Rabobank with subordinated debt and guarantees to incentivise deforestation-free soy production (launched by Waitrose, Tesco, and Sainsbury's).
Data, disclosure, and what comes next
All panellists agreed that data is critical to building credibility and avoiding greenwashing, but warned against “data for data’s sake.” Smith described stronger disclosure requirements as “healthy and positive,” while Hermsen urged pragmatism: “We need to act now, start small, and optimise as we go.” Keller echoed the call for meaningful, actionable data that drives better decisions rather than box-ticking.
Scaling solutions: start small, start now
When asked about the most practical way to scale regenerative agriculture, Gerlach offered clear guidance: "Start now, start small, grow after you started."
What doesn't work:
- Dogmatic approaches requiring long lists of interventions
- Requiring implementation on 100% of farmland immediately
- Creating "super high" barriers to entry
What does work
- Giving farmers flexibility and choice
- Providing agronomic advice
- Offering appropriate remuneration
- Creating intrinsic motivation
"Farmers will recognise what they will all eventually recognise that regenerative agriculture is a profitable investment in their own farm and into the most valuable asset of their farm, which is the soil," Gerlach said. "And once you have that intrinsic motivation started, then there's no going back."
Toward industry collaboration
Industry-wide collaboration remains essential. Hermsen said that the sector is entering a new era of regenerative agriculture – one focused on collective action, shared responsibility, and finding ways to accelerate large-scale impact efficiently.
Critical partners for scale:
- Major trading houses and cooperatives play a crucial role
- Their global operations and close relationships with growers are vital
- Control over significant commodity volumes enables widespread impact
Key takeaways
- Reframe the conversation beyond carbon to encompass revenue, cost, and risk—ultimately impacting company valuation
- Treat it as strategic R&D, not a sustainability project, with long-term value creation timelines
- Embed in procurement to drive real action and avoid CSR siloes
- Centre farmers with flexibility, support, and de-risked transitions
- Collaborate across the value chain to stack incentives and share learnings
- Measure what matters while avoiding data overload
- Start now and start small rather than waiting for perfect conditions
As agriculture faces unprecedented pressures from climate change, soil degradation, and growing food demand, the business case for regenerative practices extends far beyond emissions reduction. The companies leading this transition recognise that building resilient supply chains isn't just good sustainability practice – it's key for long-term business viability.
The tools, frameworks, and financial models are increasingly in place. What's needed now is the will to act, the patience to invest for the long term, and the collaboration to scale solutions across entire supply chains.
Get in touch with Klim here
Get in touch with Klim here
