Creating positive impact through sustainable investing

With the experience of working for a decade with non-profits in India, I believed that only certain kinds of organizations could do good in a world that needs so much of it. One month into my current master’s program and a course on sustainable investing – where we work with clients to help solve one of their business problems – has made me realize otherwise. 

Regenerative Agriculture has many different definitions depending on the processes one embraces. But at the core of it, regenerative agriculture talks about soil health. It also considers the health of ecosystems and humans next to crop production value. It is interesting to note how there is some debate on whether inorganic practices can be considered part of regenerative agriculture, given the goal is sustainability for all – nature and humans. While the terminology and many practices under regenerative agriculture have been around for a long time, it started getting traction in 2016, when climate change started becoming more apparent to a larger population. In India, a large-scale project on Natural Farming, where the Government of Andhra Pradesh has been working with farmers to move them from chemical-based to nature-based agriculture has been operational since 2015. If closely inspected, both natural farming and regenerative agriculture mostly have common practices. Similar efforts are being made by governments, civil society organizations, and farmers across many parts of the world to not only reduce greenhouse gas emissions but also to build climate-resilient agriculture. 

While I was aware of the efforts being made by many stakeholders to move towards regenerative agriculture, I only very recently began to understand the critical role an investor can play in this regard. To put it simply, for farmers to move to regenerative agriculture (which for now seems to have higher initial investment but later lower operating costs with initial yield decline), companies need to be willing to buy their produce at regular intervals. The role of an investor in these companies can become very crucial at this stage. While companies might want to work on climate change mitigation themselves, an investor who has always had sustainable and impact investing as their core value can further push the company in the right direction with financing. Moreover, the investor is also trying to make a difference at a system level (such as government policies, working on parallel sectors, etc.) so that their portfolio companies can find it easier to incorporate regenerative agriculture in their businesses. Another perspective to take into consideration is that trying to work in such a manner in an ecosystem where the work is still nascent and the standards are still being defined, multiples the challenges multi-fold. I feel privileged to be working with such a client who is trying to do everything in its power to move the needle in the world of investing for such a long time. 

Finally, working on such an innovative project on my own would never have provided the same depth of understanding that I have gained by collaborating with my team over the past few weeks. The diversity of skills, understanding of different sectors, and varying experiences have helped start a learning journey. The zeal to do the best possible in a limited period, willingness to listen to the other, openness to different perspectives, and always having the client’s best intention at heart, have ensured that even for such a complicated project, the team has managed to develop a good understanding very quickly. I hope to keep learning about the sector and impact investing along with my team during this semester.