Money talks: why regeneration should start speaking the language of finance

Over the next five to ten years, we need a lot of things: a lot of trees in the ground, a lot of composting infrastructure, many electric tractors, many farmland transitions and, of course, countless regenerative food companies. And – needless to say – a lot of talent and expertise entering the regenerative space.

Aside from these ‘a lot’, our worry is that, looking at financing the transition to regenerative food and agriculture, there simply isn’t enough money available in philanthropy and the grant space to make this happen at the scale required by the current circumstances.

Money is a tool –  just like fire, animals or technology

Money can be hugely destructive, or it can be a powerful force for regeneration. You can think of it as stored energy (historically, even as dinosaur bones). Most money has been created and comes from extractive systems. 

Up to now the extractive economy has been very good at using money as a tool. While, in the broader regenerative space, we are not (yet!). That doesn’t mean we all need to become bean counters obsessed with squeezing out every extra yen, euro or dollar. But it does mean we need far more money flowing into regeneration.

We need investments. Grant and philanthropic capital matters, but it is tiny compared to the vast amounts of capital being created and deployed in the investment world. Philanthropy alone – around $2.3 trillion globally each year – cannot deliver the transformation regeneration requires. For-profit investment operates at a fundamentally different order of magnitude.

Current global funding for regenerative and agroecological approaches – including public, private, and philanthropic capital – is estimated at about $44 billion per year, with philanthropic contributions estimated at around $300–$700 million annually. At the same time, several studies estimate the global annual need for transition costs to be USD $200 billion – $450 billion for at least the next decade, while funding flows today are approximately one-tenth of the estimated annual need.

If regeneration is to move from pilots to planetary impact, finance isn’t optional: it’s the only system capable of operating at the required scale. 

There’s an ongoing debate in the regenerative space about whether we should engage at all with today’s largely extractive financial system, or focus exclusively on rebuilding finance to serve nature and life. While reimagining finance to fit nature is essential, it is extremely hard and will take time. We simply don’t have the luxury of waiting for the entire system to change before acting. And that, of course, brings some tension.

Investments demand returns

Part of this tension has, of course, to do with returns. Investments demand returns. Nine years ago, Sallie Calhoun, an experienced  impact investor, blew open the conversation about returns, stating:

“We got market-rate returns in an extractive system, and it seems unlikely that we’re going to be able to get those same market-rate returns as we restore that system at least at the beginning. Once we get some distance down this path of regeneration, returns could be better than they are in the extractive system. But that’s (A) a theory, and (B) there’s probably some kind of lag and who knows how long that is. So do we have realistic return expectations in regenerative agriculture right now? The answer is probably no, if we’re looking for what people think of as market returns.”

With a different perspective on returns, Mark Lewis, managing partner at Trailhead Capital, believes that in a deeply degenerated world, high return investments are possible in the regeneration phase and they might decrease in the long term. According to Lewis “there are opportunities for food and agriculture companies to reach hundreds of billions of dollars in valuation in a relatively short time frame.”

If we are talking about regenerative finance and investing, we need to talk about returns because we can already hear the hardcore ‘the only thing that matters in the world is money’-crowd. Our take: yes, you can absolutely have risk-adjusted returns when investing in regenerative food and agriculture. Risk-adjusted is crucial: when done well, investing in the food system of the future should carry less risk than investing in the current system. But it really depends on the context – your time frame, the transition period, and how deep the dip is.

This requires a significant mindset shift away from fast, extractive returns. We have a debt to pay as Sallie Calhoun highlighted, but expect a mindset shift from extractive speed.

In the regenerative space, at the same time, we’ve developed something like an averse reaction to the finance world and for good reasons. In the last decades, many farmers’ interactions with finance have gone through banks that have proven to be not good partners (to put it mildly). But, especially today, due to the challenges we are facing, it’s a mistake to turn away entirely from financial markets and just see it as an enemy to be avoided no matter what. Instead, we see two possible responses, or two ways forward.

Reimagining the financial system

The first path is to reimagine the financial system so it works for regeneration and for all living beings on this planet. This work likely needs to be supported by very flexible, catalytic, grant-based philanthropy. We need capital that acts as a good ancestor, that is impact-first, not focused on short-term financial returns. 

By definition, this kind of capital is extremely limited. There simply aren’t many forward-thinking funders and investors in the world. So we should use this money for the most extreme, ambitious, and impactful experiments we can. We absolutely have the responsibility to reimagine finance and make it work for regeneration, nature, and life. There is amazing work happening in this space, but it’s still niche and small. Its effects will likely materialise over the longer term. Realistically, it will take at least 5-10 years (and probably more) to have a massive impact (unless major climate shocks or current societal breakdowns accelerate change).

You could see this as making the financial system fit the way nature and regeneration work – which means the financial system itself has to change.

As Sonja Stuchtey, co-founder of The Landbanking Group, told us: “If we really want to unleash big amounts of institutional money, we need to go even beyond the dimensions of big projects, and we need to cater for solutions that reflect their needs to have risk-diverse portfolios of investments, and this has not been possible the way nature investment functioned before we started.” Through its pilots, The Landbanking Group is trying to make billions flow into regeneration by having accountants agreeing that regeneration is an investment, not a cost.

Making regenerative agriculture bankable

Parallel to reimagining the current financial system, as the second path, we can use the current financial system and put it to work where it already fits. An example of this is using finance and investment to get as many productive trees into the ground as possible, as quickly as possible. There are many pockets within regeneration where the existing financial system – perhaps with some modest tweaks – actually makes a lot of sense. 

With the Investing in Regenerative Agriculture and Food podcast, in the last few years we’ve put the spotlight on people and companies making regenerative agriculture bankable. In Brazil, for example, with Philip Kauders, founder of Courageous Land, we saw real world proof that agroforestry is bankable – actually bankable – thanks to field-level evidence from farmers, cooperatives, and investors. 

That naturally opened the question: if Brazil can make regenerative agroforestry profitable, what would it take to convince the rest of the world? Last year, Matt Schmitt, founder of Structure Climate, pushed us to rethink financing mechanisms, while Paul McMahon, co-founder SLM partners, beside making the investment case for ecological farming, showed why regenerative forestry is the gateway drug for institutional investors to put money to work in the natural capital space.

We should absolutely double down on these types of areas and put hundreds of millions, even billions of dollars, to work. And yes, this definitely leads to some tension too.

Patient capital thinking

Take fund structures. Ten-year funds (often 10+2, if you’re lucky) are the norm in venture capital and many other investment structures. This is what investors are used to. But ten years is very little time for farmland to regenerate, fully mature, and generate strong returns. Many founders and farmers see the short-termism of capital as a big obstacle in regeneration. Yes, regeneration can happen relatively quickly, but ten years is still not a lot of time to recoup the costs of planting trees and transitioning land – let alone generate meaningful financial returns. Related to that, recently, we walked the land of La Junquera with Alfonso Chico de Guzman, who makes the case for patient capital thinking: if funding timelines matched ecological timelines, more farms could switch from extractive annuals to living systems that pay their way.

The question is obvious: why aren’t more farmland funds evergreen, or structured for 25, 50 or even 300 years? Because investors have historically been reluctant to those structures and, as a result, you simply raise less money. That doesn’t mean it can’t work,see for example Planetary Impact Ventures, one of the most radical investment funds in the regenerative space, with an evergreen structure and no profit share for fund managers, but the pool of capital willing to back evergreen or long-horizon funds is still much smaller than for standard 7- or 10-year funds.

The 3 horizons framework

This is where the Three Horizons framework is useful. In systems change thinking, this strategic tool for managing innovation and change, categorises initiatives across three timeframes:

• Horizon 1: the current system
• Horizon 2: transitional models that bridge toward a new system
• Horizon 3: the desired future state

What we described as the first path – reimagining finance entirely – is clearly Horizon 3 work. What would stand as Horizon 3 is what Charles Eisenstein answered to our one billion dollar question: “If I had a billion dollars, I would invest in young farmers, get them on the land, buy the land, then maybe give it to them with a below market rate mortgage conditioned on them doing regenerative practices, and have some kind of accountability, that is not only based on metrics, but is based on some community functions.”

What we described as the second path – using today’s financial system where it already fits – is mostly Horizon 2. But Horizon 2 itself has two different buckets: Horizon 2+ and Horizon 2–. The last one, Horizon 2–, locks in the current system a bit longer. A classic example is biogas on Concentrated Animal Feeding Operations (CAFO). Yes, you can use manure to generate renewable energy and heat, which is positive in isolation. But you’re also reinforcing an undesirable system. CAFO’s survive a bit longer because they gain additional revenue, margin, and cash flow. We keep something alive that definitely deserves to die (together with many companies in food and agriculture that continue to make living beings sick and unhappy).

Regenerative farmland acquisition and transition funds would be a Horizon 2+ example. These funds buy conventional farmland, transition it to regenerative practices (cover cropping, diverse rotations, managed grazing, reduced inputs), and generate returns through a mix of improved yields, lower input costs, land value appreciation, and long-term leases with regenerative operators. They fit within existing investment structures, speak the language of institutional investors, and can scale to hundreds of millions. At the same time, they actively dismantle extractive practices rather than prolong them. They don’t fully reinvent the food system (that would be Horizon 3), but they clearly bend the current system toward regeneration and make Horizon 3 more achievable.

Other Horizon 2+ examples are regenerative supply-chain financing (like pre-financing farmers to transition practices in exchange for long-term offtake contracts with food brands), input substitution at scale with biologicals replacing synthetic fertilizers and pesticides, financed through standard growth equity; perennial crop conversion like orchards, agroforestry, or silvopasture replacing annual monocultures, backed by long-horizon but conventional funds; or midstream infrastructure for regenerative food (processing, storage, aggregation) that enables regenerative farmers to access markets without changing consumer behaviour overnight.

Match, don’t mix

What we find most tricky, and often disappointing, is when we start mixing Horizon 3 projects with Horizon 2 investors. You see Horizon 3 entrepreneurs who are extremely ambitious on impact and systems change, trying to raise capital from Horizon 2 investors who are more traditionally trained and uncomfortable with high uncertainty and radical change. It’s simply too much at the same time for them. The investors get confused. The Horizon 3 entrepreneurs say, ‘Yes, that’s the point.’

The mismatch happens the other way around too. Horizon 2 funds or projects – for example buying farmland and regenerating it within existing financial structures –  sometimes try to raise from Horizon 3 investors. These investors often feel the projects aren’t ambitious enough in terms of systems change, even if they are doing solid regenerative work.

“I want to be taken seriously by institutional investors”

As a result, Horizon 2 entrepreneurs often downplay their broader systems-change aspirations in order to fit into the current financial swim lanes.

A great example: about 15 years ago, Koen van Seijen spoke with Tony Lovell, one of the co-founders of SLM Partners (Sustainable Land Management). They were running a grazing fund in Australia which was buying land, changing grazing practices, increasing stocking density, and managing land in a way that stored carbon.

What struck me was that they didn’t mention soil carbon or carbon-negative outcomes in their investor deck. When asked why, Lovell said: “I want to be taken seriously by institutional investors.” Talking about carbon negativity or ecosystem restoration, Lovell was fearing to be put in the Horizon 3 bucket and then no longer be taken seriously.

Horizon 2 investors get frustrated with Horizon 3 entrepreneurs who are extremely ambitious and catalytic about impact and systems change. And Horizon 2 projects – companies, funds, and strategies – try to push regeneration as far as possible while still fitting within existing financial structures.

The key is to be very clear about what you’re raising, from whom, and for which horizon.

Given the urgency – 5 to 10 years to put major pieces in place for land and ocean stewardship, food systems, and ecological regeneration – we need both capital, investment and philanthropy, and both horizons, Horizon 3, which works with flexible, catalytic capital, and Horizon 2+, to scale solutions using existing financial tools where they already fit.

But we should be careful not to mix these approaches.

Clarity on time horizons, expectations, and capital sources is what allows regeneration to scale without watering down ambition or burning out entrepreneurs.

Want to know more? 

• Explore the Investing in Regenerative Agriculture and Food podcast, where Koen has interviewed more than 400 farmers, fund managers, investors, scientists, companies, and thought leaders at the forefront of regenerative food and finance.
• Keen to learn how to put capital to work to regenerate soils at scale? This in-depth online video course offers a practical roadmap. 

And don’t miss the curated book list – a collection of essential regenerative reads that have inspired Koen and Antonella over the past decade.