Developing Regenerative Models

This issue of Social Innovation is focused on the growing focus on regenerative models, particularly in the agricultural sector, that I have seen from companies during my research for Better Business: How the B Corp Movement is Remaking Capitalism, and more recent articles on Forbes and Medium. 

Overall, the social entrepreneurs I have met during this research are creating some of the most innovative and creative businesses I have encountered in my 20-year career as a business school researcher and in these newsletters, my goal is to connect the dots between the different innovations and innovative practices I have been seeing. 

Innovative organizations supporting and implementing regenerative practices discussed below include California-based Tablas Creek Vineyard that served as a pilot winery for a new certification program overseen by the Regenerative Organic Alliance, an organization created by leading sustainability-focused businesses like Patagonia and Dr. Bronners. I also profile the regenerative practices at two more traditional farms, including dairy McCarty Family Farms, and Handsome Brook Farms.

President Biden recently highlighted the importance of one regenerative agriculture practice in his recent speech to Congress: "Farmers planting cover crops so they can reduce the carbon dioxide in the air and get paid for doing it." But such longer term agricultural management strategies can also be costly for farmers and so require new and innovative types of financing, such as being done by Danone North America and rePlant and NativeEnergy, both of which are also discussed in more detail below.

Future issues of the newsletter will focus on topics such as new human capital strategies, employee ownership and supply chain environmental management. Please let me know if there are other topics you know of that I should investigate! 

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Developing a Systematic Certification for Regenerative Agriculture

Thanks to its history of earth-friendly practices Tablas Creek Vineyard was selected to be a pilot winery for a new certification program overseen by the Regenerative Organic Alliance that aims to go beyond the USDA Certified Organic standards by creating a new stakeholder-minded certification that incorporates soil health and animal welfare components as well as social benefit by considering the welfare of farm workers and farmers.

For a recent Forbes article, I interviewed Tablas Creek’s general manager and partner Jason Haas, and viticulturist Jordan Lonborg. As Lonborg described, there are certification “protocols that conform to that baseline of soil health, animal welfare, social welfare, but the specifics for what you have to do in a vineyard is going to be different than what you’re going to be doing if you’re growing rice or if you’re growing cotton,” he says. “Being a part of the pilot program was this cool opportunity for us to help craft those standards for the wine community. If there’s the opportunity to share practices that we think are going to be good for the community at large, we’re all in.”

Implementing Regenerative Practices in Traditional Farms

I recently also talked to leaders at farming operations in two more traditional agricultural sectors, dairy and eggs, and learning about the scale of some of these industries highlights the need for more and more farms to integrate regenerative practices into their operations. 

For instance, the scale of production for eggs is much more massive than I had imagined.  There are 394 million laying hens in the U.S. flock as of March 22, and they produce more than 8.6 billion eggs each month. And yet, only about 15% of these are organic. 

To learn more about how regenerative and organic is being implemented in this industry, I recently talked to two leaders from Handsome Brook Farms, Matthew Sherman, the Chief Marketing Officer and Kristen Wharton, Vice President of Corporate Responsibility at Handsome Brook Farms.  As Wharton told me: “a big part of our regenerative role at HBF is to balance out the impact of our hens on Mother Earth. Some examples include: Restoring grass and plants on a regular basis while also taking preventative measures to avoid overgrazing—this means not only planting fresh shade trees and shrubs, but rotating the space in which the hens graze (“rotational grazing”). It can also include restoring soil health by planting “cover crops” to avoid having bare soil exposed (which can lead to soil erosion) & installing proper gutters and downspouts to help water flow gradually away from the barn, avoiding erosion.” You can read more about the regenerative agriculture practices at Handsome Brook Farms in my recent Forbes article.

And similar sentiments were also expressed to me by Ken McCarty, one of the owners and managers of Kansas-based dairy producer McCarty Family Farms. “Regenerative ag to us, in essence, means that we are not participating in an extractive model, and that we're participating in a more circular economy. As we draw the nutrients from the soil or from the earth that are required to take care of our cows and take care of our farms, we're working to replenish those same nutrients from the farms back to the soil. And wherever our footprint lands along the value chain, we are trying to enrich that aspect of the value chain in any way that we can.” If you want to learn more about the many innovative practices at McCarty Family Farms, please click throuh to my recent Forbes article.

New Financing Mechanisms to Support Regenerative Models

As President Biden’s comment highlights, an important part of regenerative practices is letting soil sit fallow for a period, which can be costly for farmers. So a number of companies are developing new ways to help farmers address such costs. 

For instance, Danone North America, a leading food and beverage company recently "announced its partnership with rePlant Capital, a financial services firm dedicated to reversing climate change. Over the next several years, rePlant will invest up to $20 million dollars to support Danone North America’s farmer partners with expenses related to converting to regenerative or organic farming practices. These practices increase biodiversity, enhance ecosystems and enrich soil, as part of the company and its partners’ broader commitments to addressing climate change. And the first of the rePlant loans to Danone farmer partners went to McCarty Family Farms.

Vermont-based NativeEnergy has for over 20 years been among the companies on the frontlines of developing unique financing mechanisms to promote earth friendly practices. The company develops wind, water, biogas, solar, and other renewable energy and clean water projects that generate carbon offsets and partners with other businesses looking to mitigate their climate impact. I recently spoke with Jennifer Cooper, vice president at NativeEnergy, to learn more about its latest projects that are helping companies take climate-positive action through regenerative strategies. 

As Cooper reflected in an interview for a recent Forbes article: “most recently we are focusing on regenerative agriculture, although admittedly that’s a broad, poorly defined term. “Soil is the new wind” in some respects, as our co-founder Tom Stoddard says, because there is great potential for it to be at least part of the solution to high levels of CO2 in our atmosphere and improved soil health has so many benefits for farms and ranches and our food systems. Specifically our team is looking at rotational cattle grazing to increase carbon sequestration in grasslands. But there are some important barriers, like access to upfront capital and uncertainty for farms around when productivity gains may be realized from carbon sequestered into soils.. So it can be ideal to bring money upfront, to de-risk change as much as possible for the farms and ranches and catalyze that shift to regenerative more quickly. Climate finance is by no means the only way to do that, but it’s certainly one way to help catalyze that transition.”

Please Stay in Touch!

If you are interested in keeping up to date on such innovations, please check out my regular articles on Forbes and Medium and connect with me on LinkedIn.

Thanks for reading and don’t hesitate to be in touch with any comments, suggestions or questions!