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Investor Trio Creates €300M Agri Impact Fund

AXA, Unilever and Tikehau aim to raise €1 billion for the new global investment fund

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  • Written by  Banking Exchange staff
Investor Trio Creates €300M Agri Impact Fund

Three institutions have teamed up to launch a major new agriculture investment fund to help the industry address its impact on the climate.

Insurance company AXA, consumer goods giant Unilever and French asset manager Tikehau Capital are all investing €100 million ($105 million) each into the new fund.

The three companies have signed a memorandum of understanding outlining their plans. Currently, it is proposed that Tikehau will manage the fund, while AXA Climate — a dedicated environmental subsidiary — will help with launching and deploying the portfolio.

Unilever will “provide guidance for future projects”, the companies said in a joint statement, through its global networks and supply chains.

Agriculture globally generates between 19% and 29% of all greenhouse gas emissions, according to the World Bank, while up to a third of all food produced globally is wasted or lost.

In addition, a changing climate will affect food production significantly, according to sustainability non-profit organization Ceres. Warmer temperatures and higher extremes have already begun to affect crop yields negatively, as have changes in rainfall and the increased frequency of storms and other extreme weather events.

Impact investments in agriculture touch upon several of the United Nations’ Sustainable Development Goals, including SDG 2 (Zero Hunger), SDG 12 (Responsible Consumption and Production), and SDG 13 (Climate Action).

The trio of investors outlined in their joint statement that positive impacts from their proposed fund could include improving the health of soil, which can soak up carbon from the atmosphere, as well as increasing the resilience of crops.

The fund’s three areas of focus are: to protect soil health to improve biodiversity, preserve water, and combat climate change; to meet growing food demand sustainably; to invest in technology to help build “regenerative agriculture” systems.

The investors stated: “We believe that the required transition in agricultural practices will only be made possible by a new, more systemic form of collaboration between stakeholders across the value chain, including farmers, producers, manufacturers, retailers, technology providers and financial investors, which this fund will seek to bring to life.”

For AXA, the investment will contribute to the insurer’s goal of having €26 billion invested in green assets by 2023 and €1.5 billion invested in “forests and natural capital projects”.

Pierre Abadie, group climate director at Tikehau Capital, added: “We believe that reducing agriculture’s impact on the environment is vital to combating climate change and ensuring there is a healthy and sustainable food supply chain for all.

“This reduction in impact must be a collective effort that takes place on a large scale. Through the launch of this fund, our goal is to pool resources, skills, and expertise to support the technological innovations and the changes of practices that are required to improve both soil and human health.”

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