ESG and impact investors working toward a net-zero carbon economy should not overlook the role of agriculture, according to a report released Tuesday by U.S. Farmers and Ranchers in Action.
The report, "Transformative Investment in Climate-Smart Agriculture: Unlocking the potential of our soils to help the U.S. achieve a net-zero economy," said farmers and ranchers are using climate-smart practices but need more investment to bring them to scale. So far, agriculture is typically not part of growing ESG portfolios, "a huge missed opportunity," according to the report produced with The Mixing Bowl, the Croatan Institute and the World Business Council for Sustainable Development.
Widespread adoption of climate-smart agriculture practices by 2025 could sharply reduce U.S. agriculture's contribution to total domestic greenhouse emissions to 3.8% from 9.9%, the report said.
It found that practices including nutrient application, manure management, and cultivation and grazing are "sufficiently mature, both scientifically and in practice, to materially increase carbon storage if widely deployed in the U.S. and globally."
Increased investments and partnerships along with new technologies could make U.S. agriculture a carbon "sink" with -4% of total U.S. emissions.
The report also looks into the various asset classes, financial mechanisms and infrastructures that could help accelerate adoption of climate-smart agriculture.