Executive Briefing Inside the Numbers: Modeling the Financial Impact of Regen Ag

What if the ROI of Regen Ag wasn’t (just) sustainability?

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AgFood companies today are under pressure to secure stable supply, manage rising costs, and stay ahead of regulations — all while proving real ROI on sustainability investments.

In this executive briefing, we walk you through a financial model built using a representative large-scale brewer (>€10bn revenue scope) giving a clear benchmark that can be scaled to fit your own volumes and revenue.

The analysis shows the true cost of doing nothing and the gains regenerative agriculture can deliver across supply security, compliance, and brand performance. If you want to understand the real business impact of regenerative sourcing, this session is for you.

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Executive FAQ: ROI, Risks, and Market Dynamics

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What drives market share loss: consumer shifts or retailer pressure?

Currently, the risk is primarily driven by retailer-supplier dynamics rather than direct consumer behavior.

• The "Category Captain" Advantage: Retailers increasingly demand regenerative roadmaps. Meeting these specs allows a company to act as a "Category Captain," securing better shelf space, market access, and pricing leverage.
• Conservative ROI: While a "consumer premium" for sustainable goods may emerge, our current models focus on the tangible B2B benefits of maintaining a strong "license to operate" with major retailers.

Does your financing assessment support a "Supply Shed" approach?

Yes. Our model works with both supply shed and supply chain approaches, provided they meet current regulatory and market standards. Soil Capital factors in the specific costs of engagement under both frameworks to ensure the financial assessment reflects real-world procurement complexities.

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Why should agri-food companies invest now instead of in 5 years?

The "Wait and See" approach carries a heavy opportunity cost.

• The €750k/Day Risk: In our case study of a large-scale brewer, the net present value (NPV) of inaction represented a staggering cost of €750,000 per day.‍
• The Triple Constraint: In any transition, you can choose two: Fast, Cheap, or Well-done. Starting late forces you to choose between high costs (Fast) or failing to meet 2030 targets (Not Well-done).

Are retailers prepared to co-finance the transition?

Not necessarily through direct payments. Instead, the "payment" is often reflected in preferential treatment. Retailers expect suppliers to arrive with a regenerative roadmap. Those who do are rewarded with:

• Increased shelf space.
• Protection of market access.
• Incremental pricing advantages over non-compliant competitors.

Can the model account for government subsidies paid to farmers?

While our current baseline assumes the corporate entity carries 100% of the cost on their balance sheet, the model can absolutely factor in subsidies. Including public funding or CAP payments can lower procurement costs and improve the overall business case for the corporate buyer.

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When will market signals be strong enough to change procurement policies?

For industry leaders, the shift has already happened.

• Early Adopters: Organizations already seeing an ROI have already integrated regenerative requirements into their procurement.
• The Internal Gap: A common hurdle is that regenerative conversations often happen in sustainability silos. To scale, these conversations must move into the Procurement-Finance-Marketing relationship to capture the full value of the investment.

If SBTI focus is on mitigation, what drives the purchase if outcomes aren't guaranteed?

While SBTi (Science Based Targets initiative) provides consistency, the business driver is moving beyond just GHG mitigation toward climate adaptation.

• Security of Supply: Regenerative practices buffer against climate shocks and input volatility, keeping food inflation lower.‍
• License to Operate: In a world of increasing regulation and investor pressure, "doing the right thing" is a prerequisite for maintaining market access, regardless of short-term climate variability.

Are GHG reductions real or just modeled (e.g., cover crops)?

The industry is moving toward a blended approach.

• Ground-Truthing: We use a combination of predictive models, in-field soil measurements at specific intervals, and satellite imagery.‍
• Continuous Improvement: While cover crop impact can be modeled, we emphasize the need to "ground-truth" data with field practices to ensure removals and reductions are genuine and measurable.

Does the impact of Regenerative Ag vary by region?

Yes. Impact is not just a biological reality but a socio-economic one. Soil Capital’s data is currently grounded in Europe (UK, France, Belgium, Ireland, Poland) and Argentina. We refine these figures through "bespoke drill-downs" to account for specific bioregional and local economic differences.

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Carbon reduction isn't our only driver. How do you quantify the "Cost of Inaction" for water and soil health?

The cost of inaction for "Beyond Carbon" metrics is often more immediate than carbon. Our financial models highlight two critical areas:

• Water (Prevention vs. Cure): It is significantly more expensive to treat water downstream (filtering nitrates and pesticides) than to finance upstream practice changes. This superior ROI is why French Water Agencies and Payments for Ecosystem Services (PES) are actively funding transitions today.
• Physical Infrastructure Risk: Investing in soil structure to increase water infiltration is a fraction of the cost of repairing damage from runoff and mudflows, which frequently cost municipalities and private actors millions in emergency repairs.

Can these models be applied to different crops or industries?

Absolutely. Since 2020, we have compiled data across the entire arable system. We have performed deep dives into various value chains, ranging from oilseeds to industrial bakeries. Our models are adaptable to virtually any crop-based supply chain.

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When will companies face carbon penalties, and will SMEs be affected differently?

While direct "carbon taxes" aren't yet universal, the regulatory landscape is shifting toward the 2027–2030 horizon (e.g., expansion of ETS-style mechanisms).

• The CSRD Trickle-Down: Even though regulations like CSRD target "Large Caps" first, the impact is immediate for the entire supply chain.‍
• The Compliance Burden: To report Scope 3 data, large corporates must demand transparency from all suppliers. SMEs may be "exempt" from the tax on paper, but they face a de facto regulatory burden to remain eligible, compliant suppliers.

How do you prevent "Free Riders" from benefiting from your regenerative investments?

The "Prisoner's Dilemma" in the industry is solved through strict accounting and physical supply chain security:

• The Claim Follows the Money: Under GHG Protocol and SBTi rules, only the company financing the transition can legally claim the Scope 3 reductions. A competitor buying from the same region without contributing cannot claim those environmental benefits.
• Securing Supply vs. Generic Commodities: Investing in a regenerative roadmap secures a long-term relationship and priority access to climate-resilient volumes. Free riders are left exposed to the volatility and scarcity of generic commodity markets.