Soils aren’t an endlessly renewable resource. It’s estimated to take between 200 and 1,000 years for a 2.5 cm layer of topsoil to form. Meanwhile, our existing soil resources are in a state of sharp decline. More areas of land are becoming unusable for agriculture as soils become ‘degraded’ as a result of erosion, being compacted, the loss of organic content and biodiversity as well as from the effects of contamination. The vast expanse of degraded soils extends further around the world each year by an estimated 12 million hectares.

The most prominent economic contribution from soils is in the range of functions that support crop growth and food production. Soil degradation in this area, for example, is predicted to lead to a 30% reduction in food production by 2040, with serious consequences for prices, availability and social stability. More intensive farming methods have been identified as a part of the problem: repeatedly disturbing soil structures, using bigger and heavier machinery, greater removal of organic matter - factors that all play a part in degradation. Greater use of chemical fertilisers and crop varieties with higher yields have, to an extent, hidden the effects of soil degradation on levels of food production, but don’t improve the long-term resilience of soils. It’s also not yet understood what the effects of long-term intensive farming will actually be, and what the potential is for soils to recover and over what period of time. It’s like a bank account, we’re drawing on our soil savings when we’re farming, but have no idea how much soil we’ve got in the bank or the rate of our withdrawals.

Healthy soils are an important natural asset in other ways. They provide a huge and long-term storage tank for carbon dioxide in the atmosphere, helping to slow and mitigate the effects of greenhouse gases. The importance of soils was a focus of the COP21 Paris climate summit in 2015, where the French government announced an initiative aiming to improve levels of carbon storage in agricultural soils by 0.4% a year - believed to be enough to have a major impact on levels of climate change. Compacted soils lead to more water run-off: more flooding, worse droughts, and higher risks of chemicals and fertilisers polluting water supplies.

The most natural capital

There’s a clear need for the condition and sustainability of soils to be taken seriously by those businesses that rely on it as a resource. That means talking in terms of valuations and tangible figures that businesses can recognise, feed into accounting practices - and see how degraded soils will hit the bottom line. When soil is recognised as an essential form of ‘natural capital’ there’s the basis for understanding the current situation, to make projections about the challenges to come and plan for action.

The idea of natural capital is central to the UK government’s 25 year Environment Plan: natural assets need to be included on balance sheets in the same way as any other assets an organisation has. And increasingly there is likely to be pressure on all organisations to demonstrate good practice by including natural capital in both accounts and decision-making.

To date there has been limited work on the practical side of how soils can be valued. In a project funded by the Natural Environment Research Council (NERC) as part of its Valuing Nature Programme, we have looked at finding the best way to put a value on soils for agri-food businesses. This has involved reviewing the existing methods for valuations developed so far, tested against the science to back them up, to find the best synthesis, as well as gaps in the thinking. The finished report provides a roadmap for agri-business to put natural capital onto balance sheets, and close the gap between the scientific theory on one side and business needs on the other.

We’ve worked in partnership with a multi-national agri-business, Olam International, helping us to identify what is needed to manage soil natural capital throughout the agri-food value chain (from farm to shelf). With a stake in a huge land mass across 70 countries, Olam is a good example of a business operation tied to the land, whose future is dependent on soil improvement and sustainability.

Having a natural capital measurement in place is one step forward. The challenges now are around building a clearer picture of the overall soil bank balance, and what the impact of initiatives to conserve soils and reverse soil degradation will actually be. There are only limited, and often privately-held, stocks of data on soil conditions in the UK. Soils can change very slowly and involve too many complex interdependencies for easy measurements of their quality. A metric provides a snapshot, something temporary that offers a baseline. Combining models with data is key to understanding what the state of soils will be in five, 10 and 20 years’ time for agri-business, and providing evidence of what the benefits are from investing in soil resilience. Our team are developing these models to help transform the business case.

More co-operation between the two worlds is needed - and urgently. Science and business has to come together to explore what works, to innovate on approaches to sustainable soil use, so that there can be the right incentives in place, and soils grow in status as the most important capital of all.

Jess Davies is a Lecturer in Sustainability, and Victoria Janes Bassett a Senior Research Associate, at the Pentland Centre for Sustainability in Business.

The NERC natural capital report will be available from:

More information on Pentland Centre projects can be found at: www.lancaster.ac.uk/pentland

jess.davies@lancaster.ac.uk

v.janes@lancaster.ac.uk