ZURICH (Reuters) – Insurer Axa and consumer goods group Unilever plan to invest 100 million euros each into a new 1 billion euro ($1.06 billion) regenerative agriculture fund to be managed by Tikehau Capital, the three groups said on Wednesday.

The companies each aim to invest 100 million euros into the fund. They said they signed a memorandum of understanding to establish a new private equity “impact” fund dedicated to enhancing biodiversity and mitigating climate change by scaling up regenerative farming, which companies and governments see as a way to help meet targets to lower greenhouse gas emissions.

Proponents say regenerative farming can fight climate change by rebuilding soil organic matter and restoring degraded soil biodiversity, drawing carbon dioxide from the atmosphere and improving the water cycle.

“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,” Pierre Abadie, Group Climate Director at Tikehau Capital, which also aims to invest 100 million euros into the fund, said in a statement.

Agriculture covers nearly 40% of the world’s land and is responsible for 17% of global greenhouse gas emissions, according to the United Nations, while causing a loss of biodiversity. Changes to farm practices could sequester as much as 250 million tonnes of carbon dioxide annually in the United States alone, or 4% of the country’s emissions, according to a 2019 report by the National Academy of Sciences.

The companies aim for the fund to invest in projects and companies dedicated to improving soil conditions, limiting water use and supplying regeneratively grown crops, as well as those developing new technologies in regenerative agriculture.

Impact investing, requiring a fund manager to track how the money meets targets tied to various environmental, social and governance-related metrics, is a growing area for investors.

AXA’s climate arm would utilise satellite technology to help monitor the new fund’s impacts, the companies said, while Unilever would provide guidance based on its own regenerative agriculture policies and work.

($1 = 0.9473 euros)

(Reporting by Brenna Hughes Neghaiwi; Editing by David Gregorio)