As planetary boundaries are reached, we all must learn to live within safe operating limits both in terms of greenhouse gas emissions and ecological systems. This is the great challenge of our time.

Without a doubt, industrialisation and capitalism have led to significant unintended environmental consequences.

Rewinding the clock and altering the system to both maintain economic activity while eliminating pollution, environmental and climate damage is a huge task.

Businesses that heretofore were driven solely by profitability and shareholder value are now pivoting squarely towards a model in which sustainability is central.

New environmental and social governance (ESG) reporting requirements for PLCs and large companies are driving businesses across all sectors to reduce environmental harm and pivot their economic activity where necessary.

The EU taxonomy is a classification system which established a list of sustainable activities across most sectors for investment purposes.

The intention is to eliminate greenwashing and ensure that investment flows to those activities which are environmentally sustainable over the long term.

'Polluter pays' principle rising

Sustainability requires a new foundation for capitalism that takes seriously the 'polluter pays' principle, according to Professor of Environmental Law and Policy at Yale University Daniel Etsy.

Etsy asserts that pollution should no longer be accepted as the necessary byproduct of industrial production and justified on a benefit-cost basis.

In cases where pollution is truly unavoidable, harms inflicted on others should be paid for in full - as should the exploitation of natural resources.

Agriculture’s license to operate

While ESG reporting is not a requirement at farm level, this activity will drive change on farms as large corporates seek to report on and reduce emissions within their supply chain and the impact of their activities on the environment.

Consumers, investors, regulators and politicians continue to demand a food production system that exerts a much lower environmental footprint.

The ‘polluter should pay’ debate is only beginning in farming and food systems and is likely to become more central in the coming years.

The ‘social license to operate’ refers to acceptance by all stakeholders of a business's practices and procedures. That license to operate in farming is the subject of significant discussion among environmental NGOs.

But the debate is widening to society more generally. Farming must demonstrate that it can and is reducing its environmental and climate footprint to retain the confidence of stakeholders.

From an investor perspective, innovative and alternative food production systems are increasingly an attractive bet.

While some have floundered recently, they have not gone away. Reasonably, we should consider that we have witnessed the first generation of these innovations which have proven they have the potential to widely disrupt agricultural production.

Lack of environmental progress by the agri-food sector will provide a compelling business case, particularly if the sector should be required to factor in the cost of pollution - a carbon price and or other costs - into market prices.