Danielle Mendes Thame Denny¹
The approval, on October 23, of the European Soil Monitoring and Resilience Law marks a turning point: soil health is no longer merely an agronomic issue — it now becomes part of the risk assessment for those who finance, insure, and purchase food, feed, bioenergy, and fiber.
The logic is straightforward: when soil degrades, productivity fluctuates, input costs rise, climate vulnerability increases — and the cost of capital follows. When soil improves, the opposite occurs.
What Europe is doing is standardizing indicators, creating comparable reports, and thus paving the way for risk pricing and large-scale capital mobilization to incentivize restoration. This measure is justified both environmentally and economically.
Food systems have already exceeded five planetary boundaries:
(i) land-use change, mainly through the conversion of ecosystems to agriculture and livestock;
(ii) biosphere integrity, due to biodiversity loss associated with habitat fragmentation and monocultures;
(iii) nitrogen and (iv) phosphorus, both surpassed through the use of synthetic fertilizers and inefficient waste management, leading to eutrophication and nitrous oxide emissions; and
(v) freshwater (both “green” and “blue” components), due to irrigation, soil compaction/sealing, and hydrological alterations that degrade water availability and quality.
They also exert significant pressure on the other four boundaries: regarding climate change, agriculture accounts for a substantial share of CO₂ (deforestation and energy production), CH₄ (enteric fermentation and rice cultivation), and N₂O (from soils) emissions;
regarding ocean acidification, it contributes indirectly through CO₂ emissions;
regarding aerosol loading, it generates particulate matter through biomass burning;
and regarding novel entities (pesticides, plastics, antibiotics), it increases chemical loads and ecotoxicological risks.
To align production with sustainability goals, the expected annual costs range between US$ 200 and 500 billion, while the economic benefits exceed US$ 5 trillion per year (through healthier diets, higher productivity, and reduced losses).
This highlights the necessity and urgency of measures such as the Soil Monitoring Law, which provides financial and regulatory instruments to internalize soil degradation risks into credit, insurance, and public procurement systems. A legal-institutional framework is also required, along with national standards for soil indicators, monitoring, reporting, and verification — all integrated with traceability as a condition for competitiveness and access to climate finance.
In Latin America and the Caribbean, soil degradation trends are also alarming: only 34% of soils are considered healthy. The economic and social implications are even greater, given that the region’s economy depends far more on agricultural production than Europe’s.
How can soil health be converted into financial products? There are several possibilities:
(1) rural credit with interest bonuses tied to annual improvements in soil indicators;
(2) parametric insurance with deductibles and premiums calibrated to soil risk classes and land use;
(3) green CRAs/LCAs linked to audited soil health targets; and
(4) transition funds for pastureland restoration, with disbursements based on verified milestones.
Decree 11.815/2023 in Brazil provides for the restoration of 40 million hectares in ten years, outlining steps toward a comprehensive national soil quality law. The restoration potential is significant, productivity recovery is fast, traceability is advancing, and international demand is increasingly sensitive to environmental criteria. Adaptation costs and technical capacity building remain challenges.
However, inaction is costly — leading to higher spreads, greater loss ratios in extreme harvests, commercial discounts due to uncertainty about origin and attributes, and the risk of exclusion from qualified markets that are beginning to demand proof of good practices.
A healthy soil is not environmental philanthropy; it is risk and productivity management. Europe has only started the wave — it is up to us to face it and surf it first.
Referências
BRASIL, Executivo Federal. Caminho Verde – PNCPD – Programa Nacional de Conversão de Pastagem Degradada D11815/2023. Disponível em: <https://www.planalto.gov.br/ccivil_03/_ato2023-2026/2023/decreto/d11815.htm>. Acesso em: 15 out. 2025.
DENNY, Danielle. Apostila Mercado de Carbono e Finanças verdes. Piracicaba: DDLaw, 2025. Disponível em: <https://www.researchgate.net/publication/391566152_Apostila_Mercado_de_Carbono>.
EU, European Parliament and of the Council. Directive Soil Monitoring and Resilience (Soil Monitoring Law). Disponível em: <https://data.consilium.europa.eu/doc/document/ST-9474-2025-REV-1/en/pdf>.
EUROPEAN COMMISSION. Regulation on Deforestation-free Products (EUDR). Disponível em: <https://environment.ec.europa.eu/topics/forests/deforestation/regulation-deforestation-free-products_en>. Acesso em: 20 mar. 2025.
POPPIEL, Raul Roberto; CHERUBIN, Maurício Roberto; NOVAIS, Jean J. M.; et al. Soil health in Latin America and the Caribbean. Communications Earth & Environment, v. 6, n. 1, p. 1–11, 2025. Disponível em: <https://www.nature.com/articles/s43247-025-02021-w>. Acesso em: 22 maio 2025.
ROCKSTRÖM, Johan; THILSTED, Shakuntala Haraksingh; WILLETT, Walter C.; et al. The EAT–Lancet Commission on healthy, sustainable, and just food systems. The Lancet, v. 406, n. 10512, p. 1625–1700, 2025. Disponível em: <https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(25)01201-2/abstract>. Acesso em: 28 out. 2025
¹ Pesquisadora no CCarbon/USP e no RCGI/USP, pós-doutoranda na ESALQ/USP. Atua em governança ambiental, soluções baseadas na natureza e finanças verdes para agropecuária.
