What Are Environmental Outcomes?

An environmental outcome is a measurable change to the land, water, air, or natural system resulting from a change in land management. In agriculture, environmental outcomes are generally connected to the management practices used on-farm, and several management practices have proven to produce substantial positive environmental outcomes. As a simple example, we can say that improved water retention in soils is an environmental outcome generated by reducing tillage at harvest or seeding.

Other examples of environmental outcomes include:

Increased soil carbon sequestration from cover crop adoption
Reduced greenhouse gas emissions from efficient fertilizer application practices
Improved water quality with buffer strips
Enhanced biodiversity through crop and livestock diversity

How are environmental outcomes produced, and how do they benefit the farm?

There is a high-level group of practices that have widely been demonstrated to generate positive environmental outcomes on farms. These are generally referred to as Beneficial Management Practices, or “BMP”s, and include the following:

Minimizing soil disturbance
This aims to keep the soil's natural structure and ecosystem intact as much as possible. Soil disturbance often comes from activities like tilling or ploughing, which can break up or compact the soil, disrupt soil organisms, and expose organic matter to the air, leading to faster erosion and decomposition.

Minimizing soil disturbance helps with moisture retention, protection from erosion, soil temperature moderation, water infiltration and retention, nutrient cycling, and increases beneficial microbial populations.
Maintaining continuous soil cover and keeping living roots in the ground
This includes reduced tilling, cover cropping, and having a crop in your rotation that is not harvested. This practice helps protect against wind and water erosion, reduces soil loss and weed growth, improves soil moisture retention, and speeds up the generation of soil organic matter and fertility.
Enhance biodiversity
This includes interseeding, companion planting, and crop rotations. These practices help reduce market risk from crop failures or price drops, reduce pest pressure and nutrient deficiencies and support a wider range of beneficial soil organisms, which build resilience against climate extremes and disease.
Integrating livestock
Livestock add circularity to crop production via nutrient cycling. This is achieved through applying manure as an organic amendment, or through grazing on pasture, resting fields, or fields with cover crops. Importantly, proximity to groundwater and surface water must be considered, as the direct application of the manure may increase the likelihood of runoff and contamination.
Reducing, or ensuring efficient use of synthetic inputs such as fertilizers, pesticides, and herbicides

Case Study: CANZA’s Million Acre Challenge Program

The Million Acre Challenge Program will provide financial and agronomic support to incentivize the adoption of BMPs on farms in Southwestern Ontario.

For the first cohort of this program, a short-list of eight specific BMPs were selected. In the below table you can read a brief description of each, as well as an explanation of how it may generate positive environmental outcomes.

Practice	Description	Potential environmental outcomes
Controlled-release N fertilizer	Controlled-release fertilizer gradually releases the N as the crop grows.	Improved water quality Reduced greenhouse gas emissions Controlled release of N reduces the risk of leaching (into water) or volatilization (into the air as GHG emissions), while also improving N use efficiency.
Nitrification and/or urease inhibitors	Nitrification inhibitors delay the conversion of ammonium to nitrates. Urease inhibitors slow the conversion of urea to ammonia and carbon dioxide.	Improved water quality Reduced greenhouse gas emissions These inhibitors reduce the risk of leaching (into water) and denitrification (into the air as GHG emissions), while also improving N use efficiency.
Split-rate N application with rate determined using pre-sidedress nitrate test (PSNT)	Nitrification inhibitors delay the conversion of ammonium to nitrates. Urease inhibitors slow the conversion of urea to ammonia and carbon dioxide.	Improved water quality Reduced greenhouse gas emissions This application method helps to ensure the right time of application, thus reducing the risk of leaching (into water), volatilization, and denitrification (into the air as GHG emissions). It also helps to optimize nitrogen use, which can reduce fertilizer costs and increase yields.
Variable rate N application	Variable-rate application is a precision agriculture method of applying the appropriate amount of N for each zone of the field based on soil test results, rather than applying the same amount of N across the whole field.	Improved water quality Reduced greenhouse gas emissions This application method helps to ensure the right rate of application, thus reducing the risk of leaching (into water), volatilization, and denitrification (into the air as GHG emissions). It also helps to optimize nitrogen use, which can reduce fertilizer costs and increase yields.
N-Fixing biofertilizer	N-fixing biofertilizers are a sustainable alternative to synthetic N fertilizer. The microorganisms in the products can convert atmospheric N into a form plants can use.	Improved water quality Reduced greenhouse gas emissions These biofertilizers can improve N-fixing in the soil and lead to reduced use of synthetic fertilizers.
Mitigation strategies to reduce methane emissions from manure (e.g., acidification)	Adding acid (such as sulfuric acid) to stored liquid manure.	Reduced greenhouse gas emissions Lowering manure pH decreases the amount of methane released into the atmosphere.
Organic amendments (solid and/or liquid manure) Note: only manure will be supported.	Applying manure to the field(s).	Increased soil carbon sequestration Enhanced biodiversity Applying manure to farm fields can help to improve the overall health of the soil by adding a natural, nutrient-dense amendment. Using manure in place of synthetic fertilizers can also increase soil carbon sequestration and bring more biodiversity back into the soil and the farm.
Strip Tilling	Strip tilling is the process of only disturbing the soil in narrow lines where seeds will be planted, rather than disturbing the entire field.	Increased soil carbon sequestration Improved water quality Enhanced biodiversity Strip tilling helps to maintain soil structure and organic matter while reducing soil erosion by reducing disturbance.
No Tilling	No tilling is the process of avoiding soil disruption entirely ahead of planting/	Increased soil carbon sequestration Improved water quality Enhanced biodiversity Just as with strip tilling, no tilling helps to maintain soil structure and organic matter while reducing soil erosion by reducing disturbance.
Cover Cropping	Cover crops (e.g., forage legumes, cover crop radish) are typically left in the field to build soil health, rather than being harvested and sold or fed to livestock.	Increased soil carbon sequestration Improved water quality Enhanced biodiversity Cover crops can store and fix N, which can be used by subsequent crops. Cover crops can also decrease soil erosion, improve water infiltration and increase biodiversity on the farm.

Why these practices?

The practices supported for Cohort 1 were selected based on feedback from key industry stakeholders and over 30 farmers consulted throughout the design phase of the Program. Recognizing this list is far from exhaustive, we expect it to expand with future cohorts as we develop the ability to measure outcomes across additional practices.

The investment potential of environmental outcomes

For an environmental outcome to be “real” or credible, it typically requires some sort of validation through measurement. Approaches to validating changes in environmental attributes can be informal and qualitative, such as hearing more birds or seeing less dust, all the way across the spectrum to formal quantification such as carbon credits or verified emissions reductions. While farmers have long observed these outcomes on their land, only recently have systems emerged at scale and at a reasonable price that allows them to be consistently measured, compared, and valued.

At the same time, there is a growing body of capital becoming available to farmers through the quantification and sale of environmental outcomes. Consumer packaged goods companies, agri-food firms, and financial institutions are under increased scrutiny about their emissions, and consumer demand for corporations to participate in environmental protection has also risen sharply. Together, these pressures have created record demand for outcomes that Canadian farmers have been delivering for decades through the adoption of BMPs.

The missing link has been the measurement, monitoring, reporting, and verification (MMRV) of those outcomes.

Historically, farmers have had limited ability or incentive to formally measure and verify environmental outcomes. Soil carbon, water quality, and biodiversity are complex to quantify, methods have not been standardized, and the process can be time-consuming and costly. The need for specialized tools, technical expertise, and third-party verification has further limited participation, making it difficult for farmers to access emerging markets or demonstrate the full value of their practices.

To support this transformation, CANZA’s Marketplace for environmental outcomes is designed to connect farmers who generate environmental outcomes with investors and buyers seeking credible, high-integrity opportunities. Through the Marketplace, farmers can access pathways to measurement and validation that are appropriate to their practices and outcomes, while retaining clarity around what is being measured, how it is valued, and what commitments are required.

In parallel, CANZA is developing a robust MMRV framework to ensure outcomes traded through the Marketplace are consistent, credible, and aligned with scientific best practices and evolving policy requirements. This framework enables investors and buyers to confidently deploy capital toward outcomes while providing farmers with transparent, fair compensation for the environmental value they create.

By lowering barriers to participation and creating a common structure for interaction, CANZA’s Marketplace supports a new economic model for climate-smart agriculture: one where farmers are rewarded for outcomes, investors gain access to credible and scalable opportunities, and environmental benefits are delivered with integrity and confidence.

Next, read Long-term vision to learn more about the development of the Marketplace and how you can participate.