EUROPE - A group of institutional investors with $1.3trn (€920bn) in assets under management have today launched the Principles for Responsible Investment in Farmland - the Farmland Principles - with the goal of improving the sustainability, transparency and accountability of investments in farmland.
The Farmland Principles aim to provide institutional investors, which have shown a strong increase in interest in farmland in recent years, with best practice guidelines for:Promoting environmental sustainability (Principle 1) Respecting labour and human rights (Principle 2) Respecting existing land and resource rights (Principle 3) Upholding high business and ethical standards (Principle 4) Reporting on activities and progress toward implementing and promoting the principles (Principle 5)
Xander den Uyl, vice-chairman of the board of trustees of ABP, said: "Farmland operations that respect the environment, adhere to responsible labour practices and maintain positive stakeholder relations are better long-term investments - for the local communities, for host countries and for the pensioners we serve.
"We hope these principles will provide a reference point also for other investors' farmland investments."
Christina Olivecrona, sustainability analyst at AP2, added: "Environmental and ethical issues are an important part of our investment process. Having recently decided to invest in farmland, AP2, therefore, actively supported the development of the Farmland Principles with the goal of improving sustainability and transparency in this asset class."
The Farmland Principles were developed and are endorsed by AP2 (Sweden), ABP (Netherlands), APG (Netherlands), ATP (Denmark), BT Pension Scheme (UK), Hermes EOS (UK), PGGM (Netherlands) and TIAA-CREF (US).
All are signatories to the UN-backed Principles for Responsible Investment (PRI).
These institutions are committed to implementing the Farmland Principles in their investment policies and practices. Other institutional investors are invited to endorse the Farmland Principles and use them as a framework for developing their own responsible farmland investment practices.
The institutions that launched the Farmland Principles are also part of a newly formed PRI investor working group that will develop implementation support and tools to further advance responsible investment in farmland.
The institutions are planning to review the Farmland Principles based on implementation experience and stakeholder feedback.
More information is available on the PRI website here.