Responsible investment in farmland

Farmland offers a stable long-term investment with the benefits of diversification, inflation protection and potential for attractive returns, but there are significant challenges, including water, soil health, biodiversity, toxics and land rights.

Stakeholder expectations of investors will likely grow, with the new Sustainable Development Goals focusing public attention on food security, land, ecosystems and sustainable agriculture.

Guidelines

1. Promote environmental sustainability

To promote measures aimed at protecting the environment and contributing to the sustainability of specific crops and locations, for example by reducing soil erosion, protecting biodiversity, reducing chemical emissions, effectively managing water, and mitigating climate impacts.
To require investment managers and operators acting on investors’ behalf to conduct an environmental assessment identifying the relevant environmental impacts and risks of a planned investment.
Based on this environmental assessment, investment managers and operators will be expected to implement mitigation and management measures relevant and appropriate to the nature and scale of the proposed investment.

2. Respect labour and human rights

To respect labour and human rights in farmland investments. Require investment managers and operators acting on investors’ behalf to do the same and to avoid complicity in human rights abuses.
To require investment managers and operators to identify relevant labour and human rights risks and impacts of a planned investment and to implement mitigation and management measures to address them appropriately.
Depending on the location and the nature of the investment, to expect investment managers and operators to explicitly implement policies to respect rights such as those relating to indigenous peoples, vulnerable groups, unique cultural systems and values, local food security, labour and any other relevant rights in the scope of their risk assessment and mitigation measures.

3. Respect existing land and resource rights

To respect the existing use of and ownership rights to land and other resources and require investment managers and operators acting on investors’ behalf to do the same.
Investment managers and operators acting on investors’ behalf are required to implement processes for land acquisitions and related investments that are culturally appropriate and transparent, are monitored, ensure accountability and the engagement with relevant stakeholders.
For investments with potential significant adverse impacts on affected communities, the investment managers are expected to implement processes to ensure their free, prior and informed consultation and facilitate their informed participation as a means to establish whether a project has adequately incorporated affected communities’ concerns.

4. Uphold high business and ethical standards

To promote high business and ethical standards in farmland investments.
To require that investment managers and operators acting on investors’ behalf to respect the rule of law even where it is poorly enforced. To also require them to implement processes aimed at avoiding corruption in all its forms, including extortion and bribery, and to reflect an informed view of industry best-practice in their operations.

5. Report on activities and progress towards implementing and promoting the Principles

To report publicly on activities and progress towards implementing the Guidelines, taking into account appropriate confidentiality considerations, within the PRI’s reporting system.
To encourage other institutional investors to endorse and implement these Guidelines.