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Pension funds launch Principles for Responsible Investment in Farmland
Published: 06 Sep 2011
Posted in:  ABP | AP2 | APG | TIAA-CREF
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UN PRI | 6 September 2011
Smoke and mirrors?

A group of institutional investors currently representing US$1.3 trillion in assets 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.

Recent years have seen a strong increase in investor interest in farmland.  The Farmland Principles provide institutional investors 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 towards implementing and promoting the Principles (Principle 5)
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 (USA), all of whom 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 also endorse the Farmland Principles and use them as a framework for developing their own responsible farmland investment practices.

Jose M. Minaya, Head of Natural Resources & Infrastructure Investments at TIAA-CREF, said: “As the world faces the challenge of feeding 9 billion people, it is critical that new investments into agriculture are made with sensitivity to their environmental and social impact.  The Farmland Principles express a strong commitment by long-term oriented investors to practice responsible investment as we seek to create value for our clients.”

Xander den Uyl, ABP
Xander den Uyl,  Vice-Chairman of the Board of Trustees of ABP, added, “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, said, “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 have been developed with respect to other best practice guidelines guiding the actions of financial institutions worldwide.  

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 at: www.unpri.org/commodities  

Notes to editors
View the full text of the Farmland Principles by visiting: www.unpri.org/commodities  

A condensed list is found below:  

Principles for Responsible Investment in Farmland

Principle one: Promoting environmental sustainability  

We will 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. We will require investment managers and operators acting on our 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.
Principle two: Respecting labour and human rights

We will respect labour and human rights in our farmland investments. We will require investment managers and operators acting on our behalf to do the same and to avoid complicity in human rights abuses. We will 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 we 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.    

Principle three: Respecting existing land and resource rights

We will respect the existing use of and ownership rights to land and other resources and we will require investment managers and operators acting on our behalf to do the same. Investment managers and operators acting on our behalf will be 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.
Principle four: Upholding high business and ethical standards  

We will promote high business and ethical standards in our farmland investments. We will require that investment managers and operators acting on our behalf respect the rule of law even where it is poorly enforced. We will 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.
Principle five: Reporting on activities and progress towards implementing the Principles and promoting the Principles

We will report publicly on our activities and progress towards implementing the Farmland Principles, taking into account appropriate confidentiality considerations. We will encourage other institutional investors to endorse and implement the Farmland Principles.

Media Contacts:
AP2: Ulrika Danielson (+46 709 50 16 13 / [email protected])
ABP: Jos van Dijk (+31 45 579 2911 / [email protected])
APG: Thijs Steger (+31 45 579 8100 / [email protected])
ATP: Kristjan Joergensen (+45 4820 3878 / [email protected])  
BT Pension Scheme / Hermes EOS: Jean Dumas (+44 20 7680 2152 / [email protected]) and Asmita Kapadia (+44 20 7680 2120 / [email protected])
TIAA-CREF: John McCool (+1 212 916 6223 / [email protected])
Source: UNPRI

In commenting on this posting, we shall slightly alter the well-known adage: "Once beaten, twice shy" and replace it with: "Once bitten, forever wary". Indeed, a more apt Yoruba adage, translated as best as possible but never truly perfectly, says: "the mother hen sees the Kite and runs saying, I have experienced it before". What glowing Principles of good behaviour, Code of ethics for businessmen, Christian Business Principles, Respects for Inalienable Human rights, etc., etc. have we not heard before now? The same forces that claim to base their society on respect for human rights, finds it easy to rumble into other countries in pursuit of nothing more edifying than crude oil, ticking off the thousand deaths of unarmed citizens of other countries as 'collateral damage'! The Economic Partnership Agreements and NAFTAs of this world are premised upon high sounding altruistic pronouncements when, in actuality, they are driven by the insatiable desire to rob the unwary and the disadvantaged. These Farmland Principles have nothing to do with the central commitment of investors to maximal exploitation of labour, the labour of peoples for whom investors have bigoted disrespect and even a denial of humanity. We cannot be lulled into sleep by these high sounding but, when it is down to business, empty verbiage. What we need to do is insist that, given that we have accepted to be separated from the central nexus of humanity by being allotted to so-called countries, that must seek to survive, if need be, at the expense of all others, is to refuse to alienate national farmland and the water plus other biodiversity therein, to any foreign seducer. Allowing oneself to be seduced, thoroughly abused, only then to be abandoned with swathes of degraded land, is really to commit national suicide. At the end of it all, those who came smiling and offering these platitudes would turn around and ask: "can Africa feed itself?" What is the reason behind the practice of countries that maintain 'strategic Land reserves' at home only to undermine the possibilities of other nations ever thinking of such practice? Africa has always been 'nice' and 'welcoming' and 'friendly', but look where it has gotten us! It is really the fault of our leaders who refuse to acknowledge that certain areas of our lives and endowment should be protected from interference from outside. We cannot create new land to replace what is degraded by investors, just as land itself is inelastic and must be kept sacrosanct for future generations. We have no apologies for taking this trenchant position, in the face of unrequited wrongs done to us by those who came calling as friends and partners, only to finally loot our very souls and humanity. It is not hatred or bigotry either, since some of our best friends are from the North, because we feel together, embrace the world together, understand fairness and equity the same way, recognise our mutual dependence and show courage in recognising past wrongs that must be assuaged.
Dr. Olaseinde Makanjuola Arigbede ---- USMEFAN

Posted on 09 Sep 2011

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