Insight Investments’ farmland fund has gained a Guernsey Green Fund accreditation, confirming its environmental sustainability.
The certification, introduced by the Guernsey Financial Services Commission last July, recognizes investments that have a positive environmental impact, the asset manager said.
To qualify, 75 percent of a manager’s assets must meet green criteria. The latter include improving carbon pools by, for instance, cutting fertilizer use, low tillage to boost soil carbon, as well as investments that reduce methane or other greenhouse-gas emissions from livestock – for example, through manure management with biodigestors.
Detlef Schoen, head of farmland at Insight Investment, told Agri Investor: “The green fund status gives us validation of what we have been doing. Our fund is actively managed according to our belief that the most successful farmland managers worldwide incorporate sustainable farm and supply management as a core component of their operations.”
With sustainability and the fight against climate change seen as important economic and business issues, Schoen believes self-certification will be a thing of the past.
“More global, comprehensive certification will be needed and is in the process of being created, driven by large-scale institutional investors who want proof their investment is sustainable. This also makes the farm more profitable if it is more resilient to drought, for instance,” he said.
“The good thing about following environmental, social and governance standards is that they add value to the investment in both a real way and in terms of public perception. For example, adding to soil carbon makes the farm more resilient and productive, meaning less money is spent on fertilizer.
“There is already a global forestry stewardship kitemark but not for agriculture.”
Dr Andy Sloan, chairman of Guernsey Green Finance, added: “The purpose of the Guernsey Green Fund certification is to provide a transparent kitemark that can help investors identify investment vehicles which adhere to recognised green standards. Insight’s GFF is the second fund to register to the Green Fund stable, which bodes well for our ambition to create the de facto benchmark for investors in this space.”
The Global Farmland Fund Limited, which closed to new commitments in February 2013, focuses on investments in cash crops in Poland (2,000 hectares) and Romania (14,000 hectares), where no foreign ownership restrictions exist, as well as beef cattle in Australia and pasture-based dairy farms in New Zealand and Chile.