Farmland

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How Insight invests in Farmland

Environmental and social considerations feature prominently in farmland investments that Insight oversees for our clients. Insight has detailed due diligence procedures incorporating these principles and an independent SRI Committee that provides input into different aspects when appropriate.

Before purchase: Insight's due diligence process

Before constructing a portfolio, one of the key factors we consider is the ability of our farmland investments to farm sustainably in any geography or product segment. For example, we might consider whether farming practices could be implemented or put in place more sustainably in newer geographies relative to existing operations.

The due diligence process for farmland investments incorporates both desktop research and intensive on-site visits. The process assesses each potential investment against a variety of indicators including its fit with the broader investment strategy, financial and operating performance of the investment, the quality of assets and infrastructure, the potential for productivity enhancement and/or development, industry viability, customers and markets/supply chains, operational and commercial risks, and environmental considerations, as well as SRI considerations.

In terms of the environmental considerations, we undertake environmental due diligence on all the farming opportunities that we assess. This aspect of the due diligence process aims to identify relevant environmental issues and factors such as:

  • Storage: potential pollution from the above or below-ground storage of substances such as slurry, oils, fuels and agrochemicals
  • Land use: use of land for purposes such as carcass burial or waste landfill
  • Water management: supply availability and security, waste water discharges and/or flood risks
  • Buildings: the presence of hazardous materials such as asbestos and polychlorinated biphenyls (PCBs)
  • Accidents: analysis of past spills/leaks or other environmental incidents on the land in question
  • Neighbouring properties: issues relating to historical or present activities in surrounding sites that may negatively impact the land investment being considered.

The decision-making process for investments involves comprehensive gathering and analysis of information and is not weighted to any specific indicator on a pre-determined basis. The assessment of each holding is conducted by a combination of focused operational and business analysis and, when required, input from external experts. Due diligence is dynamic, focusing on both the current situation and forward-looking risks. Where specific issues are identified, either an action plan is established to remedy the situation or the project is discontinued.

After purchase: Insight's approach to farm operation

Insight's farmland investments for clients are diversified across commodities and geographies, with countries selected for sustainable comparative advantage in the production of target commodities. The core of Insight’s approach is based on Integrated Farm Management, a dynamic framework developed by Linking Environment and Farming, which aims to provide guidelines for effectively balancing the objectives of productivity and profitability with environmental considerations. An integrated approach to farm managementThe guidelines provide desired practices across a range of activities that are intrinsic to farming. These include approaches to soil management, animal welfare, waste disposal, community and labour relations and energy efficiency. 

An integrated approach to farm management

This holistic approach to sustainable farming combines the best of traditional methods with beneficial modern technologies and global best practice to achieve high productivity and minimal environmental impact.

Management guidelines and the Sustainable and Responsible Investment (SRI) Committee

Operating on a global basis across a range of farmland types, Insight recognises that it is important to have a process for adapting approaches to different holdings. Insight achieves this by continually seeking to identify best practice on a global basis, taking input from local management and working with independent specialists.

Local operating entities will have detailed policies in place that apply to specific issues, such as:

  • The use of hormonal growth promotants (HGPs)
  • The use of recombinant bovine somatotropin (rBST)
  • The treatment of bobby calves
  • Policy on controlled burning and fire
  • Health and safety.

We work with local management to conduct regular training courses to ensure the key tenets of this responsible investment approach are adhered to. As well as the issues above, these will cover topics including anti-bribery and corruption, operational health and safety, and ethical training.

In addition, Insight has established the SRI Committee to provide the investment team with a source of information and research on best practice in sustainable farming techniques. It comprises individuals with expert knowledge of the issues highlighted above to seek their advice and guidance on relevant issues where necessary.

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