Land in Investment - Navigating the Risks and Opportunities
Investors, fund managers and companies are currently reconsidering how to manage issues associated with the development of land. In the last year, land conflicts have hit the share price of a publicly-listed rubber company in Asia; forced asset owners to divest from agricultural projects in sub-Saharan Africa; generated losses of up to US$2 million a day for mining projects and even contributed to the ousting of a President in South America.
Land is political and the spotlight on these issues is intensifying. Conflicts can last for years and can damage both the value of an asset and the reputation of the company and its investors.
Effective and highly emotive NGO campaigns have brought land issues onto the global agenda. Mobile phones and social media have changed the visibility of otherwise remote local tensions. The media coverage inevitably bundles together companies that have deliberately ignored local sensitivities with those that complied with local laws and made an effort to engage, but found they unwittingly infringed the legitimate rights of local communities.
Capital investment in infrastructure, agricultural intensification and resource productivity is badly needed in developing countries. If done in a responsible and sustainable way, which creates value for local people and the environment, companies, fund managers and investors will be better able to participate in these markets, raise more capital and have confidence that their assets will remain secure over the long-term.
This briefing note aims to help investors and companies understand the risks and begin to move the land agenda from one of fear and risk management to one of inclusive, sustainable investment opportunities