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SRI Column

Government called to examine UK pension funds’ ‘land grab’ investments

July 2014

UK pension funds and asset man-agement companies including British Airways Pension Fund, Legal & General, Scottish Widows Investment Partnership and Aviva Investors could potentially have £37.3bn (€45bn) collectively invested in ‘land grabs’ worldwide, according to a new report from by Friends of the Earth (FoE).

Titled ‘What’s Your Pension Funding? How UK Institutional Investors Finance the Global Land Grab’, the 40-page report is claimed to be the first time that UK pension funds and asset management companies have been linked directly - via their investments - to global firms either known or alleged to be involved in cases of land grabbing from communities in Africa, Asia and Latin America.

The practice of land grabbing - whereby wealthy businesses acquire large tracts of cheap unused land to grow crops for fuel and for other industries - can also see the rights of the affected people and communities infringed. It has resulted in families being forcibly kicked off their land they use to grow food - with no compensation - and in some cases are lives lost.

Samuel Lowe, FoE’s Land Grabs Campaigner and one of the report’s three co-authors, commenting said: “Our future retirement funds are often being secured at the expense of the poor and powerless through widespread land grabbing. And, in some cases our pensions are actually under threat of being wiped-out due to the risky nature of large-scale land acquisition deals.”

Lowe called for “stringent international laws” by the Government to rule out all of the impacts associated with land grabbing and asserted that: “UK investors must stop funding companies linked to this scandal.” Blackrock, the asset manager, holds by far the most shares and bonds in the 23 high-risk and land grab associated companies, with total holdings of £9.85bn, followed by Legal & General with £8.739bn.

FoE is also calling for the UK Government to examine the role played by pension funds and asset management firms in funding these land grabs, and urged institutional investors to stop investing in companies - either linked to or associated with large-scale land acquisitions - until there are UK laws to rule out the wide range of social and environmental impacts of land grabs.

Furthermore, the campaigning group is pushing for Governments to “urgently” bring ‘UN Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests’ into legislation “with the explicit aim of ruling out land grabs in their own, and in other countries.”

Listing various case studies, the report points to many of these investments in companies involved in large-scale land acquisitions made by UK pension funds that may be fuelling and financing an “unprecedented global land grab”, potentially violating human rights, destroying local food security, forests and sensitive habitats.

With land grabbing increasingly placing hundreds of poor communities at risk of violence and displacement, the report argued: “For investors this presents substantial ethical, operational and financial risks.

“Voluntary codes such as the UN Global Compact, UN Principles for Responsible Investment and the World Bank Principles on Responsible Agriculture Investment are no guarantee that land investments are not causing significant harm. Investors must look beyond voluntary codes of conduct for a true assessment of risks and be more demanding of the companies they invest in.” 

UK & NI Ireland | SRI

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