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					     Reporting framework and Key Performance Indicators (KPIs) for
                    Sustainable Land Management
I.     Background

There is increasing concern about the effects of farmland investments. Specifically, this
concern has coalesced around the issue of ‘land grabs’ and the impact of investments on the
well being of local peoples and the environment. In response, the “Principles for Responsible
Investment in Farmland” were launched in September 2011, as general guidelines for
institutional investors, farmland asset owners and managers. Various multilateral
organizations have also developed similar principles and guidelines, e.g. “Principles for
Responsible Agricultural Investment (RAI) that Respects Rights, Livelihoods and Resources”,
by World Bank, FAO, UNCTAD and IFAD (2010), and FAO’s “Voluntary Guidelines on the
Responsible Governance of Tenure of Land, Fisheries and Forests in the Context of National
Food Security” (2012). In addition to these general guidelines and principles, various
‘roundtables’ are also developing guidance related specifically to products such as soy, and
palm oil. The Key Performance Indicators (KPIs) presented in this document are designed to
support greater adherence to, and adoption of, existing standards and best practice.




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II.    Introduction

A.      Purpose of these Key Performance Indicators
The various principles and guidelines developed to date provide the foundation for the
creation of a voluntary reporting system for farmland asset owners and managers. The KPIs
presented in this document are a first step towards operationalizing the various principles
for farmland asset owners and managers through voluntary, consistent, and regular
reporting. These KPIs will also help investors, Governments and other relevant groups
distinguish between asset owners and mangers that promote long term investment and
value creation, versus those promoting short-termism and land speculation. For example,
KPI reports may be used by investors to identify ‘best in class’ managers, by Governments to
evaluate investment applications, and by Civil Society Organizations (CSOs) to inform
advocacy strategies. In summary, the purpose of these KPIs is: To provide a framework for
regularly and consistently collecting and publishing voluntary information from farmland
asset owners and managers to disclose information on the human and environmental
impacts of their activities to the public, governments, CSOs and potential investors.

B.      The future of reporting
There is growing concern about the link between a business’ long-term financial success, and
the impacts of that business on the society and environment within which it operates. This
has occurred through increasing awareness of the main shareholders (the public) about their
role in encouraging good business practices, e.g. in terms of who they choose to manage
their pensions, the products they buy, and the politicians they vote for. This trend has
manifested itself in the form of increasing corporate reporting and disclosure, driven both by
regulation and voluntary initiatives, litigation, the rise in demand for ‘impact’, ‘green’ or
‘sustainable’ investing, and increasing shareholder activism. Recent financial crises are
expected to strengthen this trend for transparency and disclosure. Various government
agencies and shareholder groups are also increasingly encouraging differentiation of
products and managers based not just on financial performance, but also social and
environmental impact. It is expected that over time, there will be a ‘grading system’ of asset
owners and managers that rewards good environmental and social stewardship (‘a race to
the top’), and that these KPIs are a first step in this direction.

Public attention has recently been drawn to the impact of farmland investment on local
communities and the environment. However, good quality information about such
investments is poor or non-existent. In the absence of information, it is difficult to make
well-informed assessments of the situation and to create meaningful disclosure initiatives. A
secondary objective of these KPIs are therefore also to create a foundation for building
information systems that can effectively track and monitor international investor activity
with respect to farmland management and ownership.

C.      Characterizing different types of investments and investors in farmland
It is important to distinguish between the different types of investors and ‘private sector’
companies engaged in farmland investment, as well as the different forms of investment
related to farmland. Table 1 categorizes and describes different types of investors, for the
purpose of this reporting framework.


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Types of Investments: Investors can purchase the stock of companies that are listed on stock
exchanges, and that can be bought and sold publicly, e.g. Archer-Daniel Midland (ADM).
Authorized investors can also invest in underlying commodities (e.g. wheat) and derivatives,
which have this commodity as the underlying asset. Investors can also engage in ‘private
equity’ whereby they invest in unlisted equities (e.g. buy and operate farmland). These
investment forms are not mutually exclusive. Companies, e.g. food producers, can also
investment directly in land. Direct investments in farmland are typically done through
private equity structures. The extent to which an investment is a ‘land grab’ is closely linked
to the type of investor and investment.

Table 1: Investor classification




D.     Who should use the KPIs?

Primary users: Only Primary Users should complete these KPIs. These are organizations that
own and, or, manage farmland:
     Fund managers that own and, or, manage farmland
     Companies that own and, or, manage farmland
     Institutional investors investing directly in farmland (independently or through co-
       investments)

Secondary users: Organizations that have an interest in farmland asset owners and, or,
managers:
    Institutional investors that invest in managers and, or, owners of farmland
    Banks that lends capital to farmland asset owners or that can promote such
      investments to its clients
    Retailers that can push companies to disclose information about their supply chains
    The public who can influence reporting through their choice of pension fund, and
      retail choices
    Governments legislating on reporting, disclosure and listing requirements




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III.      The Reporting Framework
A.        Primary user: What should you know before starting?

Primary users should first complete the ‘Guidelines’ matrix (Table 2) to identify the Sections
that they should answer. The responses are distinguished at the fund level, and at a specific
investment level relevant where responders directly own and, or, manage farmland. Not all
responders should answer all questions, only the sections that are relevant. Note that ESG
refers to ‘Environmental and Social Governance’. For each section, we have indicated
current best practice, and a brief explanation of how the responders should approach the
specific question. Responders should indicate where they already apply best practice. Also:
        KPIs should only be completed once a year,
        KPIs are to be applied at the asset owner / manager level rather than investment-by-
         investment
        Revised and updated versions of the KPIs will be released if and when the need arises

B.        Guidelines and determining relevant sections

Please use the following questionnaire to determine the reporting requirements that are
relevant for your organization. Where your organization does both, e.g. both invests as a
lead and a minority investor, answer both sections. Color and number indicate reporting
categories. Guidance on how to report on the indicator is provided separately in each
section. Note that it is recommended that you type your answer in this word document.

Table 2: Determining your relevant reporting categories




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Section 1
A Name, position and contact information of       This should be the name of the person / people
    person responsible for reporting.             who are responsible for completing this reporting
                                                  framework, as well as the person / people
                                                  responsible for ESG / reporting issues within your
                                                  company generally.
B   Estimate total assets under management in     Indicate approximate size range (US$):
    the last reporting year (US$). Indicate              • $0 – 50m
    approximate percentage of portfolio in               • $50m – 100m
    direct investments vs. indirect (fund of             • $100m - $500mn
    funds, listed equities).                             • Over $500mn
C   Describe how your company operates, and       For example, if you are an asset manager /
    how these guidelines might be relevant.       owner, fund-of-funds or minority investor, how
                                                  are these guidelines relevant. Fund of funds
                                                  might use these to assess and track their
                                                  investees, etc.

Section 2
A Are ESG issues considered in fund selection?    State if ESG criteria exist, and if they do, describe
    If yes, describe                              them (or provide as an attachment), and describe
                                                  how they are applied.
B   Are ESG issues integrated in investment       State if ESG issues are integrated in investment
    management? If yes, describe. Describe any    management, and if so, describe how. Describe if
    processes for ESG issue escalation.           ESG issue escalation processes exist, when they
                                                  might be instigated and how issues are
                                                  escalated.
C   Where you invest in listed equities or take   State if ESG criteria are used to screen listed
    minority positions, describe any ESG issues   equity or minority private equity positions.
    related to selection and management.




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Section 3
A Describe general ESG relevant policies and       State if an ESG policy and process exists. Describe
    processes                                      procedures regarding manager selection,
                                                   monitoring and reporting procedures, staff
                                                   training, and Issue escalation and dispute
                                                   resolution processes.

B   Describe general ESG relevant goals and        State if goals and indicators exist. If they yes,
    performance indicators                         describe institution-wide goals, specific goals
                                                   (e.g. by sectors), KPIs, monitoring frequency and
                                                   procedures.
C   Information collection and management          Describe processes to collect information from
                                                   investment managers, procedures to verify
                                                   information collected.
D   Indicate in which region your organization     In a table, to be inserted below, list regional
    has farmland under management, and per         categories, hectares managed, and state if green
    region estimate hectares managed. For each     or brownfield or both:
    region indicate if you have brownfield or
    greenfield investments, or both.               Middle East and North Africa (MENA) / Sub
                                                   Saharan Africa (SSA) / Latin America, Caribbean,
                                                   Pacific Islands (LACP) (note that this includes
                                                   Mexico, Belize) / North America (NA) / Europe
                                                   (EU countries, plus Switzerland and Norway) /
                                                   Europe, non-EU/ Asia – Central / Asia – Eastern/
                                                   Asia – Northern/ Asia – Southern/ Asia – South
                                                   Eastern/ Oceania (Australia, New Zealand,
                                                   excludes Pacific Isles)
E   Indicate types of commodities your             In a table, list commodity category, and indicate
    organization is currently invested in.         where in the value chain you are involved:
                                                   Livestock (meat & milk) / oil seeds / grains / cash
                                                   crops / cereals / non-consumables (e.g. rubber /
                                                   cotton) / perennials / Aquaculture / tree crops
                                                   (e.g. cocoa)

                                                   Please also indicate which categories you are
                                                   involved in in the production process: Primary
                                                   Production, Processing, Distribution, Retail
F   List certifications, principles achieved and   E.g. UN PRI, organic certification, any commodity
    applied                                        round table certification, Fair Trade, ISO – this
                                                   includes all certifications achieved on any form of
                                                   operation. Note, you may choose to include this
                                                   in the table for the question above (e.g. list
                                                   beside the commodity category).
G   Indicate how many separate land areas /        Categories:
    investments that you have majority             0-5
    ownership / management of                      6-10
                                                   10-20
                                                   >20




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Section 4
A Per region – number or percentage of local       Using the table from Section 3 above, indicate
    leaseholders (using categories from Section    number or percentage of local leaseholders.
    3 above)
B Qualifying process for selecting leaseholders    Describe what processes and criteria exist for
    / out growers?                                 identifying and selecting leaseholders / out
                                                   growers.
C   Describe the support provided to contracted    Describe the support provided to contracted
    leaseholders / out growers?                    leaseholders / out growers, e.g. credit, type of
                                                   training provided, access to agricultural
                                                   machinery, etc.
D   Indicate average duration of contract with     State average duration of contract (years) and
    leaseholder / out grower (years).              range.
E   Please disclose the general content of a       Please provide details, which are non-
    lease / out grower contract                    commercial.
F   Please describe steps taken to ensure and      State if processes exist and how implementation
    promote that the leaseholder / out grower is   is monitored.
    farming in a sustainable way




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      II. Human Rights Indicators
Section 1
A Describe any requirements with respect to         For example, refer to the Voluntary Guidelines on
    land acquisition and long term concession       the Responsible Governance of Tenure of Land,
    processes of investees and reporting on this.   Fisheries and Forests (FAO).
B Existence of ‘good governance’ criteria for       For example, refer to the UN Global Compact ten
    investees, and reporting requirements (e.g.     principles, Equator Principles, IFC Guidelines and
    anti-corruption, slave labor)                   Performance Standards, FAO Voluntary
                                                    Guidelines, OECD Guidelines.
C   Human resource management reporting             For example, refer to the International Labour
    required from investees.                        Standards (ILO)
D   Requirements for investees with respect to      Are there any requirements to assess and
    assessing and monitoring social impacts.        monitor social impacts (e.g. workers rights,
                                                    access to food, indigenous groups).

Section 2
A List governance and human rights-related          State if specific governance and human rights
    issues checked prior to investment, describe    issues are checked prior to investment and in the
    Due Diligence (DD) process.                     DD process.
B Indicate which types of counterparties you        Indicate if and where you have done business
    have engaged with in terms of purchasing /      with in terms of access to land: Government,
    leasing land from.                              Communities, Private company (local), Private
                                                    company (foreign)
C   State and describe steps taken to assess and    State if your organization has steps to assess and
    monitor the local economic impacts of           monitor local economic impact of investment,
    investment.                                     and if you do, state what factors you monitor and
                                                    how often, e.g. refer to Global Reporting
                                                    Initiative HR2 and LA1 and 2.
D   State and describe procedures to identify       State if you have procedures in place to monitor
    and monitor local social impacts (positive      specific social impacts, and if so describe these.
    and negative) of investments. State how         Issues could include: child labor, indigenous
    issues can be escalated if there is non-        peoples rights (e.g. access to cultural sites),
    compliance.                                     access to food. Monitoring could include regular
                                                    social impact assessments, tracking of local GDP,
                                                    employment rates. Management could include
                                                    establishment of local dispute resolution
                                                    processes, pro-active community programs.

Section 3
A Describe general Health & Safety (H&S)            State if you have any H&S management and
    management systems and training applied.        training systems implemented, and describe
                                                    these. E.g. refer to Global Reporting Initiative
                                                    LR8.
B   Describe systems for collecting H&S data,       State if you have a system for collecting H&S
    monitoring and resolution (e.g. number of       data, describe data collected, and frequency of
    accidents, fatalities).                         data collection. Describe processes for dealing
                                                    with issues.




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Section 4
A Do you have a local manager-training               State if you have a local manager-training
    program? If yes, please describe this            program. If so, please attach details (description
    program and how candidates are selected.         of program, e.g. what they are trained on, over
                                                     what period, qualifications achieved, numbers
                                                     trained and how candidates are selected).
B   Please state if you have any other training or   Please indicate where these are part of
    educational support programs, and briefly        mandated operating requirements, vs. where
    describe (e.g. for out-growers, for workers      these are part of a Corporate Social
    on HIV prevention, scholarship                   Responsibility (CSR) programs.
    opportunities).

Section 5
A Describe steps taken to survey existing rights     State if you have company procedures in place
    (e.g. of communities with no formal tenure).     for surveying existing rights prior to investment,
                                                     and describe these.
B   If communities were on the land previously,      State if you have any standard company
    what, if any, processes are there to engage      procedures in place, and describe these (for
    them?                                            example, the application of Free, Prior and
                                                     Informed Consent).
C   Describe any steps taken prior to investment     State if such standard steps exist within your
    to identify particular social needs, and if      company, if so, describe these, e.g. they could be
    activities designed to address these.            linked to health, education, women's rights.




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Section 1
A Requirements for investees with respect to      State if you have any specific environmental
    assessing and monitoring environmental        assessment and monitoring requirements of
    impacts.                                      investees, and what these are, e.g. for freshwater
                                                  use, biodiversity, greenhouse gas emissions. State
                                                  if investees are required to adhere to any
                                                  particular standards or principles, e.g. the
                                                  roundtables or formal disclosure programs.
B   Do you have any investments in animal         State if you have any investments in animal
    production? If so, requirements for investees producers. If so describe any specific health and
    with respect to animal health and welfare.    welfare standards they must adhere to, and how
                                                  these are monitored.

Section 2
A List which environmental factors are             State which environmental factors are checked
    assessed prior to investment, and how?         prior to investment, e.g. soils, fresh water,
                                                   climatic factors, existence of high value species
                                                   (biodiversity).
B   Which environmental factors are monitored      State if you monitor any environmental impacts
    and how?                                       of your investment, how these are monitored
                                                   (metrics) and how regularly these are monitored,
                                                   e.g. soil quality, water quality and availability,
                                                   climatic factors (greenhouse gas emissions,
                                                   sequestration), biodiversity (monitoring of key
                                                   species). State if you adhere to any roundtables
                                                   or formal disclosure programs, and indicate
                                                   which ones (e.g. Roundtable on Responsible Soy).
C   Describe steps taken to minimize adverse       State if you have steps in place to minimize
    environmental impacts.                         environmental impacts at sites (e.g. set-asides for
                                                   key species, sequestration programs).
D   If there is any animal production, describe    State if you have any animal production
    practices with respect to maintaining animal   investments, what these are, and how animal
    health & welfare.                              health and welfare is maintained.




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Section 3
A Describe general steps taken to manage              State if you have any company-wide policies on
    freshwater sources. If there are locations        freshwater management. Describe how you
    where this is a particular issue, describe        identify areas that need special attention, and
    specific steps.                                   describe specific steps taken in this context.
B Describe general steps taken to manage soil         State if you have any company-wide policies on
    quality and prevent degradation. If there are     soil quality management. Describe how you
    locations where this is a particular issue,       identify areas that need special attention, and
    describe specific steps.                          describe specific steps taken in this context.
C Describe your company’s processes to                State if you have any company-wide policies on
    manage energy use (amount and source). If         energy. Describe how you identify areas that
    there are locations where this is a particular    need special attention, and describe specific steps
    issue, describe specific steps.                   taken in this context.
D Describe your company’s processes to                State if you have any company-wide policies on
    manage greenhouse gas emissions (amount           climate change and Greenhouse Gases (GHGs).
    and source). Describe GHG emission                Describe how GHG emissions and impacts of
    reduction commitments your organization           climate change are monitored and managed.
    has made.                                         State if you have made any formal commitments
                                                      to a low carbon strategy (e.g. Carbon Disclosure
                                                      Project, or engagement in a carbon credit
                                                      project).
E   Describe general steps taken to manage            State if you have any company-wide policies on
    biodiversity. If there are locations where this   biodiversity. Describe how you identify areas that
    is a particular issue, describe specific steps.   need special attention, and describe specific steps
                                                      taken in this context.
F   Describe the types of livestock production        State if you have any company-wide policies on
    your organization is involved with (if any).      animal health and welfare. Describe how you
    Describe steps taken to ensure animal health      identify areas that need special attention, and
    and welfare.                                      describe specific steps taken in this context.




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