ESG, climate change and the opportunities for agricultural land
A new report from Knight Frank sheds light on the future of farmland
3 minutes to read
In the 2021 edition of The Wealth Report our Attitudes Survey revealed almost 45% of UHNWIs were becoming more interested in ESG-related property investments.
We also picked “farming” carbon as a hot real estate topic to watch. Since then Microsoft has handed over hundreds of thousands of dollars to just one Australian farmer who has created carbon credits by improving his farm’s soil.
To take a deeper look at the sector and opportunities within land and agriculture Flora Harley, Deputy Editor of The Wealth Report, asks Andrew Shirley, Editor of The Wealth Report and Head of Rural Research at Knight Frank, about a new report examining the latest trends.
You’ve just launched the latest edition of the Knight Frank Rural Report. Tell us a bit more about the report and why it’s relevant to readers of The Wealth Report?
First of all many of the world’s wealthiest individuals own large tracts of farmland, either traditionally or because they are more recent investors. Anders Povlsen and James Dyson, for example, have relatively recently acquired large swathes of the UK, while Bill Gates was reported to own more farmland than anybody else in the world before his divorce.
And secondly, as we touched on in The Wealth Report, farmland is going to play a huge role in delivering global net zero over the coming years so it is becoming an asset class that is about far more than producing food. As such, I think it should be much higher up the investment agenda for more UHNWIs, particularly those interested in sustainability and climate change.
What are the main findings of the report?
The content is really diverse, but what it reveals is changing government and corporate policy means. ESG and climate change are going to be impossible to ignore for farmers and estate owners in the UK and globally. This could be challenging, but also presents many opportunities.
It is already having an impact on land markets. Far more of the buyers, for instance, who are approaching our Farms and Estates team are interested in buying land to “rewild” or farm it in a more environmentally friendly way. We’ve even had enquiries from a number of Hollywood film stars.
What did you find most interesting or surprising when you were pulling together the report?
We do a survey each year of our rural clients and their advisors and I was expecting more scepticism about ESG, but in general most respondents seem to be embracing it in all its forms. Of course, it’s about more than just the E and there was an acknowledgement that the food and farming sector in the UK needs to do more to improve the diversity of its workforce. To back this up the report includes a thought-provoking interview with Wilfred Emmanuel-Jones, better known perhaps as The Black Farmer.
What are the greatest opportunities in the sector?
Being rewarded for delivering environmental benefits has to be right up there for landowners, but it’s not just about climate change and carbon. Flood mitigation will become increasingly important and the value of “social prescribing” where access to the countryside is used as a tool to help mental and physical wellbeing are also opportunities.
And of course the Covid-19 pandemic has made us appreciate our green spaces and the food produced within them even more. There is a big opportunity for food producers to really capitalise on that by marketing the sustainability and health credentials of their produce to consumers.
How can I find out more?
Just head to the report’s webpage where you can read all the articles, download the report or even watch a video showcasing some of its key findings.